India’s decision to increase imports of Russian crude oil has delivered significant financial benefits over the past three years. According to trade data analysis, Indian refiners saved at least $12.6 billion in 39 months by purchasing Russian oil at discounted rates compared to supplies from other nations.
While the direct savings are substantial, experts believe the real economic gains are far higher, as India’s purchases helped keep global crude prices in check. Without this demand, international oil prices could have surged, significantly inflating India’s already heavy oil import bill.
How Russian Oil Changed India’s Energy Math
When Russia invaded Ukraine in early 2022, its share in India’s oil imports was negligible. As Western countries cut back on Russian crude, Moscow turned to alternative buyers, offering discounts. India quickly ramped up purchases, and Russia soon became India’s largest oil supplier, overtaking traditional West Asian exporters.
- 2022-23: India saved about $4.87 billion, with Russian oil costing $13 less per barrel on average than non-Russian crude.
- 2023-24: Savings rose to $5.41 billion, though discounts narrowed to around $9 per barrel.
- 2024-25: Discounts eroded further, averaging just 2.8%, resulting in $1.45 billion in savings.
In the first quarter of 2025-26, discounts widened again to 6.2%, saving India nearly $0.84 billion.
The Bigger Picture: Presumptive Savings
Beyond these figures, analysts stress that India’s imports played a crucial role in preventing a global oil price surge. Had average oil prices been just $10 higher per barrel between April 2022 and June 2025, India’s import bill could have risen by $58 billion. At $20 higher, the additional burden would have touched $116 billion.
Brokerage firm CLSA estimates that if India stopped importing Russian oil, global prices could jump from $65 to $90–100 per barrel, driving inflation worldwide. Nomura economists suggest India’s annual import bill rises by $1.8 billion for every $1 increase in crude prices.
Political Tensions with Washington
India’s energy choices have sparked friction with the Trump administration, which recently announced an additional 25% tariff on Indian goods, citing Russian oil imports as the reason. With US imports from India valued at nearly $87 billion in 2024-25, the tariff impact could be significant.
New Delhi, however, remains firm. Officials maintain that India will continue to buy oil from any country offering the best deal, as long as the trade does not violate sanctions. Indian refiners have also confirmed they have received no directives to curb Russian oil imports.
Strategic Autonomy at the Core
India views its oil strategy not just through an economic lens, but also as a matter of strategic autonomy. Russia has long been a key partner, and India has resisted external pressure on whom it should engage with in energy trade.
For a country with 88% import dependence on oil, securing affordable energy remains critical for managing inflation, the rupee’s stability, and overall economic resilience. By leveraging discounted Russian crude, India has not only saved billions directly but also shielded itself from the worst of global price volatility.
