India’s strategy of buying discounted Russian crude oil is facing a fresh geopolitical challenge after the US House of Representatives passed a legislation that could allow Washington to impose tariffs of up to 100% on countries purchasing Russian oil and gas.
The move could put pressure on India’s energy security, export sector and trade relations with the US, as New Delhi has emerged as one of the largest buyers of Russian crude since the Russia-Ukraine conflict disrupted global oil markets.
For the past few years, Russian oil has provided Indian refiners with a steady supply of crude at competitive prices. After Western nations reduced purchases from Russia following the Ukraine invasion, Indian refineries increased imports, helping reduce the cost burden of one of the country’s largest import items.
However, the same arrangement has now become a point of international tension.
The US legislation gives President Donald Trump wider powers to impose sanctions on Russia and levy secondary tariffs on countries that continue purchasing Russian energy.
India and China are expected to be among the most affected countries because they account for a significant share of Russia’s crude exports.
Between December 2022 and August 2026, China accounted for around half of Russia’s crude exports, while India’s share was about 37%, according to the Centre for Research on Energy and Clean Air (CREA).
India’s dependence on Russian oil has grown significantly in recent years. In fiscal 2026, Russia supplied 30.3% of India’s crude oil imports, worth around $40.8 billion, out of the country’s total crude import bill of $134.7 billion.
In July 2026, Russian crude accounted for more than half of India’s oil imports. Other major suppliers such as the UAE, Saudi Arabia, Venezuela, Brazil, Oman and the US contributed significantly smaller shares.
India imports more than 88% of its crude oil requirements, making a stable and affordable energy supply crucial for economic growth.
The shift towards Russian crude after 2022 helped India save billions of dollars by taking advantage of discounted supplies. According to estimates by the Council on Energy, Environment and Water (CEEW), India saved around $12.6 billion through increased purchases of Russian oil.
However, replacing Russian crude would not be easy. Alternative supplies from other countries could increase costs due to higher crude prices, longer shipping routes, freight expenses and insurance charges.
Indian refineries are also configured to process different grades of crude, and switching suppliers at a large scale could require operational adjustments.
The proposed US tariff is not a direct tax on Russian crude entering India. Instead, it could affect Indian exports to the American market.
The US is one of India’s largest trading partners. Key Indian exports to the US include electronics, pharmaceuticals, machinery, jewellery, chemicals, textiles and petroleum products.
In 2025, the US imported goods worth around $104 billion from India, while total bilateral trade in goods and services was approximately $240 billion.
A sharp rise in tariffs could affect Indian exporters, the rupee, refinery margins and the country’s trade balance.
India’s role in the Russian oil trade extends beyond imports. Indian refineries process Russian crude into petroleum products, which are then supplied to domestic and international markets.
Disruptions at Russian refineries due to attacks on energy infrastructure have increased Russia’s need for imported fuel products. India has emerged as a major supplier of refined petroleum products, including petrol produced from Russian crude processed at Indian facilities.
This creates a more complex situation, as India is not only a buyer of Russian crude but also an important part of the global fuel supply chain.
The latest US move creates a difficult calculation for Indian policymakers: whether the savings from cheaper Russian crude outweigh potential risks to exports and trade relations with Washington.
The final impact will depend on several factors, including the level of tariff eventually imposed, global crude prices, availability of alternative suppliers and possible exemptions or agreements between India and the US.
China, which buys a larger volume of Russian oil than India, has a different economic position because of its deep integration with global supply chains and its larger trade relationship with the US.
For India, the challenge is not only reducing dependence on Russian oil but also strengthening energy security through diversified supply sources.
Beyond crude oil, India also faces vulnerabilities in other energy areas. The country imports a significant share of its liquefied petroleum gas (LPG), which is used by hundreds of millions of households. Strategic petroleum reserves remain limited compared with some other major economies.
As Washington’s tariff threat develops, India will have to balance three critical priorities — affordable energy, export competitiveness and maintaining strategic trade relationships.