India’s Russian oil imports dilemma: Russia supplied more than half of India’s crude oil imports in June, a record share and a sharp increase from 36.5% in May. The surge followed disruptions to supplies from West Asia and renewed discounts on Russian crude. It also deepened a dependence that Washington has already used against New Delhi.
The US Congress is considering legislation that would allow the President to impose tariffs of up to 100% on the largest buyers of Russian oil and gas. Earlier drafts had proposed duties of up to 500%. The revised bill gives the President considerable discretion, including the power to grant waivers. India and China are its main targets.
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India has been here before. In August 2025, the US imposed an additional 25% duty on Indian goods because India was buying Russian oil. Washington withdrew the duty in February 2026 after the White House said India had agreed to stop such purchases and buy more American energy. Yet Indian refiners subsequently returned to Russian crude. Imports rose to a record 2.58 million barrels a day in June, according to ship-tracking data reported by Reuters.
Russian oil imports still make sense
Before Russia invaded Ukraine, it supplied less than 2% of India’s crude imports. Western sanctions then gave Indian refiners access to discounted Russian cargoes. India, which imports close to 90% of the oil it consumes, saved billions of dollars.
Those purchases lowered costs for refiners and helped restrain inflation. Oil prices feed into the current account deficit, the rupee, transport costs and the government’s subsidy bill. The commercial case for Russian crude remains strong.
Refiners have also adjusted procurement and logistics around Russian grades. Reliance Industries and Nayara Energy became large buyers, while state-owned refiners joined when prices and sanctions permitted. These arrangements cannot be replaced without cost, though claims that refinery configurations were extensively rebuilt for Russian oil are overstated. Indian refineries were designed to process a broad range of crude grades.
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Alternative supplies have become less dependable. Conflict involving Iran has disrupted shipments from the Gulf, while attacks near the Red Sea have forced vessels to take longer routes around Africa. Freight and insurance costs have risen.
India buys crude from the US, Latin America and Africa. Those sources have not consistently matched Russia on volumes and discounts. The record purchases in June showed how quickly diversification gives way when West Asian supplies are disrupted.
US tariffs have changed the calculation
India’s difficulty lies in the link Washington has created between oil purchases and access to the American market.
The US is India’s largest trading partner. The two countries announced the framework for an interim trade agreement in February 2026, with India offering lower tariffs and wider access for several American industrial and agricultural products. The agreement has yet to remove every source of friction.
Russian oil gives Washington another source of leverage. The US has already shown that it is prepared to use tariffs for foreign-policy disputes. In July 2025, it imposed an additional 40% duty on some Brazilian goods after declaring that actions by the Brazilian government threatened US national security and foreign policy. The measure took the total tariff on affected products to 50%. White House fact sheet
India has argued since 2022 that it will buy oil according to its energy needs and has declined to join Western sanctions against Russia. Washington accepted that position while Russian purchases helped stabilise global oil markets. Its response hardened when the war continued and imports remained high.
The proposed legislation would formalise that pressure. Even if Congress does not prescribe an immediate tariff, the power to impose one can influence negotiations over trade and market access. The February withdrawal of the 25% duty showed that oil purchases and trade concessions are already being considered together.
India needs room to switch suppliers
An abrupt withdrawal from Russian oil would raise costs and leave Indian refiners more exposed to supply disruptions elsewhere. Continued dependence carries the risk of another US tariff.
The government has limited control over either source of risk. It cannot determine US sanctions policy, the course of the war in Ukraine or shipping conditions in West Asia. It can reduce the damage by ensuring that refiners retain contracts and logistics arrangements across several producing regions.
This will cost more than buying the cheapest available barrel. But the June import figures show that India’s crude basket is less diversified than official descriptions suggest. Russia supplied more than half the total. At that level, Washington does not need to block Russian oil shipments to impose costs on India. It can act against Indian exports.
Strategic autonomy depends on the ability to change suppliers without a severe price shock. India does not yet have that ability.