After a steady rise for nearly three years, India’s imports of Russian crude oil declined significantly in November 2025. This followed sanctions by the United States on Russian energy companies and the imposition of substantial reciprocal tariffs on India, including duties on Russian oil purchases. In response to these economic pressures, Indian oil companies are reassessing their trade relationships with Russian counterparts.

This piece examines India’s response to U.S. sanctions and tariffs, specifically assessing the immediate market consequences, such as alterations in import costs, and the broader strategic implications for India’s energy security and foreign policy orientation.

The Scale of India’s Dependence

India is the world’s third-largest consumer of crude oil after the United States and China. In 2025, consumption rose to 265.7 million metric tonnes (MMT), growing at a rate of 3.7 percent annually. Limited domestic production capability forces India to import around 89 percent of its needs.

Before the Russia–Ukraine conflict began in 2022, Russian oil accounted for about 2.5 percent of India’s imports. In response to sanctions imposed by the EU, the G7, and the United States to economically isolate Russia and curtail its oil exports, Moscow offered discounts to Asian buyers, pricing its oil below the Brent benchmark[1]. This catalyzed an import shift and allowed Indian refiners to benefit by approximately $12.2 per barrel. Consequently, India’s oil imports from Russia rose to 21.6 percent in FY 2022–23, making it the second-largest importer of Russian oil, 35.9 percent in FY 2023–24, and 35.8 percent in FY 2024–25.

U.S. Sanctions and Tariffs

This import pattern set the stage for U.S. actions targeting India’s energy trade with Russia. On August 27, 2025, the U.S. imposed a 25 percent duty on India’s Russian oil purchases on top of the 25 percent reciprocal tariffs. Sanctions on Russian companies Rosneft, Lukoil, and their subsidiaries were announced on October 22, taking effect on November 21, 2025. Additionally, President Trump has repeatedly avowed to stop India’s oil imports from Russia in an attempt to increase “pressure on Russia’s energy sector and degrade the Kremlin’s ability to raise revenue for its war machine.”

Purchases from Rosneft and Lukoil comprise 60 percent of India’s imports, compelling it to explore other sources. Meanwhile, India’s oil imports from the U.S. increased to 10.7 percent in October 2025 from around 3 percent in 2024. This partly reflects the efforts under “Mission 500,” announced in February 2025, to increase India-U.S. bilateral trade to $500 billion by 2030. It further reflects the orders placed after the August 2025 duties and tariffs, given the 45–55-day shipping period. The impact, if any, of the October sanctions will be evident in the coming months.

Market Response and Realignment

The U.S. sanctions precipitated an 8 percent increase in global Brent crude oil prices. The price escalation is projected to increase India’s annual oil import expenditure by $6–7 billion. Further, Indian refineries are likely to reduce reliance on discounted Russian oil, leading to a spike in operational costs by around 2 percent.

The top importer of Russian crude, Reliance Industries, reduced orders from the sanctioned companies by 13 percent in October 2025, while increasing monthly imports from Saudi Arabia to 87 percent and Iraq to 31 percent, raising their combined share of imports from 26 percent in September 2025 to 40 percent in October 2025. State-controlled refineries, Mangalore Refinery & Petrochemicals Ltd., and HPCL-Mittal Energy Ltd., have also announced plans to cease their imports. Combined, these companies had accounted for over half of total Indian oil purchases from Russia in the first half of 2025.

Reports suggest that Indian refineries accelerated purchases of Russian crude ahead of the November 21 deadline to evade sanctions. Nayara Energy, which operates India’s second-largest refinery in Vadinar, Gujarat, is expected to continue importing from the sanctioned entities as Rosneft owns 49.13 percent of its stake. Other Indian refineries, such as Indian Oil Corp., aim to diversify or continue sourcing through unsanctioned intermediaries.

Strategic Implications

The United States’ sanctions on Russian oil companies present three implications for India’s trade and diplomatic posture:

Western Scrutiny

The EU and the UK aligned with the U.S. sanctions, indicating improved transatlantic coordination on Russia policy in 2025. This may heighten Western scrutiny of India’s oil trade with Russia. Between 2018-2024, India’s exports of petroleum products to the EU increased substantially. Under the “import ban on refined products obtained from Russian crude oil” announced in the October 2025 EU compliance guidelines, in effect from January 2026, exports to the EU may potentially decline.

India’s Balancing Act

In October 2025, India’s crude oil imports from the United States reached their highest level since March 2021. This surge was primarily driven by three factors: the $500 billion bilateral trade target under “Mission 500,” the need for a diplomatic response to high reciprocal tariffs, and efforts to avert the threat of secondary sanctions on Indian refineries.

However, these rising imports do not indicate that Indian dependency on Russian oil will reduce. Though sanctions on Rosneft and Lukoil may affect import patterns in the coming months, these companies only account for 49.2 percent of Russia’s total production. The remaining 50.8 percent of unsanctioned Russian crude remains accessible. Further, the “medium‑sour crude” from Russia allows India to produce balanced yields of refined light‑naphtha, diesel, and fuel oil, and is ideally suited to its refinery infrastructure. New Delhi must therefore continue to balance its economic objectives with Russia and further bilateral trade talks with the United States.

Import Diversification

In its balancing act between the U.S. and Russia, India aims to attain energy security with careful strategic maneuvering. The Indian government has articulated additional potential for diversification that “there is an adequate supply and alternative sources of crude oil in the international market even when one supply stream is disrupted,” as stated by Petroleum and Natural Gas Minister Hardeep Singh Puri. Indian companies have begun diversifying their oil imports from Iraq and the UAE and can gradually increase purchases from Latin American countries like Brazil, Argentina, Colombia, and Guyana, and West African countries like Nigeria, Ghana, Togo, and Senegal.

The Way Forward

New Delhi is following an economy-first approach, where entirely weaning off Russian oil will not be pragmatic. However, for Washington, the decline in Indian imports of Russian oil is a critical checkpoint to further bilateral trade talks.

In the short term, the United States and allied sanctions may moderate these imports, and gradual diversification can allow India to maintain its strategic autonomy. Beyond the impact of geopolitical shifts, India must also aim for a balanced energy portfolio.

[1] The Brent benchmark is a global pricing standard used to price over three-quarters of the world’s traded oil. “BrentTM the world’s crude benchmark,” Intercontinental Exchange, September 2020, https://www.ice.com/insights/market-pulse/brent-the-worlds-crude-benchmark#.