Oil and beyond: With Russia, India has to balance old ties, new realities

Defence the cornerstone of ties

India’s relationship with the Soviet Union blossomed specially in the 1970s, when Moscow stood with India during the 1971 India-Pakistan war as a counterweight to the US.

The defence ties between the two countries boomed, and India became dependent on Soviet Union-manufactured defence equipment. These equipment comprised more than 80% of India’s weapons at that time. While both countries also cooperated on civilian nuclear energy, space and people-to-people contact, defence was the major pillar.

After the collapse of the Soviet Union in 1991, defence continued to be the backbone of the ties, and even as India started diversifying to other sources — Israel, US, France and some other European countries — Russia remained the mainstay, of defence equipment and more importantly of “spares” of the legacy equipment. In fact, this dependency was hovering around 60 to 70% till recently.

Ukraine war and the oil question

After Russia invaded Ukraine in February 2022, the US-led Western bloc imposed sanctions on Moscow. Russia found a willing buyer of its oil in India, selling at deep discounts.

The India-Russia energy trade was just 2% of India’s energy imports before February 2022 (the Russian invasion of Ukraine). That increased to more than 32% over the next few years. Bilateral trade between India and Russia reached a record high of $68.7 billion in FY 2024-25, with Russian oil imports comprising the bulk of this trade, amounting to $63.8 billion. India’s exports to Russia was a paltry $4.9 billion.

The US looked the other way, and the West European countries, which had initially protested, reconciled to the issue, as it was reasoned that New Delhi was serving two purposes: India was sticking to the price cap on Russian oil, while also keeping the global-supply chain of energy stable and preventing a price rise.

Delhi’s rationale was that its decision was guided by commercial interests, since it wanted to cushion the inflationary impact of crude price hikes, and so was buying from the countries offering the lowest rates. Also, India said that the government was not involved in the process of buying oil, and it was the companies that made the decisions.

This worked well till Trump assumed office last year. He singled out India for punitive 25% tariffs for buying Russian oil, sparing European buyers and even China.

India has been rolling back its Russian oil imports since September 2025, though it has maintained that its decisions are driven by commercial logic and its energy needs.

Russia’s response

Even as it cut back on oil purchases, India has sent out other signals to the world. PM Modi has had several phone conversations, and two very high-visibility meetings in Tianjin and Delhi, with Russian President Vladimir Putin. There is a sense that the leaders have had the opportunity to discuss these new realities and challenges that India faces from the Trump administration, especially since the 25% tariffs were imposed as a ‘Russian penalty’.

Delhi’s change in course is expected to be understood by Moscow, as India has kept the Russians in the loop about its compulsions of minimising the political and economic cost being imposed by the US under Trump.

The Kremlin, thus, has played down Trump’s statement. “We, along with all other international energy experts, are well aware that Russia is not the only supplier of oil and petroleum products to India. India has always purchased these products from other countries. Therefore, we see nothing new here,” Kremlin spokesman Dmitry Peskov said on Wednesday.

India may not officially confirm the stoppage of Russian oil, just as it has never publicly spoken about phasing out Iranian oil or Venezuelan oil since Trump 1.0, under US pressure. The government has maintained that it will be guided by its national interests, which includes its energy security.

Ministry of External Affairs spokesperson Randhir Jaiswal made this clear on Thursday: “Insofar as India’s energy sourcing is concerned, the government has stated publicly on several occasions that ensuring the energy security of 1.4 billion Indians is the supreme priority of the government. Diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics is at the core of our strategy to ensure this. All of India’s actions are taken and will be taken with this in mind.”

The China angle

Coming back to defence, although dependence on new Russian equipment has dropped to less than 40%, and there are challenges with the efficacy of the Russian equipment due to sanctions on high-tech transfers to Russia, India is careful about Russian sensitivities, especially due to its proximity to its strategic rival, China. With about 50,000 Indian troops still deployed on the India-China border for almost six years now, India would not want to risk its ties with Russia.

So, Delhi will have to diplomatically navigate this tricky territory about the declining oil imports and its continuing defence partnership with Moscow.