India's pivotal shift in consolidating a Russia-India-China (RIC) axis, though tactically alluring, risks rendering it more vulnerable and increasingly isolated as a purported leader of the democratic Global South. The Shanghai Cooperation Organisation (SCO) summit in Tianjin, where Prime Minister Narendra Modi walked hand-in-hand with Xi Jinping and Vladimir Putin, crystallised a new phase of India's strategic signalling at a time when our economy is more interlinked with China and Russia than ever before despite having areas of disagreeable distance. For Beijing and Moscow, the optics at SCO were a symbolic coup: Xi spoke of the "dragon and elephant dancing together", while Putin and Modi announced expanded trade in energy and agriculture.
For Washington, however, the trilateral choreography was interpreted as a defection. President Donald Trump bluntly declared on social media that the United States had "lost India and Russia to deepest, darkest China". His frustration was compounded by India's continued imports of discounted Russian oil and its profitable resale of refined products into Europe, an arbitrage that prompted Washington to impose punitive secondary tariffs of 50% specifically on Indian goods.
On the surface, India's alignment with the RIC bloc offers clear, calculable rewards. Russian hydrocarbons, procured at deep discounts, sustain India's refiners and provide immediate fiscal breathing room; Chinese upstream inputs from lithium-ion cells to APIs are indispensable for manufacturing and green transition projects; and the trilateral framework flatters New Delhi with the image of belonging to a powerful multipolar club. For a country squeezed by US tariffs, Western protectionism, and secondary sanctions, the immediate temptation to hedge through the RIC axis is undeniable.
The Russian Hydrocarbon Windfall
India's tilt towards Russian hydrocarbons has been extraordinary both in scale and speed. In fiscal year 2024-25, bilateral trade surged to a record $68.7 billion, dominated almost entirely by Indian imports, with $63.84 billion accounted for by mineral fuels and crude oil. Indian refiners, state-owned and private alike, seized on the arbitrage opportunities created by discounted Urals crude.
By maximising plant utilisation and exporting refined products such as diesel and gasoline, they captured significant margins while reducing landed energy costs for the domestic economy. Tanker-tracking intelligence confirmed that by mid-2025, India was importing an average of 1.6 million barrels of Russian crude per day, with major facilities such as Jamnagar institutionalising this new energy axis. Conservative estimates suggest cumulative fiscal savings in the billions since early 2022.
Precarious Gains
But these gains are precarious. They sit uneasily alongside the retaliatory instruments of US trade policy. Recent tariff pronouncements from Washington directly endanger nearly 55% of India's merchandise exports to the United States, a market worth over $87 billion annually. The potential for order cancellations, diminished investment flows, and reputational risks could quickly overwhelm the fiscal relief derived from Russian oil. In pure cost-benefit terms, the calculus is stark: the marginal billions saved on crude are dwarfed by the tens of billions at risk through reduced access to the world's largest consumer market.
What appears to be short-term fiscal breathing room thus masks a long-term strategic liability. The fungibility of crude oil in global markets is not mirrored by the stickiness of export relationships, which anchor entire industries in textiles, pharmaceuticals, and engineering goods. The inescapable lesson from this dynamic is clear. Energy security procured through Russian imports buys immediate fiscal breathing room and a degree of policy autonomy. But, by embedding itself too deeply in sanctioned energy flows, India exposes its economy to the volatility of great-power contestation and risks exchanging stable, rules-based trade with advanced economies for fragile tactical bargains.
Sino-Indian Asymmetry
If Russian oil constitutes an acute conundrum, India's trade relationship with China represents a chronic and slow-burning structural vulnerability. In 2024-25, India imported $113.5 billion worth of goods from China while exporting only $14.3 billion, producing a trade deficit of nearly $99.2 billion. This imbalance is not merely a question of numbers; it encodes profound asymmetries of leverage.
Chinese imports are overwhelmingly concentrated in inelastic, upstream inputs essential for India's industrial production base and green transition. More than half of India's needs for solar cells, lithium-ion batteries, Active Pharmaceutical Ingredients (APIs), and Key Starting Materials (KSMs) are sourced from Chinese suppliers. These are not commodities easily substitutable in the short run. Any disruption, whether geopolitical, tariff-induced, or deliberate, would cascade across the Indian economy, spiking costs, halting production, and jeopardising national priorities from energy transition to "Make in India".
