India to continue Russian oil purchases despite US tariffs

India's finance minister stated on Friday that the country would continue purchasing Russian oil due to its economic benefits. 

This decision comes despite the Donald Trump administration's imposition of substantial import tariffs on Indian goods, partly attributed to India's energy acquisitions from Moscow.

India, the world's third-largest oil importer and consumer, has no intentions of discontinuing Russian oil supplies, according to Finance Minister Nirmala Sitharaman in an interview with local news channel CNN-News18.

Geopolitics 

India has emerged as the primary purchaser of Russian seaborne crude, capitalising on discounted prices. This shift occurred as Europe and the US ceased importing Russian oil following Moscow's 2022 invasion of Ukraine.

New Delhi asserts that its acquisition of Russian oil has stabilized the markets.

US President Donald Trump, actively engaged in efforts to mediate a resolution to the ongoing conflict in Ukraine, has publicly stated that India's substantial oil imports are inadvertently contributing to the financing of Moscow's military operations. 

In response to this assessment, the Trump administration recently implemented a significant economic measure, imposing a 50% tariff on oil imports originating from India. 

This tariff was officially put into effect last month, signaling a direct financial consequence for India's trade practices in the context of the Ukraine conflict. 

The move underscores the US' stance on nations whose economic activities are perceived as indirectly supporting Russia's war effort, even if those activities are undertaken for domestic energy security or economic stability.

Oil imports

Sitharaman said:

She further stated that the majority of India's foreign exchange expenditure is allocated to acquiring crude oil and refined fuels.

In the fiscal year ending March 2025, oil and refined fuels purchased from international markets constituted approximately 25% of the nation's total import expenditures, according to a Reuters report. 

This significant reliance on overseas energy sources underscores a critical aspect of the country's economic landscape and its energy security strategy. 

The fluctuating global oil prices and geopolitical events directly impact the national budget and can influence domestic fuel prices, subsequently affecting industries and consumers alike. 

Sitharaman added:

Modi meets Putin

This week, Chinese President Xi Jinping hosted a summit in Tianjin, where Indian Prime Minister Narendra Modi and Russian President Vladimir Putin demonstrated their solidarity against the West.

Some observers have dubbed the meetings, which included leaders from countries like North Korea and Myanmar, as "the Axis of Upheaval." 

Modi's presence at these meetings was seen by some experts as a result of New Delhi's disagreement with Washington.

Negotiations between the two nations regarding a deal to lessen the US tariff load on Indian products have collapsed.

Since the cancellation of the US trade officials' visit to New Delhi last month, there have been no physical meetings between the two sides.

US Treasury Secretary Scott Bessent has accused India of "profiteering" by importing Russian oil at reduced prices and subsequently reselling the refined fuel at an elevated rate.

On Friday, Trump took to Truth Social to comment on Putin and Modi's presence in China.

"Looks like we’ve lost India and Russia to deepest, darkest, China. May they have a long and prosperous future together!" he wrote.