India-US Tariff Tensions Put India-Russia Oil Bond in Spotlight: How Much Crude Are We Really Buying From Russia?

A new executive order from President Donald Trump, imposing an additional 25% tariff on Indian goods, has directly targeted India’s significant and growing reliance on Russian oil. The order, which the White House says is a response to India’s continued purchases from Moscow, has thrust the country’s energy policy into the center of a brewing trade conflict.

India, the world's third-largest oil importer, has become Russia’s top customer for seaborne crude since Western nations imposed sanctions on Moscow following its 2022 invasion of Ukraine. According to data, India imported an average of 1.75 million barrels of Russian oil per day between January and June of this year, representing a 1% increase from the same period a year ago. Russia now accounts for about 35% of India’s total oil supplies, a massive leap from a negligible share before the war.

The financial incentive for this dramatic shift is clear: Russia has been selling its oil at discounted rates, allowing Indian refiners to save billions of dollars and helping the government keep domestic fuel prices stable. In June, these imports surged even higher to around 2 million barrels per day.

However, the new U.S. tariffs and the threat of further penalties have already begun to impact India’s purchasing behavior. While private refiners, who have annual deals with Moscow, purchased nearly 60% of India's Russian oil imports in the first half of 2025, a shift is underway. Sources told Reuters in late July that India's four state-owned refiners, which control over 60% of the country’s refining capacity, have paused their purchases of Russian oil. This move comes as discounts on Russian crude have shrunk and the threat of U.S. sanctions on buyers of Russian exports has intensified.

The situation presents a major challenge for both New Delhi and Washington. For India, a full pivot away from Russian oil could significantly increase its import bill and put upward pressure on domestic fuel prices. For the U.S., the tariffs are a high-stakes move to pressure a key strategic partner and could backfire, potentially pushing India closer to China and other geopolitical rivals. 

The outcome of this trade standoff will likely reshape global energy markets and have lasting implications for the international order.

Also Read: Trump Declare All Out War With 50% Tariff, Modi's India Will Not Budge