Russia oil, $500-billion target: Energy, security to shape Delhi’s response

Modi hasn’t responded to this assertion by Trump, and the sense in Delhi is the government will not fact-check or contradict the US President like it did when he took credit  for brokering a ceasefire between India and Pakistan in May 2025.

Secondly, it is a matter of record there’s a downward trend in Russian purchases due to sanctions and market constraints. Delhi has always maintained its oil import decision is guided by market realities. This has been its position ever since Russia invaded Ukraine in February 2022 and India began buying discounted Russian oil as a matter of economic pragmatism.

That did not go down well with the Europeans, and until recently, the east European and Baltic countries neighbouring Russia had misgivings about Delhi’s energy partnership with Moscow. Ukrainian Foreign Minister Dmytro Kuleba had criticised India for its continued purchase of Russian crude oil amid the war with Ukraine.

The US and western Europe had looked the other way because India had maintained the demand-supply equilibrium, and was buying the oil at price caps imposed by the West led by the US under Joe Biden. But that changed under Trump, especially for India.

It’s not that Moscow is not aware of the changed realities, and 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 the new realities and challenges that India faced from the Trump administration after it imposed a 25% tariff penalty over Russian oil purchase. India has kept the Russians in the loop.

Russia, on its part, is playing down Trump announcement about India agreeing to stop buying Russian oil. On Tuesday, Kremlin spokesman Dmitry Peskov said, “We haven’t heard any statement from New Delhi on this matter yet.”

India may not officially confirm stoppage of Russian oil, just as it had never said so publicly about zeroing out Iranian oil or Venezuelan oil under US pressure. The government, sources said, will be guided by its national interests which includes its energy security.

For this, it will possibly buy energy from other sources to compensate for supply gap. US and Venezuelan oil could be some of the sources — and Trump will view that as a win.

The other challenge of buying American products is purely based on tariffs, and the details are not yet public.

While the basket of commodities and their tariff rates will determine whether the Indian market can absorb American products, the USD 500 billion is the trade target set during Modi’s visit to the US in February 2025. The two leaders had launched “Mission 500”, aiming to more than double total two-way trade to $500 billion by 2030. This was almost a vision statement that the two sides agreed to, and won’t possibly be achieved with corn and other products that the US administration is talking about. It will likely consist of Delhi buying US defence equipment and aircraft, both civilian and military, depending on India’s national security needs and interests.