India Russian oil imports emerged as a major hurdle in the relationship between Donald Trump Administration and Government of India have saved Indian refiners at least $ 12.6 billion in more than three years. The analysis of India’s official trade data has revealed this, in which the average cost of Russian oil has been compared to the price of crude oil imported from other countries. Although these savings are important for refiners, it did not remain as expected at the beginning, as the discount on Russian crude oil over time has come down significantly to the lowest level at 2024-25. But there is a lot more hidden in this whole picture.
In fact, if India had not bought Russian oil, the global crude oil prices would have gone up even further, which would have increased India’s oil import bill a lot because the country is very much dependent on oil imports for its needs. From this perspective, India’s presumptive savings are much higher, because how high international prices are, it depends on how much India bought Russian oil.
Perhaps this is the reason why India has not given any indication to retreat on Russian oil imports despite America’s pressure. There is also a balance at the domestic level where the weight of American high tariffs on the one hand is on the small and medium exporters of India, while on the other hand large refining companies have saved some saving some Russian crude oil. Trump’s aggressive public attitude has made it even more difficult for India to reduce Russian oil imports immediately, even if it wants so. India has made it clear that it will not compromise on its strategic autonomy and will not give Washington’s right to decide with whom it should do business, especially in the case of old and important strategic partners like Russia.
The Trump administration is looking at the large scale of Indian refiners as a weapon to try to end the Ukraine war by putting pressure on Russia. Oil export is the largest revenue source for Moscow and India is the second largest buyer after China. In early August, Trump put an additional 25% tariff over 25% tariffs already imposed on Indian goods, saying that India is buying Russia oil. The impact of this decision can be serious on India’s exports to the US, which cost about $ 87 billion in 2024-25. It is worth noting that the US imposed an additional tariff on India, but did not take any such step on China, who is the biggest buyer of Russia.
New Delhi described this action of the Trump administration as “inappropriate and impractical” and said that these imports started when the traditional suppliers of India moved to Europe. At that time, the US also encouraged India to buy Russian oil so that the global energy markets remain stable. The Biden administration also requested the same after the attack on Ukraine in February 2022.
The Government of India says that it will buy oil from where the best deal will be found, provided it is not banned. There is no formal restriction on Russian oil, only the law of the Price CAP imposed by the US and its associates is applicable only when Western shipping and insurance services are used. Public sector oil companies say that they have not received any instructions from the government and they will continue to buy Russian oil until it is financially and commercially correct.
Russian oil mathematics: discount and savings
Prior to February 2022, Russia’s stake in India’s oil imports was less than 2%.
After the war, western countries rejected Russian oil, then Russia gave huge discounts to attract buyers.
India took advantage of this opportunity and within a few months Russia became India’s largest oil supplier.
Today Russia gives more than one-third of India’s oil supply.
Savings Statistics:
2022-23: Average discount 13.6%, savings $ 4.87 billion
2023-24: Discount 10.4%, Savings $ 5.41 billion (more volume)
2024-25: Rebate reduced to 2.8%, savings $ 1.45 billion
2025-26 (April-June): Rebate 6.2%, Savings $ 0.84 billion
Reasons for reducing discounts:
International oil prices fall
$ 60 per barrel price decrease between CAP and real prices
More freight and insurance costs on Russian oil
Picture Savings and Effects:
If India had not bought Russian oil, global prices would have become higher.
Example: If the average price between 2022-25 was $ 10 more, India’s import bill would have been $ 58 billion more.
Had $ 20 more, the additional burden would have been $ 116 billion.
Institutions like CLSA and Nomura estimate that if India stops buying Russian oil, prices can go up to $ 90-100.
This will increase inflation not only in India but all over the world.
The conclusion is clear: For India, Russian oil imports are not just economic, but a strategic and political issue. The Government of India has repeatedly stated that it is free in terms of choosing its business partner and will not accept any external power pressure on it.
