Amidst growing pressure from the United States, reports have emerged that India is halting Russian oil imports, a move lauded by U.S. President Donald Trump as "a good step". However, New Delhi has staunchly defended its energy security interests, asserting its right to make independent decisions based on national needs and market dynamics.
Trump stated that he had heard India was no longer going to be buying oil from Russia. He acknowledged he wasn't sure if that was correct, but said that if it was true, it would be "a good step". These remarks followed accusations by Trump that New Delhi engages in unfair trade practices and maintains extensive energy and arms relations with Russia. Trump has also imposed a 25% tariff on all exports to America and an unspecified additional “penalty” for purchasing Russian energy.
Reuters reported that India's state refiners have not purchased Russian oil for the last week. This pause in imports is attributed to narrowing price discounts on Russian crude and renewed threats from the U.S. to impose tariffs on countries that continue to buy oil from Moscow. With discounts at their lowest since 2022, the economic incentive for India to import from Russia has diminished.
India, the world's third-largest oil importer, had become a major buyer of discounted Russian crude following Russia's invasion of Ukraine in 2022. Despite pressure from Western governments, these imports surged, helping Moscow offset losses from lost European markets. However, the recent shift suggests a change in strategy, with Indian refineries turning to the spot market to fill supply gaps and increasing purchases from Middle Eastern OPEC members and West African producers.
India's Ministry of External Affairs has defended the country's procurement of energy and defense hardware from Russia, emphasizing the "steady and time-tested partnership" between New Delhi and Moscow. An external affairs ministry spokesperson Randhir Jaiswal stated that India and the U.S. share a comprehensive global strategic partnership anchored in shared interests, democratic values, and robust people-to-people ties and that this partnership has weathered several transitions and challenges.
India has been diversifying its energy sources to ensure energy security. Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, revealed that India now sources crude oil from 39 countries, reducing its reliance on traditional suppliers. This diversification strengthens India's geopolitical bargaining power and builds resilience against price shocks in global energy markets. India is also pushing for ethanol blending, targeting 20 percent by 2025, which has already saved INR 1.36 lakh crore in foreign exchange. The country has opened nearly 1 million square kilometers for oil and gas exploration and is targeting the production of 900 KTPA of green hydrogen by 2030.
Some analysts suggest that Trump's tariffs on India demonstrate that he is ready to act on his threats to impose secondary tariffs on countries that purchase Russian oil. Others are more skeptical, noting Trump often makes bold announcements only to backtrack later. Concerns remain about the practicalities of implementing and enforcing these tariffs effectively.
Despite the current pause in state-owned refinery purchases, India's private refiners, including Reliance Industries and Nayara Energy, continue to import Russian oil. Four tankers carrying Russian crude are reportedly idling off India's western coast, facing disruptions due to sanctions and the threat of U.S. tariffs. Overall, this situation highlights the delicate balance India must strike between its energy needs, geopolitical considerations, and economic relations with both Russia and the United States.
