New Delhi: In a resolute defiance of US pressure, Union Finance Minister Nirmala Sitharaman has reaffirmed India’s commitment to purchasing Russian crude oil, asserting that the nation’s energy decisions will be guided solely by its own interests.
Speaking in an interview with Network18, Sitharaman declared, “India will continue to buy Russian oil. Where we source our oil is our decision, based on what suits our needs best.” Her statement, delivered amid escalating US tariffs and criticism, underscores India’s unwavering stance on energy security and economic pragmatism.
The US, under President Donald Trump, has intensified its scrutiny of India’s oil trade with Russia, imposing a hefty 50% tariff on Indian imports effective August 27. Half of this tariff — 25%— is a punitive measure explicitly tied to India’s purchase of Russian oil, which the Trump administration claims fuels Russia’s war machine in Ukraine.
Citing the International Emergency Economic Powers Act (IEEPA), US officials argue that the tariffs are necessary to address the “national emergency” posed by the Ukraine conflict and to bolster peace efforts. Additionally, the US has accused India of buying cheap Russian crude and reselling refined products at a premium, indirectly supporting Russia’s economy.
India’s Unapologetic Defence
Sitharaman’s response was unequivocal: India’s oil imports from Russia are entirely legal and not subject to international sanctions. She highlighted that the discounted Russian crude has been a financial lifeline for India, the world’s third-largest oil consumer, which imports 85% of its energy needs. “Oil is our biggest foreign exchange expenditure. We will buy where it suits us best,” she said, pointing to the economic benefits of sourcing cheaper Russian oil, which is currently discounted by $3–4 per barrel compared to pre-war prices. In contrast, US crude is $3–5 more expensive per barrel, making Russian oil a cost-effective choice.
A Bloomberg report noted that Russia has further slashed prices for shipments loaded in September and October, offering India even greater savings. These discounts have not only kept India’s import bill in check but also stabilised global oil prices, benefiting economies worldwide. Union Oil Minister Hardeep Singh Puri echoed this sentiment earlier this week, stating, “India’s purchases have helped prevent oil prices from spiralling, adhering to all international rules and using legal shipping channels.”
A Geopolitical Tightrope
The US criticism, which includes inflammatory remarks from White House trade adviser Peter Navarro labelling the Ukraine conflict “Modi’s war,” has strained India-US relations. The additional 25% “reciprocal” tariff reflects broader trade tensions, with Trump recently expressing frustration on Truth Social, claiming India and Russia have been “lost to China.” Yet, India’s External Affairs Minister S Jaishankar has countered such accusations, pointing out the hypocrisy of Western nations that continue to trade with Russia while criticising India. “If you don’t like our oil purchases, don’t buy our refined products,” Jaishankar retorted last month, highlighting that Europe and the US also engage in significant trade with Moscow.
India’s position is bolstered by its strategic autonomy and economic imperatives. Since the Russia-Ukraine conflict began in 2022, India has ramped up its imports of Russian crude, which now accounts for nearly 24% of its oil basket, up from just 2% previously. This shift has saved billions of dollars, cushioning India against global price volatility. Sitharaman’s stance aligns with Prime Minister Narendra Modi’s broader policy of prioritising national interest, a principle reiterated during his recent meetings with Russian President Vladimir Putin and Chinese President Xi Jinping at the SCO summit in Tianjin.
Economic And Diplomatic Implications
The ongoing spat has broader implications for India-US relations, already strained by trade disputes and differing views on global conflicts. The 50% tariff, among the highest globally, threatens to disrupt India’s export-driven sectors, prompting Sitharaman to announce a relief package to support affected industries. “We will not leave our exporters high and dry,” she assured, hinting at measures to offset the tariff’s impact.
Despite the tensions, India’s defiance reflects a calculated strategy to balance economic benefits with geopolitical realities. By continuing to procure Russian oil, India not only secures affordable energy but also maintains its strategic partnership with Moscow, a long-standing ally. As global oil markets remain volatile, Sitharaman’s bold declaration signals that India will chart its own course, undeterred by external pressures.