Will Modi government stop buying oil from Russia under Trump’s pressure? What will be its impact?
New Delhi: The United States has long been pressuring India to stop purchasing Russian oil. The Donald Trump-led administration has even imposed a 50 per cent tariff on India. Trump has also consistently claimed that India could soon stop buying Russian oil. On Wednesday, October 15, he even said that Prime Minister Narendra Modi had personally agreed to stop these purchases “in a short time.”
How important is Russian oil to Indian economy?
Russian Ambassador to India Denis Alipov stated that Russian oil is “very beneficial to the Indian economy and the welfare of the Indian people.” Meanwhile, the Indian Foreign Ministry stated that its import policy was formulated “keeping in mind the interests of Indian consumers in an unstable energy landscape,” and a spokesperson later said they were unaware of any discussions between Modi and Trump. India is not willing to stop buying oil from Russia under US pressure. Therefore, it is important to understand how important Russian oil is to the Indian economy.
Last year, India, the world’s third-largest oil importer, purchased $52.7 billion worth of Russian crude oil, 37% of its oil bill, followed by Iraq, Saudi Arabia, the United Arab Emirates (UAE), Nigeria, and the United States.
Which countries did India buy oil from before Russia?
Before the increase in Russian imports, India’s top 10 crude oil suppliers in 2021-22 were Russia, Iraq, Saudi Arabia, the United Arab Emirates, the United States, Brazil, Kuwait, Mexico, Nigeria, and Oman.
Although there is some popular belief that India is entirely dependent on Russian oil, it still imports significant quantities from the US. According to the Global Trade Research Initiative (GTRI), a Delhi-based think tank, in 2024, India purchased US petroleum products worth $7.7 billion—including $4.8 billion worth of crude oil—but still had a petroleum trade deficit of $3.2 billion with Washington.
Ukraine War changed everything
India’s oil imports from Russia increased due to the Ukraine War. Traditional consumers of Russian energy halted purchases due to this war. Numerous sanctions were imposed on Russia. This prompted Russia to offer steep discounts on oil. India, which has a significant need for cheap energy, seized the opportunity and began purchasing large quantities of oil from Russia. India’s Russian oil imports increased from 4 million tonnes in 2021-22 to over 87 million tonnes in 2024-25. This jump was due to discounts granted by Russia following Western sanctions, making its crude oil more attractive to Indian refiners.
India benefited from buying Russian oil
After 2021-22, Russian oil prices averaged a 14.1% discount in 2022-23 and 10.4% in 2023-24, saving India approximately $5 billion annually, or 3-4% of its crude oil import bill. The three Gulf countries—Iraq, Saudi Arabia, and the United Arab Emirates—saw a decline of 11 percentage points in their share, but their actual volume remained stable as India’s total imports increased from 196 million tonnes to 244 million tonnes.
What would happen if India stopped buying Russian oil?
Experts believe that if India stopped buying oil from Russia, global oil prices could rise. Global oil demand could also increase, but if production remained stable, prices could continue to rise. This would impact consumers in India, and inflation would also increase. Therefore, the Modi government would want to avoid such a risk. However, if oil were available from another country at the same price as Russia, the situation could change.
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