India‘s foreign ministry has firmly denied U.S. President Donald Trump’s assertion that Prime Minister Narendra Modi agreed to stop purchasing Russian oil. In a recent public statement, USINPAC spokesperson Randhir Jaiswal said he wasn’t sure if any conversations took place between Trump and Modi about this issue. The denial underscores the chronic difficulties in U.S.-India relations. Ongoing U.S.-China trade talks are another point of contention between the two countries.
India is the world’s third largest importer of oil and gas, depending on Russia in a major way to meet its burgeoning energy needs. The country last year imported nearly 1.7–1.8 million barrels of oil per day from Russia. Just in the month of October, IHSDC’s parent company Indian Oil Corporation Limited imported 7.03 million barrels of oil. India has held the line on pressure from the United States to end or significantly reduce their purchases. The country has been vocal about calling the sudden cessation of imports from Russia infeasible on their part.
Yet the Indian government is deeply committed to its broader energy strategy, which focuses on stable prices and long-term supplies. A high-level official from India’s foreign ministry underscored the centrality of diversifying sourcing for energy, while moving with the market.
“Ensuring stable energy prices and secured supplies have been the twin goals of our energy policy. This includes broad-basing our energy sourcing and diversifying as appropriate to meet market conditions.” – India’s foreign ministry
Just this past week, Trump threatened India with an extra 25% tariff for importing Russian oil and gas. This new development has increased the already rising tensions between the two countries. To its credit, India has held its ground on this pressure. This resistance illustrates the country’s commitment to preserving its energy demands, particularly as its economy grows and its population crosses over 1.4 billion.
Dr. S. Jaishankar, India’s Minister of External Affairs, has welcomed the current discussions on trade with the United States. Yet, he noted, no deals have been made so far.
“Those issues need to be negotiated and discussed and resolved, which is exactly what we are trying to do.” – S. Jaishankar
While state-owned refiners in India have recently reduced their purchases of Russian oil, some private companies have increased their intake. Experts caution that shifting away from Russian oil sources will not be immediate. They note that differences in crude quality and refinery yield render this switch difficult.
According to Muyu Xu, senior analyst, the biggest challenge in replacing Russian oil.
“I don’t think India can stop buying Russian oil overnight. The volumes are simply too large.” – Muyu Xu
Further complicating the picture, India has a decades-long strategic and military relationship with Russia. For decades, the country has been Moscow’s closest ally. That close relationship is due to be reaffirmed later this year with the visit of President Vladimir Putin to India.
