India’s crude import bill declined by 18% to $40.4 billion in the first four months of FY26, compared with $49 billion in the year-ago period, according to data from the government’s petroleum planning and analysis cell.
The country imported 81.2 million tonne of crude oil during April to July, marginal down from 81.7 million tonne in the same period of previous fiscal. India’s reliance on crude oil imports increased to 88.8% during the period, up from 88.1% in April-July of 2024, amid rising demand.
In July, the country imported 18.6 million tonne of crude oil, against 19.4 million tonne in the year-ago period. The import bill for last month stood at $9.5 billion, down from $11.5 billion in the same period last year.
Russian discounts cushion costs
The decline in the import bill can be attributed to discounted Russian barrels. However, with the US tariff of 50% looming, India might need to rethink its crude supply strategy.
US President Donald Trump has announced an additional penalty of 25% on India above the 25% tariff already existing for buying Russian oil – a move that could severely disrupt Indian supplies while also resulting in a potential increase in the import bill as the country will lose its access to discounted barrels.
Experts say it is unlikely that Indian refiners will voluntarily halt Russian crude imports in the absence of a clear government directive. Russian barrels— particularly Urals — offer a combination of technical compatibility, favourable yield profiles and strong refining margins that make them an attractive feedstock within the current refining slate.
Cost advantage at risk
Russian crude continues to trade at a meaningful discount to Middle Eastern OSP-linked grades, helping refiners maintain margin resilience, as per analysts. This cost advantage has been central to India’s refining and fuel export competitiveness over the past two years.
According to data from Kpler, the average landed cost of crude from non-Russian sources during April–May 2025 was approximately $5 per barrel higher than Russian-origin barrels. Although steep discounts seen in early 2022 have narrowed over time, Russian crude still ranks among the most economically attractive grades in India’s import portfolio.
Kpler noted that even a modest $5-6/bbl spread and expectation of further increase in flat prices and premium on 1.7–2.0 million b/d equates to billions (many) in annual savings—a critical buffer that has helped the Indian government manage inflation, rein in the fiscal cost of fuel subsidies, and maintain refinery profitability amid global uncertainty.