Russia and India say they have no intention of stopping oil purchases

A day after President Donald Trump said India had agreed to halt purchases of Russian crude oil as part of a new U.S.-India trade deal, the Kremlin said it had not heard anything from New Delhi to suggest such oil had stopped flowing.

“We have not yet heard any announcement from Delhi on this matter,” Russian government spokesman Dmitry Peskov said in comments reported by news agency RIA Novosti.

“We respect the bilateral relations between the United States and India,” Peskov told reporters. “However, we attach equal importance to the development of a high-level strategic partnership between Russia and India.”

“This is of utmost importance to us and we intend to further develop our bilateral relations with Delhi,” he said.

Russian Deputy Prime Minister Alexander Novak, a former oil minister, downplayed the possibility of losing India’s customs, telling reporters on Tuesday: “We are just looking at the official announcement. We will see how the situation develops.”

“But overall, our energy resources are in demand and situations like this are common. Supply always finds demand, because there is a balance,” he said in comments reported by TASS news agency.

President Trump announced in a post on Truth Social on Monday that he had reached a trade deal with India, and said the deal was reached in a phone conversation with Prime Minister Modi.

“We talked about a lot of things, including trade and ending the war with Russia and Ukraine,” Trump said, adding, “We agreed to stop buying Russian oil and buy more oil from the United States and possibly Venezuela.”

President Trump said the United States would lower major tariffs on India from 25% to 18% and eliminate the 25% tariff imposed on New Delhi last summer in retaliation for its purchases of Russian oil.

“I am pleased to see that tariffs on Indian-made products have been reduced to 18%,” PM Modi wrote on Monday, confirming the latest deal with the US.

While India does appear to have reduced its purchases of Russian crude as a result of Washington’s punitive 25% tariffs, analysts are skeptical that the country, which became the largest buyer of discounted Russian crude after the start of the 2022 war in Ukraine, is looking to end these purchases altogether, given its need for cheap oil, its desire for foreign policy autonomy, and its desire to maintain close geopolitical and defense ties with Russia.

“It is hard to believe that the Indian government would make any commitments related to Russian oil explicit,” Evan A. Feigenbaum, vice president for research at the Carnegie Endowment for International Peace, said in an analysis Tuesday.

“After all, India has deep historical and emotional ties to Russia and is not going to simply back down under U.S. pressure,” he said. “Maintaining a symbolic hedge of being able to buy Russian oil if it so chooses speaks to both India’s foreign policy autonomy and its ability to resist U.S. coercion, both of which are important elements of India’s domestic politics.”

Feigenbaum said that although there are signs that New Delhi is already phasing out Russian oil imports, publicly reprimanding Russia is not always a “first move” for Modi. “We cannot afford to embarrass one of India’s most important defense partners.”

Farwa Aamer, director of South Asia Initiatives at the Asia Society Policy Institute, agreed that New Delhi is reluctant to let go of trading partners with which it has deepened ties in recent years. Still, India will also be keen not to weaken its ties with the United States after months of trade tensions.

“For India, Russia remains an issue,” he said in emailed comments on Tuesday.

“India has and will continue to change its oil import structure from Russia, but it will still want to stabilize the relationship. This will certainly be a balancing act as India navigates these two important relationships at the same time,” he added.

Moody’s ratings agency said India is unlikely to completely exit Russian oil given the potential economic impact, including increased manufacturing costs and higher consumer prices.

“While India has reduced its oil purchases from Russia in recent months, it is unlikely to immediately halt all purchases that could hurt India’s economic growth,” Moody’s ratings agency said in a statement on Tuesday.

“Given that India is one of the world’s largest oil importers, a complete shift to non-Russian oil could lead to tighter supplies elsewhere, higher prices, and higher inflation.”