Russia assures continuity in oil trade with India despite Trump tariffs

NEW DELHI : Russia on Wednesday dismissed apprehensions that sanctions and tariffs imposed by the United States and the European Union could disrupt its crude oil exports to India. Senior Russian officials emphasised that Moscow has devised a “special mechanism” to navigate punitive measures rolled out by the Donald Trump administration aimed at curbing Russian energy trade. They underlined that India remains a key strategic partner for Russia in the energy sector, and assured that oil flows will continue uninterrupted despite external pressures.

Russia continues to position itself as India’s “partner of choice” in the defence sector, with chargé d’affaires Roman Babushkin noting that recent hostilities between India and Pakistan in May had effectively served as a “successful battlefield test” for Russian military hardware, including the S-400 air defence system. Speaking at a media briefing, Babushkin reiterated Moscow’s commitment to deepening strategic cooperation with New Delhi, highlighting defence and energy as the twin pillars of the partnership. He also confirmed that President Vladimir Putin is scheduled to visit India later this year for the annual bilateral summit, though the exact dates are still being worked out.

India has emerged as the second-largest buyer of Russian crude after China, with Moscow now meeting nearly 40% of New Delhi’s energy requirements. Indian refiners sharply increased purchases of discounted Russian oil following Western sanctions imposed on Moscow in the wake of its 2022 invasion of Ukraine. However, Washington is preparing to impose a 25% punitive tariff on Indian exports starting August 28 in response to these energy imports, a move that will come on top of a 25% reciprocal duty, potentially escalating trade frictions between the two countries.

Babushkin and deputy trade commissioner Evgeny Griva, however, were confident that Russia would be able to circumvent pressure from the US and its Western allies over energy trade with India.

“Despite the political situation, we can predict that the level of crude oil imports would be approximately the same,” Griva said. “Definitely, there are some mechanisms to supply crude oil. We can’t discuss it because it’s really a very special mechanism.”

Babushkin added: “This is not the first time our trade and economic relations [have been] threatened by external factors. But each and every time, we have managed to succeed in finding ways to cooperate further based on our mutual national interests. We are quite certain that our cooperation will continue.”

The officials said oil supplies to Vadinar refinery in Gujarat, jointly owned by Russian energy giant Rosneft and an investment consortium, hadn’t been impacted after it was targeted under a EU sanctions package in July. The Vadinar facility, in which Rosneft has a 49.13% stake, is India’s second largest single-site refinery with an annual capacity of 20 million metric tonnes (MMT).

Russia has a mechanism to tackle shipping and insurance-related issues due to EU sanctions and crude is supplied directly to the refinery as it is a subsidiary of Rosneft, Griva said. “The recent package of sanctions against Russia from the EU would not have much impact on Russian oil trade because we have been able to significantly reduce our dependence on services the EU provides in recent years,” Babushkin added.

The officials, however, acknowledged that a 5% swing is possible in oil import prices amid the Western tariffs and sanctions, though this will be subject to negotiation. They also said India and Russia were on track to achieve the target of driving bilateral trade to $100 billion by 2030, thanks to a stable growth of about 10% annually.

Bilateral trade touched a record high of $68.7 billion in 2024-25, though India’s exports were worth only $4.88 billion, and Babushkin said Russia is working to address the trade imbalance. “We need to reduce the trade imbalance, which is currently about $60 billion. We will remove barriers to trade, facilitate interaction within business circles and give a new push to alternative logistics corridors. And we will further develop our payments and transactions mechanisms,” Babushkin said.

Against the backdrop of strident criticism of India’s purchases of Russian weaponry and military hardware by US President Donald Trump and senior American officials, Babushkin said Russia remains the “partner of choice for India” in defence and pointed to the joint development of the BrahMos supersonic cruise missile since 1998.

“We have dramatically expanded the programme of our joint engagements for co-production of various sophisticated weapons,” he said. “A Russian weapon is a natural choice for the Indian Army general. Operation Sindoor was a very successful battle test for the Russian systems and S-400 was one of them.”

India used both the BrahMos missile and the S-400 air defence system during Operation Sindoor, launched on May 7 to target terrorist infrastructure in Pakistan in retaliation for the Pahalgam terror attack, and the subsequent four days of hostilities between the two countries. The Russian-origin Su-30 combat jet was also used during the hostilities to fire the BrahMos missile, and a Pakistan surveillance aircraft was shot down at a distance of about 300 km by the S-400.

Babushkin said Russia is expected to be part of India’s plans to create a new long-range air defence shield called Sudarshan Chakra, which was unveiled by Prime Minister Narendra Modi during his Independence Day speech. The system, integrated with offensive weapons, is expected to be operational by 2035 to guard cities and vital infrastructure.

Babushkin noted that the S-400 is already part of India’s air defence system and said: “We proceed from the understanding that when it comes to the advancement of these systems, Russian equipment will be part of it.”

The Russian officials were speaking hours after external affairs minister S Jaishankar arrived in Moscow on Tuesday for talks with his counterpart Sergey Lavrov and to co-chair a meeting of the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) with deputy prime minister Denis Manturov.

Babushkin said these engagements are part of preparations for Putin’s planned visit later in the year for a summit with Modi. Putin also dialled Modi twice in the past fortnight to brief him on developments in Ukraine and his summit with Trump in Alaska.

The two sides are working on a comprehensive agenda for the annual summit that will include trade, investments, energy cooperation, infrastructure and nuclear power, including small and modular reactors, he said.