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Biman Mukherji

US President Donald Trump’s recent proposal to sell more oil and gas to India could significantly reduce New Delhi’s purchases of discounted Russian oil, thought to be funding Moscow’s war with Ukraine.
Analysts expect Delhi to welcome the move by Washington, which could induce Russia to sell its oil at market rates. India and China are among the top buyers of cheap Russian oil.
“Russian oil will remain important [for India] but the wartime surge will decline soon enough. The US will fill that gap,” said Uday Chandra, a political scientist at Georgetown University.
Trump has suggested he would meet Russian President Vladimir Putin this week, raising hopes that negotiations could end three years of fighting in Ukraine.
India, which imports 85 per cent of its oil needs, has increasingly relied on supplies of discounted Russian oil in recent years.
From less than 1 per cent before the Ukraine war, Russia later accounted for 40 per cent of India’s oil imports. But its share is estimated to have dropped to 25-30 per cent since the US imposed fresh sanctions on entities transporting Russian oil late last year.
According to a report by the Centre for Research and Clean Air, India’s imports of Russian crude oil dropped in November 2024 to its lowest level since June 2022.
Russia’s share of Indian oil imports could drop to 15-20 per cent in the near term, given Trump’s plan to sell more US oil to India to reduce a trade deficit between the two countries, Chandra said.
Trade between India and the US totalled US$118 billion in the 2024 financial year, with the South Asian country recording a surplus of US$32 billion.

During a meeting between Indian Prime Minister Narendra Modi and Trump in Washington last week, Modi called for the two countries to increase two-way trade to US$500 billion by 2030.
The US could significantly replace some Russian oil supplies in the near term and potentially emerge as the top supplier if its oil and gas exports to India were to increase to US$25 billion over time from around US$7 billion currently, Chandra said.
“It will catapult the US to the top exporter position and wipe off another US$10 billion from the trade deficit. Again, a win-win from an Indian perspective because the end of the Ukraine war is on the cards and cheap Russian oil was a temporary boon,” he said.
The US is among India’s top five suppliers for oil and gas, behind Russia and several Middle Eastern countries.
Other experts concurred that India would buy more US oil and gas as doing so could help Delhi fend off the threat of higher tariffs imposed by Washington on Indian exports to the world’s largest economy.
Oil-producing superpower
Gnanasekar Thiagarajan, founder of Commtrendz Research, noted that about a decade ago India had been buying significant quantities of US shale oil and gas because it was relatively cheap before market dynamics changed.
India is expected to buy more US oil again despite higher cost of logistics arising from greater distances for shipping compared with getting its supplies from the Middle East and Russia, according to Thiagarajan.

“If [Indian officials] only depend on one supplier, then it [Washington] could start dictating terms,” he added.
In the run-up to the US presidential elections last year, Trump’s “Drill Baby Drill” call fuelled expectations that America would ramp up extraction and supplies of shale oil.
The US has been the world’s largest oil producer on the strength of its shale oil reserves for about a decade, producing around 13 million barrels per day.
TS Vishwanath, principal adviser at international trade consultancy ASL-Legal in New Delhi, said any decision by Delhi to buy more US oil and gas would depend on the commercial viability and should not be seen as part of the goal to boost two-way trade between India and the US to US$500 billion.
India’s petroleum and natural gas ministry would have to explore whether higher purchases from the US were feasible, he said.


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President Donald Trump called on India to buy more US oil and gas during his meeting with Indian Prime Minister Narendra Modi last week


President Donald Trump called on India to buy more US oil and gas during his meeting with Indian Prime Minister Narendra Modi last week.
