Despite Donald Trump's punitive tariff, India keeps importing Russian oil

India gets deep discounts on Russian crude and its exports of petroleum products to China have increased

President Donald Trump said this week the United States and India have reached a trade agreement and New Delhi has committed to stop buying oil from Russia. Trump’s treasury secretary, Scott Bessent, said in January that India had stopped purchasing Russian oil after the US last year imposed a 25 per cent punitive tariff. But India relies heavily on Russian oil and has now increased its exports of petroleum products to China, America’s other great rival.

 

In the first eight months of FY26, nearly 33 per cent of India’s imports of crude oil came from Russia — down from about 38 per cent in FY25 (Apr-Nov). The share of the US in such imports by India increased from 4.57 per cent in FY25 (Apr-Nov) to 8.13 per cent in FY26 (Apr-Nov).

 

Trump will likely appreciate the trend but Russia dominates India’s oil basket, with its share rising from 31 per cent in September to 34 per cent in November 2025. The US’s share increased to 13.19 per cent in November 2025 — the highest since December 2022. 

 

Discounts make Russian oil lucrative for India: The average unit price of importing such crude was $482.7 per tonne in November, the lowest since June 2023.

 

Crude oil imports from Iraq were even cheaper, with the unit price at $472.9 per tonne in November. The unit price of US oil imports was $523.3 per tonne — $40-50 more for every tonne of crude oil India imported from Iraq or Russia. 

 

Bessent had said that the European Union (EU) is funding Russia’s war against Ukraine by purchasing petroleum products from India. However, EU’s imports of Indian petroleum products declined from $12.04 billion in FY24 (Apr-Nov) to $8.77 billion in the first eight months of FY26 - a drop of over 27 per cent year-on-year.

 

India’s petroleum product exports to China more than doubled from $0.84 billion in the first eight months of FY25 to $1.78 billion in FY26 (Apr-Nov), making the Communist nation the sixth-largest export market for such Indian products.