Context: A proposed 25% tariff on Indian goods trade by the US—reportedly with scope for an additional 25%—would be a costly, counter-productive policy for businesses and consumers on both sides. India’s most pragmatic response is deft diplomacy and negotiation that safeguards national pride while minimizing trade disruption.
India’s oil strategy since 2022
To ensure energy security after the Ukraine war, India turned to discounted Russian crude (price-cap near $60 per barrel). Russia’s share in India’s crude basket shot up from 1.7% in FY20 to 35.1% in FY25, making it the single largest supplier by share as well as volume.
Country-wise Oil Imports (in MMT)
| Country | FY22 | FY23 | FY24 | FY25 | FY26 P | FY27 P |
|---|---|---|---|---|---|---|
| Russia | 4 | 51 | 83 | 88 | 40 | 0 |
| Iraq | 56 | 51 | 50 | 49 | 60 | 65 |
| Saudi Arab | 39 | 39 | 33 | 33 | 40 | 45 |
| UAE | 22 | 22 | 14 | 22 | 25 | 30 |
| US | 20 | 15 | 8 | 11 | 20 | 30 |
| Kuwait | 14 | 12 | 7 | 7 | 15 | 20 |
| Nigeria | 15 | 8 | 5 | 5 | 15 | 20 |
| Mexico | 7 | 4 | 3 | 3 | 5 | 15 |
| Others | 42 | 35 | 29 | 28 | 40 | 55 |
| Total | 220 | 237 | 231 | 245 | 260 | 280 |
India’s oil import mix: top suppliers by share
| Sl. No | Country | FY20 (%) | Country | FY23 (%) | Country | FY25 (%) |
|---|---|---|---|---|---|---|
| 1 | Iraq | 22.2 | Iraq | 20.7 | Russia | 35.1 |
| 2 | Saudi Arab | 19.8 | Russia | 19.1 | Iraq | 19.1 |
| 3 | U Arab Emts | 10.6 | Saudi Arab | 17.9 | Saudi Arab | 14.0 |
| 4 | Nigeria | 8.7 | U Arab Emts | 10.4 | U Arab Emts | 9.7 |
| 5 | Venezuela | 5.9 | U S A | 6.3 | U S A | 4.6 |
| 6 | U S A | 4.8 | Kuwait | 4.9 | Kuwait | 2.8 |
| 7 | Kuwait | 4.7 | Nigeria | 3.7 | Angola | 2.5 |
| 8 | Mexico | 3.2 | Angola | 2.0 | Nigeria | 2.2 |
| 9 | Angola | 2.6 | Mexico | 1.8 | Colombia | 1.3 |
| 10 | Russia | 1.7 | Oman | 1.6 | Mexico | 1.1 |
| 11 | Malaysia | 1.6 | Brazil | 1.2 | Venezuela | 1.0 |
| 12 | Algeria | 1.6 | Qatar | 1.2 | Brazil | 0.9 |
| 13 | Qatar | 1.3 | Turkey | 1.1 | Oman | 0.8 |
| 14 | Egypt ARP | 1.1 | Colombia | 1.0 | Qatar | 0.7 |
| 15 | Brazil | 1.1 | Malaysia | 0.8 | Korea RP | 0.7 |
| Top 5 Share | 67.2 | 74.4 | 82.6 | |||
| Top 10 Share | 84.2 | 88.5 | 92.4 | |||
| Top 15 Share | 90.9 | 93.6 | 96.6 |
If not Russia, where can India pivot?
- Re-tilt to Iraq, Saudi Arabia, UAE under existing annual supply contracts with monthly flexibility.
- Increase spot and term purchases from the US, Middle East, West Africa, Azerbaijan.
- Leverage new flows from Guyana, Brazil, Canada while keeping a diversified pool (~40 countries).
What happens to the fuel bill if Russian barrels stop?
SBI Research estimates that a full stop to Russian crude for the remainder of FY26 would lift India’s fuel import bill by only $9 billion in FY26 and $11.7 billion in FY27. If every country simultaneously halted intake of Russian crude (≈10% of global supply) and no other producer raised output, benchmark prices could spike by roughly 10%.
The policy takeaway
Blanket tariffs risk higher inflation for US consumers and unnecessary friction with a key partner. For India, maintaining a wide supplier base and pushing for negotiated solutions—while keeping strategic autonomy intact—remains the most cost-effective path.
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