India, Russian Oil, and US Tariffs: A Detailed Explainer
In early 2026, United States Treasury Secretary Scott Bessent stated that India had “geared down and stopped” buying Russian oil after punitive trade measures were taken by the US government, specifically tariffs linked to New Delhi’s petroleum imports from Moscow. These remarks, made against the backdrop of broader geopolitical tensions, have sparked widespread discussion and debate about global energy markets, geopolitical strategy, and India’s trade and foreign policy priorities.
To understand this development fully, it’s important to unpack the context: why India bought large amounts of Russian crude in the first place, what the US tariffs are and why they were imposed, how India’s import patterns have actually changed, and what this means for people, markets, and future diplomacy.
Background: India’s Oil Needs and Russia’s Role
India is one of the largest consumers and importers of crude oil in the world, with its economy heavily dependent on petroleum products for transportation, industry, and power generation. Domestic production meets only a small fraction of its needs, leaving the country reliant on foreign suppliers.
Before 2022, Russia accounted for a small share of India’s oil imports — under 3% in 2021. But following Russia’s invasion of Ukraine in February 2022, Western countries including the United States, European Union, and others moved to sanction Russian energy exports in an effort to cut off key revenue streams for the Kremlin. In response, Moscow offered discounted crude to buyers willing to source outside Western markets — notably India and China. This made Russian oil economically attractive to Indian refiners.
Over the course of 2022 to 2024, Indian imports of Russian oil grew rapidly, at times accounting for 35–40% of the country’s total crude purchases. By making use of steep discounts — reportedly as much as 10–15% below global benchmark prices at times — India’s refiners could reduce the overall cost of imported crude and help keep fuel prices lower for consumers and industry alike.
This shift was consequential not only for India’s energy mix but also for Russia’s export portfolio, as New Delhi became one of Moscow’s largest customers for crude alongside China.
US Tariffs and the Rise of Trade Tensions
In mid-2025, under President Donald Trump’s administration, the United States imposed a series of tariffs on Indian exports, linked explicitly to India’s continued purchases of Russian oil. The measures began with a 25% “reciprocal” tariff on Indian goods in July/August 2025 and were followed by an additional 25% penalty tariff tied directly to Russia-linked purchases, bringing the combined rate to 50% for many Indian products entering the US market. These penalties were framed in Washington not just as trade policy but as part of a broader effort to pressure Russia economically and limit global funds that could support its war in Ukraine.
In early 2026, a proposed Russia Sanctions Bill debated in the US Senate would empower the president to impose even steeper tariffs — reportedly as much as 500% — on countries that continue to buy Russian oil. Treasury Secretary Bessent used India as an example of a country that, he said, had responded to initial tariff pressure by scaling back purchases, contrasting its behavior with that of Europe and China, which he said continued significant Russian oil procurement.
Trump administration officials have argued these tariffs are necessary not only to influence Russia’s war financing but also to address persistent US trade imbalances and to incentivize allies to purchase more American energy. The White House, however, has also faced criticism for what some see as conflating trade policy with foreign policy goals, potentially complicating long-term strategic relationships.
What Has Actually Happened with India’s Russian Oil Purchases?
Treasury Secretary Bessent’s comment that India has “stopped buying” Russian oil reflects one interpretation of evolving import patterns — but the underlying situation is more nuanced.
Data Shows Partial Decline — Not Full Cessation
Independent trade data and industry reporting indicate that Indian imports of Russian crude did decline in late 2025, particularly in December, when volumes fell to levels not seen since early in the post-Ukraine era. Russia’s share of India’s crude basket dropped significantly, from previous peaks of roughly 35% or more to an estimated 27–30% in December 2025. Analysts attribute this in part to compliance challenges arising from Western sanctions, rather than a wholesale policy shift away from Russian oil.
Important refiners such as Reliance Industries reportedly halved or even paused imports from sanctioned Russian suppliers like Rosneft after new US and EU sanction measures targeted those firms. Other state-owned refiners cut back as well, though some continued to import Russian crude sourced from entities not yet under direct sanction.
