India’s growing imports of Russian crude oil have become a major point of contention between the United States and India in 2025. Former US President Donald Trump has openly criticised India for continuing to buy Russian oil amid the ongoing war in Ukraine. Trump has threatened to impose heavy tariffs on India’s exports related to Russian oil and defence imports. However, this aggressive stance contrasts with earlier US policies that encouraged India to import Russian crude to stabilise global energy markets. The issue marks complex geopolitical and economic dynamics involving energy security, sanctions, and global diplomacy.
Background of India’s Russian Oil Imports
Before the Ukraine war, Russia supplied less than 2% of India’s oil. India mainly relied on West Asian countries like Saudi Arabia and Iraq. After Russia’s invasion of Ukraine in 2022, Western countries imposed sanctions and stopped buying Russian oil. Russia offered steep discounts to alternative buyers. India seized this opportunity, rapidly increasing Russian oil imports. Within months, Russia became India’s largest crude oil supplier, accounting for 35-40% of its imports.
US Policy Shift and Contradictions
During the Biden administration, US officials implicitly and explicitly encouraged India to buy Russian crude. This was to keep global oil prices stable and avoid economic shocks. US sanctions focused on limiting Russia’s oil revenue through a $60 per barrel price cap on seaborne Russian crude, not on stopping all purchases. India was not part of the price cap coalition and legally continued importing Russian oil without violating sanctions. However, Trump’s later criticism and tariff threats represent a sharp policy shift and frustration with Russia’s war actions.
India’s Defence Against Criticism
India defends its imports as a response to diverted traditional supplies and global market needs. Indian refiners also export petroleum products to Europe, but these are legally distinct from Russian oil due to refining processes. India emphasises that its actions align with international law and earlier US policy stances. Indian officials reject allegations that their trade supports Russia’s war efforts directly.
Global Energy Market Implications
India’s imports helped prevent a sharp rise in global oil prices by maintaining supply. The US and Europe feared that cutting off Russian oil completely would destabilise energy markets and hurt economic recovery post-pandemic. The price cap regime aims to limit Russia’s oil revenue without disrupting supply. India’s role as a major buyer outside the coalition complicates enforcement but helps keep markets balanced.
Geopolitical and Trade Tensions
Trump’s threats of tariffs on Indian exports and defence imports reflect broader US-India trade tensions. These actions come amid ongoing negotiations and strategic competition. The dispute over Russian oil imports adds a new layer to the complex bilateral relationship. It also illustrates how global conflicts and sanctions policies impact international trade and diplomacy.
Sanctions and Legal Nuances
US-led sanctions target Russian oil revenue but allow limited trade under the price cap. Shipping and insurance restrictions apply only to coalition members. India’s imports without coalition shipping services remain legal. Additionally, refined petroleum products lose their Russian origin status under sanction rules, allowing their export to Europe. This legal framework complicates accusations against India.
Future Outlook
The EU plans to ban imports of refined petroleum products from Russia by January 2026. This may affect India’s fuel exports to Europe. Meanwhile, US-India relations may face further strain if tariff threats escalate. The evolving global energy landscape will continue to influence diplomatic and trade policies among major powers.
Questions for UPSC:
- Taking the example of India’s Russian oil imports, discuss the impact of international sanctions on global energy markets and diplomatic relations.
- Examine the role of energy security in shaping foreign policy decisions of emerging economies like India in the context of the Ukraine war.
- Analyse the effectiveness of economic sanctions as a tool of international diplomacy. How do sanctions impact neutral countries’ trade policies?
- With suitable examples, discuss the challenges of balancing national interests and global commitments in international trade and diplomacy.
