The Economic Imperative of Russian Oil Imports for India.....

India's substantial import of discounted Russian crude oil since 2022 has been a crucial element of its strategy to navigate a turbulent global energy market, directly mitigating the impact of high international oil prices, a strong US dollar, and domestic inflationary pressures. This pragmatic approach, driven by the core national interest of energy security and affordability, has saved the nation billions of dollars and provided significant macroeconomic stability.

Economic Stabilization through Discounted Crude

As the world's third-largest oil importer, India is highly vulnerable to global price volatility. By ramping up imports of Russian oil (which at its peak constituted nearly 40% of all Indian crude imports, up from less than 2% pre-2022), India secured a reliable and cheaper energy source when global prices were volatile and peaked at around $139 per barrel.

Savings and Import Bill Reduction: Official data and analyses show India saved approximately $12.6 billion over a 39-month period by importing Russian oil at a discount compared to other sources. Other estimates place the total savings even higher, at around $17 billion. These savings directly lowered the national oil import bill, which was around $186 billion in 2024, providing a significant financial cushion.

Inflation Control: Cheaper crude imports helped in managing domestic inflation. The Indian government has largely kept domestic fuel prices stable, preventing the high global energy costs from trickling down to the consumer. India's retail inflation has been moderate, partly attributable to these lower energy costs.

Rupee Stability and Current Account Deficit (CAD) Management: A lower import bill reduced the demand for US dollars in the foreign exchange market, easing pressure on the Indian Rupee (INR) and preventing steeper depreciation against the strong US dollar. This contributed to a manageable CAD, which was contained at a healthy 0.6% of GDP in FY 2024-25, far below initial fears of 1.5% or higher.

Why Buckling to Pressure Is Not Advisable

The economic data suggests that the strategic decision to continue Russian oil imports is vital for India's economic resilience, and bowing to external pressure would carry significant risks.

Avoiding Price Spikes: Analysts widely agree that if India stopped buying Russian oil, that volume would likely be difficult to reroute globally, causing an artificial supply shortage and potentially driving international crude prices up significantly, possibly to $90-$100 per barrel. This would instantly negate India's economic gains and fuel global inflation.

Economic vs. Geopolitical Costs: While recent US tariffs on Indian goods in retaliation to the oil purchases could cost Indian exports significantly (analysts estimate up to $37 billion), the potential domestic economic stability offered by discounted oil is a strong counter-argument for continuing the policy based on national interest. The long-term costs of energy instability could be more detrimental than the trade disruptions.

Diversification and Strategic Autonomy: India maintains a foreign policy of strategic autonomy, choosing trade partners based on commercial viability and its energy needs, a stance supported across the political spectrum. The government has stated its priority is the affordability and sustainability of energy for its citizens, not succumbing to "neo-colonial lectures".

India's strategy of importing discounted Russian oil has been a masterstroke of economic diplomacy, effectively shielding its economy from global headwinds and ensuring stable domestic conditions. By securing billions in savings and playing a de facto role in stabilizing global energy markets, New Delhi has prioritized the welfare of its citizens. With recent data underscoring the benefits to India's inflation, currency stability, and current account balance, the economic rationale for continuing this policy is strong, and a shift in strategy due to external pressure would be economically detrimental. India is likely to continue its path of energy diversification and pragmatic sourcing, as long as Russian oil remains economically viable and not under direct formal sanctions.