Indian refiners’ decision to sharply cut Russian crude imports in response to new US sanctions has thrown into question India’s long-cherished claim to strategic autonomy. What was once a matter of energy economics has now become a test of geopolitical resolve. The move, ostensibly aimed at complying with sanctions on Russian oil producers, exposes the limits of autonomy in a world where markets, finance, and diplomacy are deeply entangled.
The United States has imposed fresh sanctions on Russia’s two largest oil producers — Rosneft and Lukoil — extending the reach of its punitive measures well beyond Europe. For India, the world’s third-largest oil importer, the effect was immediate. Refiners such as Reliance Industries, Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation began reviewing long-term supply contracts to ensure that no crude from the sanctioned entities would slip through.
According to Reuters, Reliance, which has a large-term deal with Rosneft to buy nearly half a million barrels per day, is expected to halt purchases entirely, while other refiners have begun substituting Russian barrels with Middle Eastern and Brazilian crude. The decision comes at a delicate diplomatic moment. New Delhi is negotiating a possible trade deal with Washington, even as its exporters face punishing 50 per cent tariffs — half of them said to be retaliatory measures linked to India’s continued import of Russian oil. In that sense, energy and trade have converged into a single theatre of negotiation.
READ I Why China’s critical minerals dominance will last years
Why Russian crude imports matter for India
India’s energy security rests on imported oil — nearly 85 per cent of its total requirement. The reliance is structural, not cyclical, and thus any shift in supplier composition reverberates across the economy. The surge in Russian crude imports after the 2022 Ukraine war was both opportunistic and strategic: Russia, cut off from Western markets, offered deep discounts, while Indian refiners found a chance to cushion domestic inflation and boost refining margins. By 2024, Russia had climbed from being a marginal player in India’s oil basket to supplying almost 40 per cent of total imports.
The benefits, however, came with new vulnerabilities. The financial transactions often skirted the US dollar system, relying instead on dirham or rupee payments. Shipping routes and insurance arrangements required careful navigation through secondary sanctions. Now, with the US tightening its grip, those vulnerabilities have come to the fore. The autonomy to buy oil based purely on cost and supply considerations has been replaced by calculations shaped by diplomatic risk. In short, India’s oil strategy has shifted from one of opportunistic diversification to cautious compliance.
Strategic autonomy: Principle and practice
Strategic autonomy has long been the north star of India’s foreign policy. It was the essence of Nehru’s non-alignment, later adapted into a doctrine of multi-alignment that allowed India to engage the United States, Russia, and China without being beholden to any. Yet, as the energy episode illustrates, autonomy in principle does not always translate into autonomy in practice.
When Indian refiners declare their intention to reduce Russian crude imports in alignment with government guidelines, it signals more than administrative caution — it reflects the narrowing of policy space under external economic pressure. The question is not whether India has changed its stance, but whether it still retains full agency in determining it. If refiners cut Russian imports primarily to preserve access to US financial markets, or to avert the threat of secondary sanctions, the decision ceases to be entirely sovereign.
This does not mean India has surrendered its independence; rather, it reveals that autonomy today must operate within an intricate web of interdependence. In an era of weaponised finance and trade, the assertion of sovereignty must contend with the realities of global capital flows and supply chains.
Economic and policy implications
From an economic perspective, the substitution of Russian crude imports with Middle Eastern or African oil will raise India’s import bill modestly. Analysts estimate that the shift could increase annual costs by less than 2 per cent — hardly catastrophic for a $3.7 trillion economy, but not insignificant either. The larger challenge lies in how India manages the transition without compromising its refining margins and export competitiveness.
The decision also carries diplomatic implications. India may seek reciprocity from Washington in its ongoing trade negotiations, expecting that a reduction in Russian oil purchases will be rewarded with tariff concessions or improved market access. But dependence cuts both ways: having adjusted to US preferences once, India may find it harder to resist similar demands in future.
For the refining sector, the new compliance environment adds layers of complexity. Every shipment, payment, and contract must now be scrutinised for sanction risk. State refiners and private players alike are forced to operate within an externally defined rulebook. Energy security, once measured by volume and diversity of suppliers, must now account for regulatory exposure and financial risk.
Geopolitically, the optics matter. Moscow has been a long-standing strategic partner in defence, energy, and nuclear cooperation. A visible scaling-down of crude imports could be interpreted in Moscow as a tilt towards Washington, even if India insists that it is merely adapting to practical constraints. The fine balance that defined India’s foreign policy for decades — a careful act of walking with many and aligning with none — is now being tested in real time.
Reconciling autonomy with interdependence
India must accept that strategic autonomy in the twenty-first century cannot mean isolation or defiance. It must mean the ability to pursue national interests despite the gravitational pull of great-power politics. That requires not only diplomatic skill but institutional resilience.
To preserve genuine independence, India must build redundancy into its energy system — developing multiple supply chains, enhancing domestic refining flexibility, and strengthening strategic petroleum reserves. The answer also lies in using diplomacy as leverage, not concession. If India’s recalibration away from Russian crude helps unlock a fairer trade deal with the US, it should be seen as strategic bargaining, not surrender.
Equally, India must strengthen its domestic governance of sanction risk. Refiners, banks, and regulators should coordinate through a structured framework that anticipates future financial restrictions rather than reacting to them. Such foresight can prevent external constraints from dictating internal decisions.
In this sense, strategic autonomy must evolve from an idealistic slogan into a pragmatic framework — one that balances freedom of choice with the discipline of global engagement.
A test of independence, not its end
The decision to reduce Russian crude imports underlines the reality that autonomy today is not absolute. It must be earned, negotiated, and sustained through strength — in energy diversification, economic resilience, and diplomatic finesse. India’s policymakers would do well to treat this moment not as a capitulation to US sanctions, but as a strategic recalibration that restores balance between cost, security, and sovereignty.
The petroleum and external affairs ministries have a narrow window to act. They must steer the transition in a manner that preserves the credibility of India’s independent foreign policy, while insulating its economy from external shocks. The challenge is not to reject interdependence, but to master it.
In the coming years, India’s claim to strategic autonomy will be tested less by words than by its ability to shape global outcomes in energy and trade. How New Delhi manages this crossroads — between Russian Crude Imports and Washington’s sanctions — will determine whether autonomy remains an aspiration or a living principle of Indian statecraft.