India continues to import Russian oil, basing its decisions solely on economic considerations despite a new tariff threat from the US.
Here are the key points:
- Economic Rationale: Indian oil refiners, including Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL), are purchasing Russian crude because it is offered at a discount. They base their buying decisions on the pricing and characteristics of the oil.
- Fluctuating Imports: The volume of Russian oil imports has varied month-to-month, directly tied to the level of discounts. For instance, imports were lower recently when discounts narrowed, but officials state the overall intent to continue buying has not changed.
- Post-Invasion Shift: Before Russia’s invasion of Ukraine in 2022, Russian oil made up less than 1% of India’s total oil imports. Since then, it has become a major supplier, now meeting approximately 30% of India’s oil requirements.
- US Tariff Threat: President Donald Trump announced an additional 25% tariff on US imports from India—raising the total duty to 50%—as a penalty for the country’s continued purchase of Russian oil.
- Official Stance: Indian officials maintain that the country is not violating any international sanctions. They have received no instructions from the government to either increase or decrease purchases from Russia or any other country and are conducting business as usual.