Despite increasing pressure from the United States, Russia has affirmed its commitment to maintaining a steady flow of oil supplies to India, offering a discount of approximately 5%. This decision comes amidst a backdrop of rising tariff tensions between the U.S. and India, with the U.S. accusing India of supporting Russia's war in Ukraine through its continued oil purchases.
The Trump administration has been increasingly critical of India's energy relationship with Russia, particularly since the start of the war in Ukraine in 2022. Washington has imposed tariffs on Indian goods, explicitly linking these measures to India's continued imports of Russian oil. Most recently, President Trump imposed a 25% tariff on Indian goods and threatened to double it to 50% on August 27th, a move that could significantly impact India's $85 billion in annual exports to the U.S.. According to some reports, half of this penalty is directly related to New Delhi's purchases of Russian oil.
India, however, has defended its right to buy oil from the cheapest available source, asserting its energy security needs and the autonomy to choose its trading partners. The country has emphasized that its oil procurement decisions are driven by national interest and market dynamics. Since Western nations began imposing sanctions on Moscow, India has significantly increased its imports of Russian crude, taking advantage of discounted prices. In fact, Russia has become India's largest oil supplier, increasing its share of India's total oil imports from a mere 1.7% in 2019-20 to 35.1% in 2024-25.
Evgeny Griva, the Deputy Trade Representative of Russia to India, stated that Russia's oil discount to India makes it difficult for the country to find alternatives. He also projected a 10% annual growth in bilateral trade between the two nations. The Russian Embassy in India has echoed this sentiment, asserting that mechanisms are in place to ensure the uninterrupted flow of oil to India, regardless of the political climate. They also aim to reduce the trade imbalance between the two countries and are looking to remove trade barriers.
Despite the U.S. tariffs and warnings of potential further penalties, including tariffs of up to 100% on Indian exports, India appears to be standing its ground. Recent reports indicate that Indian state-owned refiners have resumed purchasing Russian oil after a brief pause triggered by the initial U.S. tariffs. Deliveries are expected in September and October, signaling India's continued reliance on Russian oil.
The situation highlights the complex geopolitical dynamics at play, with the U.S. attempting to isolate Russia economically while India navigates its energy needs and strategic partnerships. Russia lauds India for standing its ground on trade partners and asserting its freedom of choice against American bullying. As the situation unfolds, it remains to be seen how the U.S. will respond to India's continued defiance and what further measures, if any, will be taken.
