With the tariffs imposed by the Donald Trump administration set to rise to 50 per cent in 20 days, there is immense pressure on India to discontinue the purchase of Russian oil.
Since the Ukraine war broke out in 2022, India has been buying oil from Russia at a discounted rate, with prices capped at $60 per barrel. Russia soon became the top oil supplier, from a meagre 1.7 per cent in FY 20 to 19.1 per cent in FY23 and 35.1 per cent in FY25.
Will fuel price rise if Russian oil stops flowing into India?
The cost of importing Russian oil could spike by around $9 billion in FY26 and nearly $11.7 billion by FY27, according to the State Bank of India. A report by the public sector bank said Russia is supplying 10 per cent of the global crude oil and the price could go up by around 10 per cent if multiple countries halt oil imports from Russia.
However, India has previously stopped importing oil from Venezuela and Iran over US sanctions on those countries and diversified its options to other suppliers like Iraq, Saudi Arabia, the UAE and dozens of other countries, including Brazil, Canada and Guyana. India could buy more oil from these countries if it decides to stop procuring from Russia.
Despite potential rise in import expenses, India's diverse network of suppliers and current agreements with oil-producing countries could minimise disruptions, the SBI report said. But overall costs could rise if there is any drop in Russian oil exports that could send global crude prices soaring.
Trump imposed heavy tariffs on India, claiming that the country's oil purchases are fuelling the Russian war machine in the Ukraine conflict. However, India has slammed the tariffs as "unfair, unjustified and unreasonable", adding that it will take necessary steps to protect its national interests.
