India’s continuing imports of Russian crude oil highlight a strategic balancing act: securing energy at competitive rates while facing mounting pressure from the U.S. and looming tariffs tied to those purchases.
Crude flows remain robust as geopolitics intensify
India has surged ahead as one of the largest buyers of Russian crude despite U.S. sanctions and threats of punitive tariffs. In October 2025, India spent approximately US$2.9 billion on Russian crude oil, making it the second-largest global buyer after China. This figure represented about 81 % of India’s fossil fuel imports from Russia that month.
The U.S. government recently imposed sanctions on key Russian energy firms and applied aggressive tariff threats to Indian exports as part of a broader push to cut Moscow’s revenue. India, however, has maintained its energy strategy largely unchanged, emphasizing cost efficiency and supply security.
Why India continues large-scale Russian oil imports
At the heart of India’s decision is a commercial calculus: Russian crude is available at steep discounts compared with other sources, providing Indian refiners and the broader economy a cost advantage. Data shows that after the 2022 invasion of Ukraine, India’s share of Russian crude imports soared—at one point accounting for nearly 40 % of India’s total crude imports.
Beyond price, India’s oil demand remains high—its consumption is among the world’s largest. Securing large volumes of affordable crude supports its refining sector and domestic fuel supply, which in turn helps curb inflationary pressures and drive economic stability.
U.S.–India tensions over oil imports and tariffs
The U.S. has explicitly linked its trade retaliation against India to its continued purchases of Russian oil. Tariffs of up to 50 % on Indian goods have been publicly presented as contingent on India halting or significantly reducing Russian oil imports. In response, Indian officials have defended the imports, emphasizing that their primary driver is national energy interest rather than geopolitics.
This friction signals a deepening trade and strategic divide. The U.S. argues that India’s imports indirectly support Russia’s war effort, whereas India asserts its right to source energy economically and maintain strategic autonomy in foreign policy.
Short-term risks and medium-term pathways
In the short term, India’s heavy reliance on Russian crude carries diplomatic risk and reputational cost. Continued imports may prompt further U.S. or allied responses. Moreover, sanctions on Russian producers could erode supplies or increase transaction complexity.
In the medium term, India faces supply-diversification imperatives. Some Indian refiners have already signalled moves toward alternative crude sources such as the Middle East and the Americas. Any shift away from Russian crude could lead to higher input costs, which in turn could impact refining margins and fuel prices domestically. One analysis warns global crude prices might spike toward US$100 per barrel if India retreats from Russian imports, underscoring the choke-point India occupies in global oil flows.
Strategic implications for India’s energy policy
India’s trajectory underscores three strategic themes. First, affordability and volume still trump geopolitical signalling in its energy policy. Second, India’s position reaffirms its strategic autonomy: New Delhi appears willing to diverge from U.S. preferences when national interest dictates. Third, this dynamic may accelerate India’s longer-term strategy to expand refining, boost exports of petroleum products, and leverage its dominant role in regional energy supply chains.
Takeaways
- India’s Russian crude imports remain elevated despite U.S. tariff pressure and sanctions, driven by cost and supply-security logic.
- Large volumes of discounted Russian oil support India’s domestic refining sector and broader fuel supply chain.
- The U.S. has linked Indian imports to trade sanctions, creating a growing diplomatic rift and trade risk for India.
- India will likely face a balancing act between maintaining affordable supplies and navigating evolving global sanctions, supply diversification and strategic autonomy.
FAQs
Q: Is India prohibited from buying Russian oil under international sanctions?
A: No. India has not been subject to direct international prohibition on buying Russian oil. U.S. sanctions target specific Russian firms and link Indian trade consequences, but India retains the legal ability to import crude.
Q: Why is Russian oil cheaper for India?
A: After sanctions cut off many traditional buyers, Russia offered deep discounts on its crude to maintain export volumes. India took advantage of these discounts, improving its refining margins and reducing input costs.
Q: Could India face direct sanctions for continuing imports?
A: While India faces heightened diplomatic pressure and U.S. trade-tariff risks, direct secondary sanctions (which target non-sanctioning buyers) have not been broadly applied to India at this stage.
Q: What happens if India shifts away from Russian oil?
A: Shifting away could raise crude input costs, strain refining margins, increase fuel prices domestically and potentially tighten global supply. It would also open pathways for alternative suppliers but require investment and transitional costs.
