Why India buys crude oil from Russia and how much it imports

India is in second place for importing Russian crude oil, after China.

Oil has the potential to boost GDP and improve national development but a quick change in global oil prices can tumble the economy. Countries like the US and Russia are among the largest oil producers in the world. Fluctuations in oil price can affect the domestic fuel costs, including petrol, diesel, and liquefied petroleum gas (LPG), as well as the economy of any country that is highly dependent on oil. High oil prices can raise a country’s import bill and impact the trade deficit and foreign exchange reserves.

India, one of the largest and most populous countries, imports nearly 80% of its crude oil requirements. India imported nearly 242 million tonnes (MT) of crude oil in FY2025 between April 2024 and March 2025, which is a 4.2% increase from the previous year. After Russia’s 2022 invasion of Ukraine, many countries, including the United States, imposed sanctions on Russia, which made Russia give oil at a discount. Russia and India share a close strategic relationship and Russia offers India crude oil at cheaper prices than most other countries. Today, India is also the second-largest buyer of Russian crude and increased its imports. In October 2025, India’s spending on Russian crude oil was about $2.9 billion.

No country can survive long-term on higher fuel import costs; any change in the price of oil increases transportation, logistics, and production costs across industries, which then makes everyday goods more expensive, contributing to overall inflation in the economy. However, India’s CPI inflation rate is recorded at 0.25%, the lowest in October 2025, which is a positive sign of economic growth.

The challenge for the Government of India is to grow the economy while keeping oil imports affordable at the same time as it provides fuel subsidies through various schemes on fuels such as LPG and kerosene so that especially low-income families can buy these fuels at a lower, more affordable price. When global oil prices go up, the subsidy burden increases, which can increase the fiscal deficit and put pressure on government spending.

Indian currency is also not strong in front of the US dollar, but a trade deal between India and the US may strengthen it. Sustained increases in global oil prices can put more pressure on the Indian rupee and influence monetary policy decisions by the Reserve Bank of India. Inflation would rise if it stops importing discounted crude oil from Russia which affect both consumers and businesses across the country.