In January, as Indian diplomats worked to secure a deal easing US tariffs on its exports, New Delhi significantly reduced its purchases of Russian crude oil, a move seen as a difficult concession to then-President Donald Trump. However, just two months later, India and Russia are advancing their energy partnership, agreeing to prepare for Russia to resume direct liquefied natural gas (LNG) sales to India for the first time since the Ukraine conflict began.
If India proceeds with this agreement, which carries the risk of breaching Western sanctions, negotiations could conclude within weeks. This development follows a March 19 meeting in Delhi between Russian Deputy Energy Minister Pavel Sorokin and Indian Petroleum and Gas Minister Hardeep Singh Puri, where a verbal agreement to negotiate an LNG deal was reached. Additionally, both sides agreed to further increase Russian crude oil sales to India, potentially doubling imports to at least 40% of India’s total crude purchases within about a month.
India has become a major buyer of discounted Russian crude since Moscow’s invasion of Ukraine, purchasing nearly $44 billion worth last year and playing a crucial role in sustaining Russia’s wartime economy. Indian authorities have also instructed energy importers to prepare for resuming Russian LNG purchases and have approached Washington seeking a possible sanctions waiver.
When questioned about the potential LNG deal, India’s foreign ministry spokesperson Randhir Jaiswal emphasized that the country’s energy policy is driven by the needs of its 1.4 billion population, market dynamics, and global conditions. Indian officials have also confirmed buying Russian liquefied petroleum gas, used mainly for cooking and not subject to sanctions. Meanwhile, Russian and US officials have not commented on the ongoing discussions or sanctions relief.
Former Indian ambassador to Moscow Ajai Malhotra highlighted that India’s decision aligns with its long-standing partnership with Russia and suggested that Delhi should seek exemptions or accommodations from Washington as part of strategic negotiations.
India has long been courted by the United States as a strategic counterbalance to China. Yet, in less than a year, it has faced significant challenges from US-initiated policies. After years of purchasing discounted Russian crude, India sharply cut imports following Trump’s imposition of tariffs of up to 50% on Indian goods in August. The US Supreme Court later ruled these tariffs unlawful.
India’s stance shifted dramatically after the US and Israel attacked Iran on February 28, leading to Tehran’s retaliation that disrupted oil and LNG shipments through the Strait of Hormuz—a critical passage for about half of India’s energy supplies. This disruption caused fuel shortages and long queues at gas stations across India. Consequently, demand for Russian energy, which bypasses the Gulf, surged in the region.
Indian state-owned refiners increased Russian crude purchases just before the US announced a temporary waiver on March 5, allowing India to buy some sanctioned cargoes. As oil prices rose, Washington further eased restrictions. Some Indian policymakers have expressed regret over the earlier reduction in Russian crude imports, viewing it as a concession to the US that weakened India’s energy security.
A government briefing note from March 20 warned that prolonged disruptions in Middle Eastern oil supplies could trigger economic difficulties, including higher inflation, a weaker currency, rising foreign debt, and a potential 2% to 4% decline in export growth. Wholesale inflation could increase by 0.3% to 0.7%.
Russia, maintaining friendly ties with India since the Cold War, is leveraging this opportunity. Any new LNG agreement is expected to be less favorable to India compared to the 2012 20-year supply deal with Gazprom, reflecting a seller’s market. Russian state power grid executives visiting Delhi proposed collaboration on transmission infrastructure, particularly in remote and mountainous regions, marking a potential first Russian entry into India’s power transmission sector.
Russia is also eager to expand air connectivity with India. Timofei Titarenko, an executive from St. Petersburg’s Pulkovo Airport, has been exploring possibilities for more direct flights between the two countries. Kremlin diplomat Sergei Lavrov noted that 96% of Indo-Russian trade is now conducted in rupees and roubles, emphasizing the partnership’s foundation on equality, trust, and mutual respect.
Transactions in rupees and roubles up to $1 billion can now be processed in about a day, more than twice as fast as a few years ago, a senior executive at the Indian branch of Russian lender Sberbank. This development underscores the deepening economic ties between the two nations amid ongoing geopolitical shifts.
