Russia aims to continue its consistent supply of oil and fuel to India, with potential avenues opening for liquefied natural gas (LNG) exports, according to First Deputy Prime Minister Denis Manturov. This announcement comes amidst evolving trade dynamics between India and the United States, with the U.S. imposing additional tariffs on India, citing the country's purchases of Russian oil.
Despite these developments, Russia maintains a positive outlook on its energy partnership with India. A Russian official affirmed Russia's commitment to continue supplying oil to India, emphasizing a "very, very special mechanism" in place to ensure consistent crude trade. This mechanism aims to maintain India's crude oil imports from Russia at a stable level. Moreover, Russia anticipates a 10% annual growth in trade between the two nations.
India's reliance on Russian oil has increased significantly since 2022, following the invasion of Ukraine and the subsequent sanctions imposed by Western nations on Russian oil. In mid-2025, imports from Russia accounted for approximately 37%, or 1.7 million barrels a day, of India's overseas purchases. This shift occurred because Russia sells oil to India at a discount of about 5%, making it a more economically viable option for the country. This allows India to manage domestic inflation.
However, recent data indicates a fluctuating trend in India's Russian oil imports. July saw a decrease in imports compared to the previous month due to reduced discounts and the monsoon season impacting fuel demand. Despite this dip, Russia remains a crucial oil supplier to India, accounting for 34% of India's overall imports in July. Some state refiners in India have paused Urals crude purchases due to narrowed discounts.
In addition to oil and fuel, Russia sees considerable potential in exporting LNG to India. This aligns with India's growing demand for natural gas, which is projected to reach 103 billion cubic meters annually by the end of this decade. India's domestic gas production caters to only half of its total natural gas requirements, making LNG imports essential. Russia is looking to increase LNG production from 33 million tons to 100 million tons by 2035. Novatek, Russia’s largest LNG producer, views India as a key market for its Arctic LNG 2 project, despite existing sanctions.
The United States has expressed concerns over India's increasing oil imports from Russia, imposing a 25% tariff on Indian goods. This move is viewed by the U.S. as India "profiteering" from discounted prices on Russian oil and indirectly funding the war in Ukraine. However, India has defended its right to purchase oil from the cheapest available sources, terming the tariffs "unreasonable".
Furthermore, Russia is keen on strengthening nuclear energy cooperation with India. India aims to enhance its nuclear power generation capacity, focusing on small modular reactors to achieve energy security and reduce carbon emissions.
Looking ahead, a meeting between Russian President Vladimir Putin and Indian Prime Minister Narendra Modi is expected to take place in New Delhi by the end of the year. This meeting could further solidify the energy partnership between the two countries and address trade-related challenges.