At the same time, India's exports to China remain limited to price-elastic raw materials and low-value-added goods, such as iron ore and basic chemicals. This asymmetry grants Beijing coercive leverage while leaving India with minimal retaliatory capacity. The imbalance is further underscored by the ballooning semiconductor import bill - ₹1.71 lakh crore in FY 2023-24, reflecting dependence on Chinese wafers and integrated circuits, even as domestic assembly advances. In effect, India's manufacturing and green ambitions are constrained at the upstream level by a dependency that China can weaponise with little cost to itself.
This is not interdependence but strategic vulnerability. The more India integrates with China's industrial ecosystem, the more exposed it gets to the structural asymmetry at its core. Unlike Russian oil, which can be diversified with some difficulty, Chinese inputs represent chokepoints that cut directly into the foundations of India's future economy.
The Strategic Mirage of the RIC Bloc
Given India's distinct economic and structural vulnerabilities, deepening integration within the Russia-India-China (RIC) framework offers little strategic mitigation. An objective assessment of empirical evidence underscores that such a move would be inherently flawed. Russia's economy, with a GDP smaller than Italy's, lacks the scale and domestic demand to absorb Indian exports at levels sufficient to offset potential losses from Western markets. China, while being a far larger economy, already enjoys a substantial trade surplus with India and pursues policies aimed at technological self-sufficiency rather than absorbing low-value Indian exports. Its control over critical upstream chokepoints means any deeper economic integration would likely entrench, rather than reduce, existing asymmetries.
The political costs further compound these economic risks. Expanding ties with a sanctioned Russia invites third-party reprisals, including coordinated tariff retaliation from Western nations, while deeper dependence on China, a country with which India shares a contested and militarised border, heightens exposure to upstream supply shocks in semiconductors, chemical intermediates, and other critical inputs.
The RIC framework, therefore, does not create a resilient or integrated economic space. Instead, it magnifies systemic risk while providing only narrow, point-specific benefits, such as discounted energy and legacy defence equipment. It exemplifies the perils of substituting diversified, rules-based market access with concentrated, politically volatile dependencies, mistaking tactical, short-term gains for durable strategic resilience.
The data are stark. Annual energy savings, in the low single-digit billions, are far outweighed by tens of billions at risk in lost exports. Structural reliance on Chinese inputs leaves India with minimal leverage in sectors vital for industrial modernisation and technological advancement. What may be seen as a shrewd hedging strategy risks becoming a high-stakes economic cul-de-sac, exposing India to the unintended consequences of concentrated dependencies amid a volatile geoeconomic landscape.
Hedging or Entrapment?
India's reliance on Russia and China has delivered short-term dividends in forms of cheap Russian oil, legacy defense equipment, and indispensable Chinese inputs. Yet these gains conceal mounting vulnerabilities: inelastic dependence on Chinese intermediates, growing exposure to punitive U.S. tariffs and widening asymmetries in bargaining power.
Addressing these structural risks requires a portfolio approach diversifying markets, suppliers, and strategic alignments. India's sustainable comparative advantages lie not at the bottom of the value chain but in high-value services, sophisticated engineering goods, pharmaceuticals, vaccines, and, increasingly, assembly-heavy electronics. Services exports alone reached $387.5 billion in FY 2024-25, dominated by IT and software, a geoeconomic strength unmatched by most peers.
The outlook is clear: India cannot rely solely on tactical arbitrage through the RIC axis. Polycentricity is the way forward.
A multi-pronged approach can be developed on three fronts. Domestically, expanding PLI schemes, strategic stockpiling, and targeted R&D investment can reduce upstream dependence and enable self-reliant production of critical inputs. Internationally, accession to CPTPP, selective RCEP engagement, and EU/UK CEPAs can diversify market access while insulating India from concentrated dependencies. Finally, multilateral frameworks like IPEF and the Quad offer mechanisms for coordinated supply-chain resilience, technology standard-setting, and trusted investment corridors.
Looking forward, India's strategic trajectory should shift from reactive hedging to proactive structural autonomy. By combining market diversification, supplier plurality, and technological sovereignty, India can convert short-term gains from the RIC engagement into durable economic and geostrategic resilience. Failure to do so risks entrenching dependencies that could compromise the broader geopolitical leverage of the country.
(Ankur Singh and Aditi Lazarus are Research Analysts with Centre for New Economics Studies, O.P. Jindal Global University)
Disclaimer: These are the personal opinions of the author
