India will continue buying Russian oil despite Trump's threats

Post by : Monika

Photo: Reuters

India has made it clear it will continue importing oil from Russia, even after former U.S. President Donald Trump threatened to impose steep trade tariffs on countries that do so. Government officials have confirmed that there has been no change in national policy or instructions to halt its purchases of Russian crude.

Why India Is Holding Firm
Despite strong pressure from the United States—where Trump had threatened to impose penalties and tariffs as high as 100%—Indian officials say no official directive has been issued to reduce or stop buying Russian oil. India remains heavily reliant on Russian crude, which made up around 35% of its oil imports.

This position reflects India's priority to secure energy supplies and serve its national interest, rather than yield to external pressure.

What Triggered the U.S. Response
Trump’s threats came in recent public posts and remarks. On July 14, he warned about imposing full import tariffs on countries that continue Russian oil purchases unless Moscow reaches a peace deal with Ukraine. Later, he announced a 25% tariff on Indian goods, citing India’s Russian energy ties as part of the rationale.

Though Trump later said he did not care what India does with Russia, India’s stance has not shifted. Reports that India may have paused some state-owned refinery orders were clarified by officials, stating those were decisions made by individual companies—not government policy.

Recent Pause by State Refiners
State-run oil companies in India—such as IOCL, HPCL, and BPCL—did not place new orders from Russia in the past week. Market sources say this pause was driven by shrinking price discounts and logistical challenges, rather than political pressure. Private refiners, such as Reliance Industries and Nayara Energy, continue buying Russian crude.

Why India Still Needs Russian Oil
Since sanctions hit Russia following the Ukraine war, Russian oil has been sold at deep discounts. India significantly increased its purchases starting around 2022. Russia has supplied billions in revenue, and reliable access to energy remains critical for India’s growing economy.

With that dependence and limited alternatives, India's decision to continue purchases aligns with its principle of safeguarding energy needs and economic stability.

What If India Faces U.S. Tariffs?
If the U.S. imposes new penalties on India, the economic impact could be serious. Some estimates suggest the tariffs could slow growth or disrupt trade in sectors like agriculture and manufacturing. India is already negotiating a bilateral trade deal with the U.S., and new tariffs may raise tensions between the two nations.

Potential Impact on Russia and Oil Markets
Russia earns nearly $200 billion annually from oil exports. Losing India as a major customer would hit it hard. Some analysts warn Moscow might retaliate by disrupting pipeline routes important to U.S. firms, such as the CPC pipeline, which could destabilize oil supply globally and raise prices.

India currently imports about 2 million barrels per day from Russia, making it a crucial global energy source. Any major change in that supply chain could affect both countries and markets worldwide.

India has made it clear its oil imports will be guided by national needs, not external pressure. While some state refiners have paused purchases amid narrowing discounts and logistical concerns, no government order mandates a reduction in Russian oil imports.

India continues to balance its traditional partnership with Russia in energy and defense with its growing ties to the U.S. Despite looming U.S. tariffs, India’s current policy remains unchanged: keep sourcing energy from reliable suppliers to meet its growing economic demands.