The United States is reportedly seeking to include India's purchases of Russian oil in ongoing trade negotiations. This move comes amid growing concerns from the U.S. about India's increasing reliance on Russian energy imports and the revenue it provides to Moscow.
India has emerged as the second-largest buyer of Russian oil after China, with over 30% of its fuel now sourced from Russia. This surge in imports followed Western sanctions and price caps on Russian oil after the invasion of Ukraine, which made Russian crude available at discounted prices. While India defends its purchases as a matter of national energy security, the U.S. views it as a financial lifeline to Russia's war efforts.
White House trade advisor Peter Navarro stated that India is acting as a global clearinghouse for Russian oil, refining it and exporting it to other countries, thus providing Moscow with crucial financial resources. Another White House official, Stephen Miller, said that India's purchase of Russian crude was "not acceptable".
In response to India's continued oil imports from Russia, the U.S. President Donald Trump imposed a 50% tariff on Indian goods. This has strained U.S.-India relations, with India viewing the tariffs as unfair since the U.S. and European Union continue to buy goods from Russia.
During recent trade talks, the U.S. team, led by Assistant Trade Representative Brendan Lynch, raised concerns about India's Russian oil purchases. India, in turn, sought the removal of the additional tariffs imposed on its Russian energy purchases. Despite the pressure, Indian officials have indicated that refineries plan to continue buying Russian crude through the end of 2025. These purchases will occur during November and December, but the volumes may be lower than previous years.
India's Ministry of External Affairs has argued that singling out India for buying Russian oil is unfair. India has stated that it will protect its farmers in the face of tariffs imposed by the Trump administration. Indian officials regularly consult with state-owned and private refineries, and no formal directives have been issued to reduce imports.
Bloomberg reported that India continues to increase its imports of Russian crude oil despite international pressure. Taking advantage of discounted prices amid sanctions, Indian refiners see Russian oil as a strategic supply to meet rising domestic demand. The move highlights India's balancing act between geopolitical interests and energy security.
Some analysts believe that the U.S. may be using the tariffs to signal a tougher stance on Russia, even if the actual impact on Russia's war efforts is limited. It's been suggested that a tacit agreement between India and the U.S. on Russian oil is plausible, allowing Trump to claim success in pressuring India to scale down its purchases.
India may recalibrate its oil import strategy for commercial reasons, potentially reducing Russian oil purchases by 10-20% to achieve a greater balance between Gulf, American, and Russian crude in its import mix. Saudi Arabia's discount offers aimed at longer-term contracts with India could also influence this shift.