How India’s Russian oil imports reshape global trade, geopolitics? Opinion piece by FT

A recent opinion piece in Financial Times by the White House counsellor for trade and manufacturing examines the growing role of India in global oil markets, particularly its importation of discounted Russian crude, and the broader implications for US trade, NATO security, and the ongoing war in Ukraine. The analysis highlights the economic and geopolitical consequences of India’s energy strategy, including the flow of US trade dollars to Russia and the expansion of India’s refining sector.

Before Russia’s invasion of Ukraine in February 2022, Russian crude made up less than 1 per cent of India’s oil imports. Since then, India’s daily imports from Russia have surged to more than 1.5 million barrels, roughly 30 per cent of its total crude imports.

Accoridnt to the article, while domestic consumption has not significantly increased, Indian refiners have leveraged this discounted crude to expand exports of refined petroleum products to Europe, Africa, and Asia. Analysts argue that this trade indirectly benefits Russia by supplying the country with hard currency, which could be used to support its military operations.

The piece also draws attention to the US-India trade dynamic. India maintains high average tariffs and non-tariff barriers on American goods, contributing to a substantial US trade deficit nearing $50 billion annually.

According to the FT article, US trade dollars are, in part, being redirected to purchase Russian crude, raising concerns over the strategic implications of India’s trade and energy policies.

Defence procurement is another facet of India-Russia relations. Between 2020 and 2024, roughly 36% of India’s arms imports came from Russia. While India has diversified its suppliers to include the US, France, and Israel, these agreements often include technology transfer and local manufacturing requirements, which analysts suggest could complicate US strategic interests.

In response to these developments, the Trump administration is implementing a two-pronged tariff strategy aimed at restricting India’s access to US markets. This includes a 25% national security tariff in addition to a previously established 25% reciprocal tariff.

The FT piece argues that these measures are intended to curb financial support flowing to Russia via Indian oil imports, while signaling expectations for India’s alignment with US strategic priorities.

Overall, the analysis frames India’s role as both an economic opportunity and a geopolitical challenge.

While India benefits from discounted Russian crude and expanded refining exports, its trade and defence decisions have broader implications for US economic and security interests, as well as global efforts to isolate Russia amid its conflict with Ukraine.

By Sabina Mammadli