India and Russia Oil Trade: Subsequent to the Russian invasion of Ukraine in 2022, India began ramping up imports of crude oil from Russia due to a buyer’s market with steep discounts and changing geopolitical developments. By mid-2025, Russia represented close to 35-40% of India’s oil imports and became India’s primary source of crude oil.
During FY 2023-2024, 35% of crude imports came from Russia, which increase from 23% the year prior.
This trend continued into FY 2024-25, with Russian crude oil imports worth $50.28 billion accounting for almost 78% of the total $63.84 billion spent by India on imports from Russia.
Estimates put India’s savings at $7.9 billion on oil imports in FY 24, thanks to discounted Russian crude. This will help narrow the current account deficit.
Various Indian companies, such as ONGC Videsh, Oil India, Reliance, BPCL, IOCL, and Nayara Energy, backed by Rosneft, have invested billions into Russian energy assets, including significant blocks like Sakhalin-1 and the Vadinar refinery, which processes around 72% of Russian crude.
Some oil trades with India are being attempted to be settled through the rupee-rouble mechanism, but rupee utilization is severely restricted as Russia prefers hard currencies such as USD or the UAE dirham, thus aggravating the difficulty of blocking settlements due to Western sanctions.
The US placed pressure on India threatening 25% tariffs and further sanctions if India continues to import oil from Russia at high volumes, yet Indian leadership defended its energy policy as a sovereign right. RBI officials have attempted to downplay inflation concern arising from the trade shift, calling it manageable in the middle of such tensions.
Also Read: Trump Threatens India with Major Tariff Hike Over Russian Oil Purchases
Although Russia remains central to India’s energy calculus in terms of pricing, volume, and logistics, the country is gradually diversifying its crude sources with increasing imports from the US, Saudi Arabia, and the UAE. In its part, the country is also extending its Strategic Petroleum Reserve from 75 days to 90 days of cover to assist in building an energy resilience.
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