US imposed a 25% tariff on Indian imports linked to Russian oil, effective August 2025, sparking debate over India’s energy security. Since early 2022, India’s Russian crude imports reached $16 billion, about 20% of Russia’s oil export earnings.
India’s growing purchases of Russian crude oil since the outbreak of the Ukraine war in 2022 have recently become a source of tension with the United States. In a significant move, the US has imposed a 25% tariff on Indian imports tied to Russian oil, set to take effect from August 27, 2025. The development has sparked debate over India’s energy security strategy and global trade dynamics.
India Spends Heavily on Russian Oil
According to the Centre for Research on Energy and Clean Air (CREA) in Finland, India’s imports of Russian crude have reached Rs 132 billion (around Rs 13.39 lakh crore) since early 2022, representing roughly 20% of Russia’s total oil export earnings during this period. Despite Western criticism, Russian oil remains widely accessible, enabling countries like India and China to purchase it at discounted rates.
US Accusations and India’s Response
The US Treasury has criticized India, with Secretary Scott Bessent claiming that India and certain wealthy individuals engaged in “unacceptable opportunistic arbitrage” through Russian oil trade, allegedly earning $16 billion in surplus profits. While the methodology behind this figure remains unclear, the US has moved ahead with tariffs.
India, however, has firmly rejected the penalty, calling it unjustified, and Indian refiners plan to continue sourcing Russian oil despite the impending sanctions.
Beyond Oil: Coal Purchases and Fossil Fuel Imports
India’s Russian imports are not limited to crude. The country has also bought Rs 16 billion worth of coal, bringing total fossil fuel purchases to Rs 148 billion since early 2022. In comparison, China’s imports reached Rs 193 billion, while the EU imported Rs 105 billion and Turkiye Rs 71 billion.
CREA’s analysis shows the top buyers of Russian fossil fuels overall are: China Rs 268 billion, EU Rs 213 billion, India Rs 148 billion, and Turkiye Rs 111 billion.
Commodity Trends and Global Context
Looking at specific commodities:
- China leads in Russian coal imports at Rs 39 billion.
- EU dominates Russian gas purchases at Rs 105 billion, followed by China (Rs 36 billion) and Turkiye (Rs 29 billion).
- India has not imported Russian gas during this period.
- Interestingly, despite criticizing India and China, the EU itself contributes around one-fourth of Russia’s fossil fuel earnings since February 2022.
Calls for Stronger Sanctions
CREA notes that its estimates are based on Russian export data and certain assumptions. The organization suggests that stricter enforcement of oil price caps and tighter sanctions are needed to curb Moscow’s income while the conflict continues.