The Trump administration has sharply criticised India for buying Russian oil, accusing it of indirectly funding the war in Ukraine. President Donald Trump has warned of possible secondary sanctions on countries like India and China, with a decision expected by Friday. These sanctions, if imposed, could raise India’s annual oil import bill by $9–11 billion.
Russian oil currently makes up 35% of India’s crude basket. But experts believe the impact on India’s oil bill may be less than feared. Prashant Vasisht, Senior Vice President at ICRA, said replacing Russian oil with market-priced crude could raise the bill by under 2% since current discounts are limited to $2.5–$3 per barrel.
Gaurav Moda, Partner and Energy Lead at EY-Parthenon India, pointed out that India’s oil imports are now well diversified across the US, South America, and the Middle East. He added that crude prices are relatively stable and India has been preparing for such situations by building domestic inventories and strategic reserves.
If sanctions are imposed, Vasisht believes India could reduce Russian oil imports and increase reliance on the Middle East, the US, and African nations like Nigeria and Algeria. Moda added that this could become an opportunity for sellers to offer competitive deals to retain India as a buyer.
Experts also highlighted that India’s energy ties with the US are already strengthening. US oil imports to India have already jumped 114% in Q1 FY26, and the annual growth is expected to exceed 150%.
Vasisht said India could finish FY26 with significant US energy purchases, possibly around $25 billion, as stated by Foreign Secretary Vikram Misri earlier this year. He also mentioned that several Indian firms are exploring long-term LNG deals with the US, drawn by its pricing advantage.
On long-term contracts with Russia, Moda said it’s hard to predict the outcome without knowing the terms. These deals may have flexibility, but India will need to strike a balance if sanctions go ahead.
Moda also pointed to a broader opportunity for US-India energy cooperation beyond oil. This includes exploration and production in Indian offshore regions, LNG supply, renewable energy, and even collaboration on data infrastructure to support growing digital needs.
For the entire discussion, watch the accompanying video
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