India-US Tariff War / India becomes the 'King' of the oil game, America and Europe are out of breath!

India-US Tariff War: Two days later, America's additional 25 percent tariff is going to be imposed on India, with which the total US tariff on India will be 50 percent. This tariff has been imposed due to buying crude oil from Russia. The US and the European Union (EU) allege that India is buying cheap crude oil from Russia, refining it and selling it around the world, which is helping Russia financially to continue the war against Ukraine. The Trump administration has also accused India that India is fueling Putin's "war machine" by buying oil from Russia.

But in this article we will neither discuss the allegations of America nor the questions of Europe. Our focus will only be on how Russian oil has strengthened India's economy. In the era of Covid, when the global economy was in crisis and India's exports had decreased, Russian oil provided economic support to India. In this article, we will try to understand with the help of data how much and how Russian oil contributed to India's economy.

Increasing dominance of Russian oil in India

When India started buying crude oil from Russia, the share of Russian oil in the Indian oil basket was less than 2 percent. But today this share has increased to more than 40 percent. According to a report by Kpler, in August 2025, India imported an average of 2 million barrels of crude oil from Russia every day, which is much higher than 1.6 million barrels per day in July. This happened when the US announced an additional tariff of 25 percent on India.

India imports a total of 5.2 million barrels of crude oil per day, of which Russia's share was 38 percent in the first fortnight of August. During this period, imports from Iraq and Saudi Arabia decreased. Imports from Iraq were 907,000 barrels per day in July, which fell to 730,000 barrels per day in August. Supply from Saudi Arabia also declined from 700,000 barrels per day in July to 526,000 barrels per day in August. On the other hand, the US exported 264,000 barrels of oil per day to India and became India's fifth largest oil supplier.

Refining and export from cheap oil

India bought crude oil from Russia at cheap prices and refined it and exported it to other parts of the world including Europe, America. In the financial year 2024-25, India earned $60.07 billion (about Rs 5.25 lakh crore) from the export of refined petroleum products. However, this amount is less than in the financial year 2023-24, when India earned $84.2 billion (about Rs 7.37 lakh crore). The main reason for this reduction is the fall in the prices of global petroleum products. Nevertheless, Russian oil played an important role in strengthening India's economy.

Earnings from refined petroleum products

India earned billions of dollars by exporting various refined petroleum products. In FY 2024-25, India earned from the following petroleum products:

• High-speed diesel: $17.38 billion
• Motor spirit (petrol): $8.13 billion
• Aviation turbine fuel (ATF): $5.33 billion
• Fuel oil: $1.38 billion
• Naphtha: $196.29 million
• Liquefied petroleum gas (LPG): $37.51 million
• Kerosene: $2 million

It is clear from these figures that high-speed diesel contributes the most to India's petroleum exports, followed by petrol and jet fuel.

Economic importance of Russian oil

Russian oil provided crude oil to India at cheaper prices, reducing India's refining costs and increasing export earnings. During Covid, when India's exports were limited, Russian oil played an important role in handling the economy. This oil not only meets India's energy needs, but refining and exporting it also helps India increase its foreign exchange reserves.