India’s Ministry of External Affairs announced on Thursday that the country aims to “broaden energy procurement” from the United States following President Trump’s comments about New Delhi’s intention to reduce its oil purchases from Russia.
Historically a close ally of the Soviet Union and Russia, India significantly increased its Russian crude oil imports after the latter’s invasion of Ukraine in 2022, benefiting from discounted rates due to European sanctions. Despite having a large refining capacity, India relies heavily on crude oil imports because its domestic production is minimal. Alongside fulfilling local demand, India profits by exporting refined products like gasoline and diesel, including to Ukraine, which has stopped procuring Russian oil refined in India to avoid funding invasions.
Consequently, Russia is under considerable pressure, particularly from the U.S., to curb its financial support for the economy and its military actions in Ukraine. Indian officials have responded to this pressure by accusing European leaders of applying double standards, as those countries continue to depend heavily on Russian natural gas for heating without facing similar scrutiny.
While the Biden administration struggled to engage India regarding this issue, President Trump shifted U.S. trade dynamics this year, including tariffs on Indian goods and addressing bilateral disputes. He has repeatedly expressed a desire to convince Prime Minister Modi to cease purchasing Russian oil in an effort to bring an end to the invasion, but India has yet to comply. In response, the White House imposed steep tariffs of 50% on India to encourage the cessation of aid to Russia.
On Wednesday, Trump mentioned that he was optimistic Prime Minister Modi would begin replacing Russia as a major oil supplier.
“[Modi] assured me today that they will not buy oil from Russia. That’s a significant step,” President Trump shared with reporters at the Oval Office. “Now we have to persuade China to follow suit.”
India’s Ministry of External Affairs did not confirm or refuse Trump’s assertions, but it did indicate that the government is contemplating increasing crude oil purchases from the U.S.
“India is a crucial importer of oil and gas. Our main priority has been to safeguard the interests of Indian consumers in this fluctuating energy landscape,” noted Randhir Jaiswal, spokesperson for the Ministry of External Affairs. In an official statement, he emphasized, “Energy price stability and supply security are our energy policy’s dual objectives, along with suitable diversification based on market conditions.”
“Regarding the United States, we have historically aimed to broaden our energy procurement, and progress has been steady in the last decade,” the statement concluded. “The current administration shows interest in deepening energy cooperation with India, and discussions are ongoing.”
Since President Putin initiated a full-scale invasion of Ukraine in February 2022, India’s reliance on Russian oil has surged. As of September, data shows that Russia is India’s top oil supplier, sending 1.6 million barrels per day that month. While this is a slight drop from the 1.7 million barrels per day in August, it does not change Russia’s status as the largest supplier to India.
According to Reuters, citing unnamed sources, Indian refineries are currently refining oil and looking to shift from Russian suppliers to other countries.
“Indian refiners mentioned they haven’t received formal guidance from the government to cease buying Russian crude oil,” the source reported. “They pointed out that abruptly stopping purchases could spike global oil prices and lead to inflation.”
In August, President Trump imposed additional tariffs of 50% on Indian goods. Analysts estimate that these tariffs could wipe out profits from discounted Russian crude purchases, potentially costing India about $37 billion next year, while expected discounts on Russian crude could total around $17 billion.
“It seems we might have lost India and Russia to the intense influence of China. Here’s to hoping for a prosperous future!” Trump expressed in a September post on his Truth Social platform, suggesting that trade negotiations with India have stalled.
Over the last couple of months, the Indian government has appeared hopeful about ongoing negotiations to remove those 50% tariffs. Following discussions in mid-September, India’s Ministry of Commerce noted that dialogues were “positive.” Commerce Minister Piyush Goyal soon began predicting that an agreement beneficial for both sides could be within reach by November.
“We are optimistic that matters will be back on track soon and a bilateral trade agreement will be finalized by the fall or November as previously discussed by the two leaders,” he stated during an investor conference in Mumbai.
