Russian crude and India’s energy security: US President Donald Trump claimed on Wednesday that Prime Minister Narendra Modi has assured Washington that India will stop buying Russian crude within a short period of time. This declaration comes against a backdrop of sharply escalated US pressure, including the imposition of 50 per cent tariffs on Indian goods tied to its continued import of Russian oil. The United States seeks to isolate Russia economically and compel as many trading partners as possible to abandon Moscow’s energy revenues.
India cannot concede on this matter without jeopardising its core strategic interest — energy security. It is imperative that Delhi resist coercion, treat Russian crude procurement as a strategic choice, and at the same time accelerate the transition to cleaner alternatives.
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Russian crude and India’s energy security
India’s quintessential vulnerability is its dependence—roughly 85 per cent—on imported oil. Until 2022, Russian crude accounted for a sliver of India’s imports; by 2024–25, Russia became India’s largest supplier, capturing perhaps 35–40 per cent of import volume. This dramatic shift owes to two features: steep discounts owing to Western sanctions, and India’s need to reduce reliance on the Gulf supply corridor.
By importing cheaper Russian (Urals) crude, Indian refiners have gained better margins and given the government breathing room to limit the burden of higher oil import bills and inflationary pressures. Diversifying away from the Persian Gulf has become more urgent: the red-sea and Hormuz routes are vulnerable to geopolitical disruptions (as evidenced during Iran–Israel tensions and the risk of Strait of Hormuz closure). Russian access offers a counterweight to that geographic concentration risk.
Refinery integration and export leverage
India possesses a refining capacity of over 5 million barrels per day, making it one of the top refining hubs globally. That enables it to import crude from multiple geographies, refine it, and export surplus outputs. Russian crude, especially under discounted terms, makes those exports more profitable, and helps India supply Europe and others even when Russia itself is banned or under embargo. Indeed, India’s exports of petroleum products to Europe have surged, in part filling the void left by direct Russian supplies.
To abandon Russian crude would severely squeeze margins or force India to buy costlier crudes, losing competitive edge. Russian crude serves not only domestic demand but undergirds India’s strategic role as a refining and energy export hub — a key plank in its energy diplomacy and soft power.
Geopolitical and sanctions risks
The US now wields secondary sanctions and steep tariffs as tools of coercion. The 50 per cent import duty imposed on Indian exports is clearly targeted as reprisal for purchasing Russian energy. More broadly, US pressure signals to private banks and insurers to avoid facilitating India–Russia energy trade. The cost and risk of financing, insurance, shipping and clearing may rise. To yield under blackmail would set a dangerous precedent: it would erode India’s strategic autonomy and force every energy decision to pass through a Washington filter. The moment India accepts coercion on energy procurement, it undermines future flexibility — be it with Iran, Venezuela, or other suppliers when needed.
India’s energy trade with Russia has already adapted to sanctions. Use of shadow tanker fleets, reflagging, novel trading entities and routing via neutral jurisdictions has become common. India must guard, however, against reputational risk, legal entanglements, and punitive backlash. Sanctions are not cost-free and will require vigilance, institutional safeguards and diplomatic strategies.
From January 2026, the EU’s sanctions regime will ban the import of refined products derived from Russian crude, regardless of origin (unless from certain exempted countries). This measure threatens India’s export channel logic that has underpinned its refining calculus. India must anticipate that risk and gradually reorient export markets or processing strategies to avoid dependence on Europe for its refined surplus.
Energy security is at the foundation of national sovereignty. It cannot be negotiated by foreign powers. A forced pivot away from Russian crude simply because Washington commands it would signal weakness and weaken deterrence in other domains (defence, diplomacy). India must not hand over its energy agenda.
Cost shock risk from forced reallocation
If India were to abruptly reduce Russian crude imports, it must compensate from Gulf, US, African or Brazilian suppliers. The marginal cost differential is nontrivial; some estimates suggest a $9–11 billion annual increase in import bills. The inflationary effect, fiscal strain and loss of refinery margins would impose real burdens on the economy and consumers.
Retaining the option to buy from Russia gives India leverage diplomatically: it can offer calibrated signalling, pivot in response to shifts, and pursue pragmatic deals rather than ideological alignment with Washington or Brussels. Thus, in a world of strategic contestation, flexibility, not submission, must become India’s guiding posture in energy.
While resilience demands holding strategic space in fossil fuel markets today, India must double down on the energy transition for tomorrow. As analysts point out, India’s power sector is better insulated from import shocks: about 70 per cent of electricity comes from domestically mined coal, and the country is boosting deployment of renewables and battery storage. Building the electricity-based economy (EVs, heat pumps, electrochemical industries) is not optional — it is imperative.
Bridging strategy: Fossil fuels and renewables
India is expanding solar manufacturing capacity and green industrial supply chains. Investing in electrolysers, green hydrogen, advanced battery R&D, grid modernisation and demand management must become central to India’s energy policy. These investments will reduce fossil dependency, create high-value jobs and buttress India’s role in global clean supply chains.
The coexistence of fossil import flexibility and accelerating clean energy adoption is not contradictory. India must manage its fossil portfolio prudently while committing a multi-decade transition path — a “bridge and then shift” strategy. This dual approach ensures that energy security is not held hostage by external pressure while enabling the green transformation India must ultimately achieve.
The US demand that India abandon Russian crude purchases is not an exercise in diplomacy — it is coercion under guise of moralism. But India’s energy security must remain sovereign. Russian crude, despite risks, plays a strategic role in diversification, price arbitrage, and refinery export economics. To cede that under pressure would invite Washington’s diktats across future sectors.
Once India accepts alien interference in energy, it weakens its bargaining posture across diplomacy, security and development. The prudent course is clear: resist coercion, hold strategic flexibility, and at the same time hasten the shift to clean, self-reliant energy. India’s future depends on it.