• India's imports of Russian crude oil dropped sharply to 1.1 million barrels per day in January 2026—the lowest since November 2022—with its share in total crude imports falling to the lowest since October 2022.
  • This decline, marking a second consecutive monthly drop, drove a 40.5% year-on-year decrease in overall merchandise imports from Russia to $2.86 billion, amid US pressure and a new trade framework.
  • Indian refiners, including Reliance Industries Ltd (RELIANCE.NS), drastically cut purchases, with total fossil fuel imports from Russia falling 19% month-on-month, as India shifts to cheaper alternatives like Iraqi, US, and potentially Venezuelan crude.

India's reliance on discounted Russian crude has hit a significant snag, with imports plummeting to levels not seen in over three years. According to data from sources, the country imported around 1.1 million barrels per day (bpd) of Russian oil in January 2026, the lowest since November 2022, while its share in total crude imports fell to the lowest since October 2022. This sharp drop, which follows a peak earlier, has driven a 40.5% year-on-year decline in overall merchandise imports from Russia to $2.86 billion, signaling a major shift in energy procurement strategies.

Indian refiners are at the forefront of this pivot. Reliance Industries Ltd (RIL), India's largest private refiner with a market cap of around $250 billion as of late 2025, stated that no deliveries of Russian crude were expected in January, a stark contrast to previous months when crude typically comprised 80% of imports from Russia. Efforts to restructure its sourcing have accelerated, with total fossil fuel imports from Russia falling 19% month-on-month, placing India third globally after China and Turkey but with volumes on a downward trajectory. Without a deal to maintain access to discounted barrels, refiners face higher costs, potentially impacting refining margins that had shown strength but dipped in Q3 FY26 due to lower Russian discounts.

Behind this decline lies intense geopolitical maneuvering. The US imposed 25-50% tariffs on Indian exports in 2025, linking penalties to Russian oil buys via an executive order, but a February 6, 2026, interim US-India trade framework withdrew the 25% tariff after India's commitment to curb direct and indirect Russian imports. This framework targets $500 billion in bilateral trade and aims to boost US energy and tech exports, according to people familiar with the matter. "This move supports India's energy security but raises refining costs short-term," one analyst noted, highlighting the trade-offs involved. The shift aligns with global oil market dynamics, where discounted Russian crude had boosted India's imports from zero in 2011-12 to $50.28 billion in 2024-25, peaking Russia's share at 35.8-36% before recent pressures.

Looking ahead, the outlook suggests sustained changes. India is replacing Russian volumes with cheaper Iraqi, US, and potentially Venezuelan crude, amid lower overall crude import volumes down 14%. Experts predict sharper Russian import falls in the short term as refiners adapt, with long-term decisions driven by price competitiveness and national interest. If tariffs remain lifted under the US deal, India's reliance on Russian oil could stay low, though the country continues to eye cheaper global options. This development not only reduces sanction evasion risks for Indian stakeholders but also strengthens US-India ties, albeit with potential ripple effects on domestic fuel prices if alternatives prove costlier. As one source put it, "It's a balancing act between economic pragmatism and geopolitical alignment."