When the United States slapped a 50% tariff on Indian exports in August, President Donald Trump justified it as punishment for New Delhi’s continued purchases of discounted Russian oil. But his latest comments — claiming that Indian Prime Minister Narendra Modi privately agreed to halt Russian imports “within a short period of time” — have triggered diplomatic turbulence across three capitals: Washington, Moscow, and New Delhi.
Russia Defends Its Oil, India Distances Itself
A day after Trump’s claim, Russia’s envoy in Delhi, Denis Alipov, responded cautiously, emphasizing that Russian oil was “very beneficial for the Indian economy and for the welfare of the Indian people.”
Meanwhile, India moved quickly to clarify its position. The Ministry of External Affairs said the country’s import policy was “guided by the interests of the Indian consumer in a volatile energy scenario.” Later, a government spokesperson added that they were unaware of “any conversation yesterday” between Modi and Trump.
The exchange highlights India’s increasingly precarious position — caught between its long-standing defense and energy partner Russia and its strategic ally, the United States. The world’s third-largest oil importer must now decide how to balance geopolitical pressure with domestic energy security.
How Dependent Is India on Russian Oil?
In 2024, India imported $52.7 billion worth of Russian crude, accounting for 37% of its total oil bill, according to government data. Other key suppliers included Iraq, Saudi Arabia, the UAE, Nigeria, and the United States.
Before the Ukraine war, India’s energy mix looked quite different. In 2021–22, its top 10 suppliers included Russia, Iraq, Saudi Arabia, the UAE, the US, Brazil, Kuwait, Mexico, Nigeria, and Oman. The remaining 31 countries contributed smaller volumes, often through short-term deals fluctuating with global oil prices.
Despite perceptions that India has grown overly reliant on Russian energy, the US remains an important supplier. Last year, India purchased $7.7 billion in American petroleum products, including $4.8 billion in crude oil, according to data from the Global Trade Research Initiative (GTRI), a Delhi-based think tank. However, it still ran a $3.2 billion petroleum trade deficit with Washington.
From Iran to Russia: How India’s Oil Basket Shifted
India’s oil import pattern has evolved significantly over the past five years.
Between 2018–19 and 2021–22, India phased out imports from Iran and Venezuela, which once supplied 17% of its total crude (about 41 million tonnes). This shift followed US sanctions that made purchasing oil from those countries nearly impossible. Their exit opened the door for traditional Gulf suppliers like Iraq, Saudi Arabia, and the UAE to expand their share.
Then came the Ukraine war — and the second major transformation in India’s oil portfolio.
Russia, seeking new buyers after Western sanctions, began offering deep discounts on its crude. India seized the opportunity. Imports from Russia skyrocketed from just 4 million tonnes in 2021–22 to over 87 million tonnes by 2024–25.
Those discounts translated into big savings. Russian oil was priced about 14% cheaper than global averages in 2022–23 and 10% cheaper in 2023–24, saving India roughly $5 billion annually, or about 3–4% of its total crude import bill.
Who Lost Out as Russia Gained?
While Russia’s share surged, Gulf suppliers like Iraq and Saudi Arabia saw their percentage share drop by about 11 points, even though their actual export volumes to India remained steady. Instead, the cutback fell on the United States, Brazil, Kuwait, Mexico, Nigeria, and Oman, whose exports to India more than halved.
“The rise of Russian imports has come directly at the expense of nearly everyone else,” explains Partha Mukhopadhyay of the Centre for Policy Research, a Delhi-based think tank. “This isn’t just a pricing shift — it’s a complete reconfiguration of India’s supply network.”
The Savings — and the Risks
India’s total benefit from discounted Russian oil is modest in percentage terms — less than 1% of its $900 billion goods and services import bill — but still represents billions in real savings.
“If India stops buying Russian crude, global prices could jump, erasing those gains and increasing import costs worldwide,” says Mukhopadhyay. “By purchasing discounted oil, India isn’t just helping itself — it’s also quietly stabilizing global markets.”
However, oil markets remain volatile. Prices have dropped 27% this year, from $78 to $59 per barrel, a decline far greater than any potential disruption caused by India altering its import mix.
Refinery Compatibility: Why Russian Oil Works for India
According to Ajay Srivastava, a former trade official and head of GTRI, Russian oil offers India not only affordability but also technical compatibility.
“Most Indian refineries are calibrated for heavier crude grades similar to Russia’s Urals blend,” Srivastava explains. “Switching to light US shale would require costly reconfiguration and could reduce yields of diesel and jet fuel.”
The Urals blend, a medium-to-heavy crude, allows India to refine efficiently without major plant modifications. This makes Russian oil a practical fit — and a difficult habit to break.
The Strategic Dilemma
For New Delhi, the choice is increasingly stark:
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Continue buying Russian oil and risk US retaliation, such as extended tariffs or suspension of trade talks.
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Shift to pricier Middle Eastern or American oil and face a surge in domestic fuel prices.
Either path carries economic and political costs. The long-delayed India-US trade deal now hangs in the balance, and Washington is tightening the screws.
The Broader Geopolitical Picture
India’s balancing act isn’t just about energy — it’s about diplomacy. Moscow remains a key defense partner, supplying weapons, nuclear technology, and support in international forums. Washington, however, is a vital trade and technology ally and a strategic counterweight to China in the Indo-Pacific.
By maintaining energy ties with Russia while deepening defense and technology partnerships with the US, India is attempting to walk a fine line between two competing superpowers.
But as Trump pushes for greater alignment with Washington’s sanctions policy, India may soon face a defining choice — one that could shape not only its energy future but also its global strategic identity for years to come.