India has signaled it will continue purchasing oil from Russia despite threats from U.S. President Donald Trump to impose new tariffs. Trump's discontent stems from India's continued imports of Russian crude oil amidst the ongoing war in Ukraine. Trump has threatened to levy a 25% tariff on Indian goods, along with additional import taxes, as a response to India's continued trade with Moscow. These tariffs went into effect on August 1.
Despite these warnings, India seems resolute in maintaining its existing long-term contracts with Russia. One government source explained that these contracts cannot simply be abandoned overnight. Another source defended India's position, arguing that importing Russian oil has helped stabilize global oil prices despite Western sanctions on Russia's oil sector. Notably, Russian crude is not directly sanctioned, and India procures it below the price cap set by the EU.
The Ministry of External Affairs, through spokesperson Randhir Jaiswal, emphasized India's "steady and time-tested partnership" with Russia, highlighting the country's pragmatic approach to energy sourcing.
Trump's frustration is evident in his recent statements on Truth Social, where he accused India of not only buying "massive amounts of Russian Oil" but also selling it on the open market for significant profits, with seeming disregard for the human cost of the war in Ukraine. He stated that he will be "substantially raising the Tariff paid by India to the USA" because of this. However, India maintains that its energy imports are driven by market forces and national interest.
While Trump has claimed that India would cease buying Russian oil, government sources have refuted any immediate changes to existing contracts. Trump even praised Indian refineries for reportedly halting the purchase of Russian oil, but these reports were quickly dismissed by Indian government sources.
India's reliance on Russian oil has grown significantly since the start of the Ukraine war. In January 2022, India bought approximately 68,000 barrels of crude oil per day from Russia, which increased to 1.12 million barrels per day by June 2022, peaking at 2.15 million barrels a day in May 2023. At one point, Russian supplies constituted nearly 40% of India's total oil imports, making Moscow its largest crude supplier. More recently, India's imports from Russia have slightly increased from the previous year to around 1.75 million barrels per day from January to June.
Despite the Indian government's stance, some Indian state refiners have reportedly stopped buying Russian oil as discounts have narrowed. Companies like Indian Oil Corp, Hindustan Petroleum Corp, Bharat Petroleum Corp and Mangalore Refinery Petrochemical Ltd have not sought Russian crude recently.
India consumes around 5.5 million barrels of oil a day, importing roughly 88% of its needs. The country's energy security is therefore heavily reliant on affordable imports. India has successfully navigated the situation thus far by buying oil legally and transparently, staying within the price cap set by Western nations. The government has not issued any directives to oil refineries to stop purchasing Russian crude, allowing them to make commercial choices.