Thus, while there has been a reduction in volumes from some Russian sources, India did not abruptly stop buying Russian oil across the board in January 2026. That differentiates the broader commercial reality from the simplified narrative sometimes offered in political statements.
Government Data Tracking
In response to US trade pressure, the Indian government has reportedly asked refiners to submit weekly data on Russian and US crude purchases to better monitor import flows and to provide more precise figures in ongoing trade negotiations with Washington.
Why India Has Been Cautious About a Complete Cut
There are multiple reasons India has been careful not to abandon Russian crude completely:
- Energy security: India imports over 85% of its crude requirements. Sudden changes in supply sources can create volatility in fuel availability and domestic prices.
- Economic calculations: Russian oil has often been cheaper than other sources, helping refiners lower input costs.
- Strategic autonomy: India has insisted it should be able to make sovereign decisions about its energy mix, resisting what it sees as third-party pressure.
- Global diplomatic balancing: New Delhi has cultivated historic ties with Moscow dating back decades, even as it deepens relations with Western powers and other partners.
Impact on People and Markets
Consumer and Industry Effects in India
A shift in India’s crude import sources can influence fuel prices for consumers. Russian oil’s relative discount helped reduce overall crude import costs, which in turn moderated petrol, diesel, and LPG prices at times — a significant issue for households and businesses. A sustained move away from that discount source could raise India’s import bill, potentially feeding into inflationary pressures unless alternative supplies like Middle Eastern, American, or African crude are competitively priced.
For Indian refiners, the reduction in Russian crude affects refinery throughput plans and businesses oriented toward export markets. Those facilities geared toward processing heavy Russian grades may need to adjust operations or source different crudes.
Trade and Diplomatic Relations
On the diplomatic front, the imposition of up to 50% tariffs on Indian exports to the US has raised tensions between two democracies that otherwise share strategic interests in the Indo-Pacific and countering rising geopolitical rivals. Some Indian policymakers and analysts argue that linking tariffs to energy purchases is unfair, particularly since the US, EU, and others continue other forms of trade with Russia.
For US exporters and consumers, elevated tariffs on Indian goods can disrupt supply chains and raise input costs, illustrating the mutual consequences of such trade measures.
Future Outlook
Trade Negotiations and Diplomatic Engagement
India and the United States continue to engage in trade talks aimed at reducing tariffs and reaching agreement on broader economic cooperation, even as disagreements persist. Weekly data tracking of crude imports and ongoing negotiations reflect an effort from both sides to find common ground.
Global Energy Market Trends
Global markets remain fluid. Russian oil — despite sanctions — continues to find buyers, and producers in OPEC and elsewhere are adjusting strategies in response to shifting demand patterns. Some analysts believe that India’s reduced Russian imports are temporary adjustments for compliance rather than a full strategic pivot.
Possible Scenarios
- Continued diversification: India may steadily increase imports from the Middle East, the United States, and Africa, reducing relative reliance on any single source.
- Diplomatic compromise: Trade and tariff disputes with the United States could be eased through negotiated agreements addressing energy cooperation and tariff reduction.
- Geopolitical balancing: India may continue to balance relationships with both Western powers and traditional partners like Russia based on strategic, economic, and domestic needs.
Conclusion
The claim by US Treasury Secretary Scott Bessent that India has “scaled back and stopped” buying Russian oil after American tariffs reflects part of an evolving reality — India’s crude import patterns have indeed shown a decrease in certain Russian supplies — but the situation is more complex than an outright halt. Reductions appear linked to sanction-related compliance pressures, commercial decisions by refiners, and ongoing diplomatic negotiations, rather than a simple policy shift prompted by foreign tariffs.
What remains clear is that energy policy, trade dynamics, and geopolitical interests are deeply interconnected in today’s global landscape. How India balances its national energy security, international trade relationships, and foreign policy priorities will remain a subject of close attention in the months and years ahead.