India continues to import significant quantities of oil from Russia, even as the United States intensifies warnings and imposes higher tariffs on Indian goods linked to this trade. Russia offers crude oil at nearly a 5% discount compared to global prices—a valuable advantage as international oil prices remain elevated. Russian officials expect this mutually beneficial trade to continue, helping India manage inflation and meet its growing energy demands cost-effectively.
US Tariffs and Trade Tensions Over Russian Oil
US policymakers have expressed strong displeasure at India’s large-scale oil imports from Russia, viewing the payments as indirect support to Russia’s military efforts in Ukraine. Recently, the US raised tariffs on several Indian products, citing India’s persistent purchases of Russian oil as one of the reasons. It is notable that some of these tariffs echo the increased protectionist measures first introduced during the Trump administration, which sought to leverage tariffs to influence trade behaviors and geopolitical alignments.
India, however, defends its stance vigorously, arguing that global markets function on competitive pricing and that every country purchases energy from the most affordable source. The Indian government has called Washington’s pressure “unreasonable,” emphasizing its right to prioritize national economic interests.
Growing Reliance on Russian Crude and Economic Impact
Since the outbreak of the Russia-Ukraine war in 2022 and the subsequent G7-imposed price cap of $60 per barrel on Russian oil, India has substantially ramped up its purchases. Currently, nearly 1.7 million barrels per day, or about 36-37% of India’s crude imports, come from Russia. Amid global crude prices over $80 per barrel, Russia’s discounted oil has saved India billions annually. This supply has played a key role in stabilizing India’s domestic petrol and diesel prices through 2024 and 2025, unlike the sharp price rises seen in the US and Europe.
Shifting Diplomatic Dynamics: India Balances Global Powers
This energy partnership influences India’s geopolitical posture. Prime Minister Narendra Modi’s recent description of Vladimir Putin as a “friend” underscores warming India-Russia ties. Concurrently, India is renewing closer relations with China, preparing for a high-profile visit to Beijing after a seven-year hiatus. These developments reflect India’s pragmatic approach to balancing major global powers while asserting its sovereign economic priorities, particularly in securing affordable energy supplies regardless of geopolitical pressures.
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Indian Energy Companies Benefit on the Stock Market
Several Indian energy companies linked to this Russian oil trade have demonstrated robust stock market performance:
- ONGC (Oil and Natural Gas Corporation Ltd), India’s key oil producer, has seen its share price rise from around ₹160 in mid-2023 to ₹225-230 in August 2025, supported by increased domestic output and government policies.
- Reliance Industries Ltd (RIL), which owns the massive Jamnagar refinery processing significant volumes of Russian crude, has seen its stock climb from around ₹2,200 in 2023 to over ₹3,000 in 2025, boosted by refining gains on discounted crude.
- Indian Oil Corporation (IOC), another major player purchasing Russian oil, reported strong profit margins, reflected in its stock movement from ₹70 in 2023 to approximately ₹105 in 2025.
- Russian firm Rosneft, though not listed in India but on the Moscow Exchange, owns a stake in Nayara Energy, which has nearly doubled its refining of Russian oil but faces restricted foreign investment due to sanctions.
Financial analysts caution that worsening geopolitical tensions could lead to volatility in these energy stocks. Still, the availability of cheap Russian crude continues to underpin the strength of companies like Reliance, IOC, ONGC, and BPCL, which have outperformed sectors like IT and FMCG in recent years.
Conclusion: Practicality Over Politics Drives India’s Energy Strategy
India’s sustained purchases of discounted Russian oil highlight a clear focus on national interest—controlling inflation, lowering import costs, and supporting economic growth. Despite US tariff pressures rooted partially in Trump-era protectionist policies, India remains resolute in its approach. The ongoing geopolitical balancing act, coupled with the stock market boon enjoyed by domestic energy firms, signals India’s evolving foreign policy—anchored in practical, independent decision-making and economic priorities.
