U.S. tariff ruling seen allowing India to keep buying Russian oil
U.S. President Donald Trump and Indian Prime Minister Narendra Modi arrive for a joint press conference in the East Room of the White House in Washington, DC, on February 13, 2025.
Jim Watson | Afp | Getty Images
Analysts said India will likely continue buying Russian oil as the US Supreme Court decision banning President Donald Trump’s import tariffs limits its trade policy options.
“I expect India to maintain a healthy relationship with Russia, including on energy,” Sarang Shidore, director of the Global South Program at the Quincy Institute for Responsible Government, told CNBC’s Inside India program. He added that India may reduce its oil purchases from Russia, but it is unlikely to stop completely.
India has imported 1.16 million barrels per day (mbd) of Russian oil so far in February, according to energy data provider Kpler; This is lower than the average daily intake of 1.71 million barrels in 2025.
Muyu Xu, senior crude oil research analyst at Kpler, said although it was too early to collect data for March and April, “market rumors” suggest that Indian refiners are refraining from booking April deliveries of Russian oil this month following the interim US-India trade deal reached earlier this month.
But following the US Supreme Court ruling on Friday that Trump lacked the legal authority to impose sweeping import tariffs under the International Emergency Economic Powers Act (IEEPA), Xu said India now has the space to continue importing between 800,000 and 1 million barrels of oil per day from Russia.
Trump’s ability to change tariffs for reasons such as his purchases of Russian oil or factors unrelated to trade or economics will be restricted by the court decision, according to Shidore.
India’s Ministry of Petroleum and Natural Gas did not respond to CNBC’s request for comment.
A thorny subject
India’s purchase of Russian oil was a thorny issue and Relations between the US and India have deteriorated over the past year.
In August, Trump imposed an additional 25 percent tariff on Indian goods to punish New Delhi for India’s purchase of Russian crude oil. [Russia’s] This meant that in addition to the 25% reciprocal tariffs the US imposed on Indian goods, India’s exports to the US faced total tariffs of 50%, the highest among all US trading partners.
Following the interim trade agreement, the US reduced the customs duty on Indian goods from 50% to 18%.
In a manager order On February 6, US president Donald Trump lifted the punitive 25% tariff on India, stating that New Delhi “commits to stop importing, directly or indirectly, Russian Federation oil” and will purchase “energy products from the United States.”
However, the joint statement published by India and the USA announcing the interim trade agreement did not include any statement that India had committed to restricting Russian oil purchases. However, the statement said that as part of the deal, New Delhi intends to purchase half a trillion dollars worth of US goods, including energy, over the next five years.
Alexandra Hermann, chief economist at Oxford Economics, said India’s commitments to reduce purchases of Russian oil “were never formally enacted and always seemed difficult to implement in practice.”
Hermann added that India’s energy strategy is fundamentally driven by price considerations and the motivation to not be tied to any one supplier. “It is unlikely that US crude will meaningfully replace Russian barrels,” Hermann said.
Hours after the U.S. Supreme Court ruled against the IEEPA tariffs last Friday, Trump invoked Section 122 of the Trade Act of 1974 to impose an initial 10% global import tax. He later increased this rate to 15 percent. However, in the US Customs and Border Protection statement published on Monday evening, when the tax came into force, it was stated that this rate was 10%.
India’s trade negotiators have rescheduled their visit to Washington to cement the interim trade deal. The visit “will be planned after both sides have had time to evaluate the latest developments and their implications,” a source told CNBC’s Amitoj Singh.
“India has continued to import Russian oil despite various tariff tactics,” said Pankaj Srivastava, senior vice president of commodity markets at Rystad Energy.
Analysts said the imposition of a general global tariff rate of 10% following the US court ruling against Trump’s tariffs dilutes any benefits Indian exporters to the US could get from the trade deal.
In light of the latest developments, Srivastava said the US will not push India too hard to reduce oil purchases from Russia and the US will not risk its “significant” energy exports to India.
According to Kpler, India regularly buys 200,000-300,000 barrels of US crude oil per day. Data from Kpler and Rystad Energy show that as of the end of January, Russia was India’s largest supplier of crude oil, with the United States in sixth place.
