India-US oil spat could delay Albanese-Trump meeting

Financial Review ^ | August 7th 2025 | Andrew Tillet

[cold start]

A deepening spat between the US and India could cancel this year’s Quad leaders’ summit, potentially delaying a planned meeting between Donald Trump and Anthony Albanese and undermining the region’s premier democratic bloc against China’s rise.

The Albanese government is concerned by the escalating tensions after the US president threatened to slug Indian exports to America with an extra 25 percentage points in tariffs unless it curbs purchases of Russian crude oil.

But as ties between Washington and New Delhi come under severe strain, Indian Prime Minister Narendra Modi on Thursday signalled he planned to travel to China later this month for the first time in seven years, temporarily shelving differences with Beijing in a move interpreted by some as a rebuke to Trump.

Modi is meant to host Trump, Albanese and Japanese Prime Minister Shigeru Ishiba later this year for the annual Quad leaders’ meeting. The Quad has re-emerged as a key forum for the Indo-Pacific’s major democracies to discuss security co-operation amid mutual alarm over the risk China’s militarisation poses to the region.

That meeting was expected to take place in New Delhi in September, but no date had been confirmed. Albanese, in June, flagged that event as a possible site for his first Trump meeting.

The summit had been touted as a possible chance for Albanese and Trump to meet face-to-face after talks were scrapped at the last minute in Canada at the G7 in June, as Trump returned early to Washington to plan the bombing of Iran’s nuclear sites.

Albanese will also travel to New York in late September for the United Nations’ leaders week, when there is another chance for a meeting with Trump. Although the president would be expected to host a number of leaders during that time.

Officials are now focused on trying to have the Quad leaders meet on the sidelines at a summit where they are all attending, such as the G20.

A government source not authorised to speak publicly said the disagreement between the US and India – the world’s biggest economy and most populous nation, respectively – was “concerning” and it was hoped a Quad meeting would still happen.

But one top analyst, also speaking anonymously, said they had been told the meeting would be cancelled, with Modi reluctant to host Trump on home turf.

Just last month, Foreign Minister Penny Wong and her Quad counterparts issued a statement following their joint foreign ministers’ meeting in Washington that they looked forward to the leaders’ event in India.

“Quad foreign ministers have held two meetings this year – a signal of the importance of the Quad partnership and the urgency of the challenges we face,” a spokeswoman for Wong said on Thursday.

“Australia will continue to work with Quad partners to shape a peaceful, stable, prosperous and secure Indo-Pacific.”

Head of Sydney University’s US Studies Centre Mike Green, a former official in George W. Bush’s administration, said it was possible the leaders’ meeting would be cancelled.

“This makes it more complicated,” Green said of the spat. “A lot of people in the system will be pushing to get it back on track, but it does create a climate of uncertainty.”

Strategic Analysis Australia director Michael Shoebridge said Albanese needed to organise a trip to the US to lock in a face-to-face meeting with Trump rather than rely on trying to meet him on the sidelines of summits.

“He is starting to look like the bridesmaid left at the altar. It is time for a plan B, and that involves an airfare to Washington,” he said.

Australia Strategic Policy Institute senior fellow Raji Pillai Rajagopalan said it was “not a good thing” for Australian interests if this year’s leaders summit did not go ahead, bolstering China’s narrative to the region that it was the force for stability against the unpredictable US.

“China will take this as a win for itself. Australia and Japan need to be working together to get this partnership back on track, and it is better for everyone because the China problem is not going away any time soon.”

Modi and Trump have both positioned themselves as populists and nationalists electorally. The two leaders have had what was dubbed a “bromance”, with Modi one of the first to visit the Oval Office after Trump’s inauguration.

But India has also been in Trump’s firing line as he seeks to impose tariffs on trading partners around the world as part of his drive to revive American manufacturing and raise revenue.

India had already been hit with a 25 per cent tariff on its exports to the US, but Trump has threatened to double the rate because the South Asian nation purchases and refines Russian oil, providing Moscow with a major revenue lifeline to wage war on Ukraine.

India argues it was encouraged to import Russian oil by the Biden administration to stabilise global markets, with its previous supplies being diverted to European customers that were boycotting Russian fossil fuels.

Green said Modi had also been angered by Trump, claiming he helped broker a ceasefire between India and Pakistan after the two neighbours exchanged missile and rocket fire over four days in May.

“In so doing, Trump adopted Pakistan’s positions on Kashmir [a disputed border area]. He has leaned towards Pakistan more than any president for 25 years.”

Teesta Prakash, an academic fellow with the Australia India Institute, said India’s reselling of oil it had refined to other countries had been a particular irritant, as it was seen as helping Moscow profit despite embargoes and price caps on Russian oil.

She said Australia and Japan had been left in a difficult spot as the Quad had slipped down the order of priorities for the US and India, which indicated it was prepared to re-evaluate its relationship with China despite border tensions.

“Whether this is pressure or punishment, it is now clear India is going to direct its focus across more groups,” she said.

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TOPICS: Foreign Affairs
KEYWORDS: australia; india; trump; us