The recent meeting between Prime Minister Narendra Modi and Russian President Vladimir Putin on the sidelines of the Shanghai Cooperation Organisation (SCO) summit came at a time of strain in India-US relations against the backdrop of recent US secondary tariffs imposed on India for continuing to import Russian oil. While Washington alleges that India was bolstering Russia's military capabilities, New Delhi rejected these allegations, stressing that its purchases were driven by its energy security needs. The secondary tariffs prompted a soft recalibration in India's policy calculus, further strengthening New Delhi's engagement with Moscow.
The India-Russia partnership is a cultivated one, rooted in shared interests in reshaping the international system and advocating reform of the Western-led order. Both countries work together across regional, multilateral, and plurilateral platforms such as the Shanghai Cooperation Organisation, G20, and BRICS.
This history of alignment has provided the foundation for a time-tested partnership, one that continues to find its relevance in the defence sphere. Moscow continues to remain a vital defence partner for New Delhi. Over 60% of India's military platforms are of Russian origin, and despite a decline in Russia's share of India's defence imports - from 62% in 2017 to 45% in 2022 - both sides have expressed interest in strengthening the military technical partnership. In the economic realm, the relations have grown exponentially. In 2024, bilateral trade surged to $68.7 billion, a 5.8-times increase since pre-pandemic trade of $10.1 billion. India did not join the sanctions regime against Russia. This resulted in India becoming the second-largest trading partner of Moscow. This growth in trade volumes has been driven primarily by the import of discounted Russian crude, while non-oil trade is gradually picking up.
Trade Lubricated By Oil
Before Russia's invasion of Ukraine, India's oil imports predominantly came from Middle Eastern countries. However, since 2022, Russia's markets in the West have shrunk, with the onset of sanctions and the imposition of the $60 price cap on the import of Russian oil. Russian exporters sold oil with discounts of up to $15-$20 per barrel, prompting Indian refiners to sign oil supply contracts. As sanctions were further tightened, both countries devised mechanisms to settle payments in national currencies and insure maritime cargo. These developments resulted in New Delhi importing $140 billion worth of Russian crude from 2022. The net savings due to the discounts amounted to $12.6 billion, boosting the domestic economy and stabilising global oil markets.
The import of discounted crude from Moscow is not a new development in bilateral relations. In the 1960s, the USSR sold oil to India at 10-20% discounts. For a price-sensitive market like India, such discounts directly shape purchase volumes. In July-August 2025, imports dipped to 165,000 tonnes per day due to Ukrainian attacks on Russian facilities and discounts narrowing to $1-2 per barrel. With secondary tariffs now in place, discounts have increased again, prompting refiners to scale up purchases. Reuters estimates India's crude imports from Russia will rise by 10-20% this month.
India imports close to 40% of Russian oil. Even if the discounts are marginal, it is unlikely that refiners would discontinue purchasing Russian crude, as offsetting volumes as high as 2 million barrels in a day would not be possible in the short term. Additionally, the Trump administration's rather obtuse justification for imposing tariffs on India while American businesses eye investments in Russian energy projects has prompted a strong pushback against the US.
While New Delhi has continued to maintain its outreach to Moscow despite pressure from the West in the aftermath of the Ukraine war, recent turbulence in India-US relations has only added impetus to further deepen ties with Russia, evident in calls to expedite defence deals and in ongoing negotiations under the IRIGC framework to advance cooperation in defence, trade, investment, the Arctic, and beyond. Many factors will continue to influence this bilateral partnership, in particular the US-Russia relations, the terms on which the war in Ukraine will likely conclude as well as the state Russia-China ties. Unlike Russia, which continues to define its foreign policy in consonance with China within an anti-West framework, India has no intention of taking that position and will continue to define it as "non-West", not anti-West. But there is no doubt that Trump's erratic behaviour and his dubbing of the Ukraine war as "Modi's war" will only ensure that New Delhi will continue with its substantive outreach to Moscow.
(Harsh V Pant is Vice President, ORF. Rajoli Siddharth Jayaprakash is Junior Fellow, Eurasia, at ORF.)
Disclaimer: These are the personal opinions of the author
