India's Russian Oil Strategy: A New Chapter in Energy Diplomacy

How Strategic Autonomy and Economic Rationality Are Redefining India's Global Role

- Madhusudhanan S

In a world grappling with energy crises and geopolitical turbulence, India's oil strategy stands out as a model of strategic independence. As of FY2025, Russia accounts for nearly 35% of India's crude oil imports, a dramatic surge from just 2% in FY2020.

This shift is more than economic—it marks a geopolitical realignment reflecting India’s evolving role in a multipolar world. By deepening energy ties with Russia despite pressure from the United States and its allies, India has made a bold statement of sovereignty and strategic autonomy.

This article explores the long-term implications of this policy across four dimensions: economic rationale, strategic autonomy, diplomatic balancing, and deepening ties with Russia.

The Economic Rationale

India imports around 88% of its crude oil, making it the third-largest oil consumer globally. With domestic output stagnating and demand rising, affordable energy sources are essential.

Russian crude, priced $3-$4 lower per barrel than global benchmarks, has helped India narrow its current account deficit (CAD), control inflation, and boost refinery margins.

Macroeconomic Impact

1. Inflation Control

India's headline inflation eased from 6.2% in 2023 to 4.5% in 2025, largely due to lower fuel prices that reduced costs in logistics, food, and transport.