India to buy Russian oil despite Trump’s threat

Sat Aug 02 2025
Ramesh Sridharan (992 articles)
India to buy Russian oil despite Trump’s threat

India will persist in purchasing crude oil from Russia, despite US President Donald Trump’s warning of a penalty, as reported by sources, citing two Indian government sources who requested anonymity due to the sensitive nature of the issue. “These are long-term oil contracts,” a source stated. “It is not so simple to just stop buying overnight.” The NYT reported that two unnamed senior Indian officials stated there had been no change in Indian government policy. According to one official in the news report, the government has “not given any direction to oil companies” to reduce imports from Russia.

On Friday, Indian authorities stated that their energy decisions are driven by national interest and market factors. Trump recently stated that India may halt its oil purchases from Russia, describing it as a “good step” if accurate. India’s foreign ministry stated on Friday that no such decision has been made. The same day Trump stated to the media, “I understand that India is no longer going to be buying oil from Russia.” “That’s what I heard — I don’t know if that’s right or not — but that would be a good step.” His comment came after the US government’s announcement of a 25 per cent tariff on all goods imported from India, effective August 1, along with an unspecified penalty. This action reflects Washington’s increasing frustration with India’s strong connections to Russia, particularly in the areas of energy and defense.

In mid-July, Trump issued a stronger threat, warning of up to 100 percent tariffs on any country that continues to buy oil from Russia unless there is a complete peace agreement between Russia and Ukraine. Earlier this week, he criticized India’s economic partnership with Russia. Trump stated on Truth Social, “I don’t care what India does with Russia.” “They can take their dead economies down together, for all I care.” He reiterated persistent concerns regarding India’s elevated tariffs, stating, “Their tariffs are too high, among the highest in the world.” The US has engaged in minimal business with India for this reason. The US announced a 25 per cent tariff on all Indian exports to the United States, effective August 7.

In response to the US statements, India’s Ministry of External Affairs stated that the country makes decisions on oil purchases based on availability, global prices, and domestic needs. “We look at what is there available in the markets, what is there on offer, and also what is the prevailing global situation,” said foreign ministry spokesperson Randhir Jaiswal during a press briefing on Friday.

He stated that India and Russia maintain a “steady and time-tested partnership” and emphasized that New Delhi’s global relationships should not be evaluated through the perspective of any third country. Russia remains India’s top crude oil supplier, making up approximately 35 percent of total oil imports. Between January and June 2025, India imported approximately 1.75 million barrels per day of Russian oil, a slight increase compared to the same timeframe last year, according to Reuters. Other key suppliers are Iraq, Saudi Arabia, and the UAE. India ranks as the third-largest importer and consumer of oil globally.

US Secretary of State Marco Rubio expressed concern over India’s oil purchases from Russia, stating it is “most certainly a point of irritation” in the US-India relationship. In an interview with Fox Radio on Thursday, Rubio remarked that it is typical for allies to have differing views on certain foreign policy issues. “India is a strategic partner.” “Like anything in foreign policy, you’re not going to align 100 per cent of the time,” he said.

Ramesh Sridharan

Ramesh Sridharan

Ramesh Sridharan is our Stock Market Correspondent covering events and daily movements of stock markets in Asia. He is based in Mumbai