India’s merchandise imports from Russia dropped sharply by 40.5 percent year-on-year in January 2026, largely driven by a slowdown in crude oil purchases, signalling a notable shift in the country’s energy sourcing amid evolving geopolitical and trade dynamics.

According to trade data, India imported goods worth $2.86 billion from Russia in January, down from $4.81 billion during the same month last year. The steep fall is primarily attributed to reduced buying of Russian crude, which has accounted for nearly four-fifths of India’s imports from Moscow in recent years.

Crude Oil Decline Drives Overall Trade Fall

For much of the past three years, India had ramped up imports of discounted Russian oil following Western sanctions on Moscow after its invasion of Ukraine. Russian crude became a cornerstone of India’s energy basket, with its share rising to more than one-third of total imports by 2024–25.

However, January’s figures suggest a clear moderation in procurement by Indian refiners. Petroleum crude’s dominance in bilateral trade means even a modest reduction in volumes has an outsized impact on overall import values.

Industry observers note that while some Russian cargoes continue to be booked, refiners are increasingly balancing price advantages against geopolitical considerations, logistics, payment mechanisms and long-term supply diversification strategies.

US Trade Framework Alters Energy Priorities

The decline comes alongside a new interim trade framework between India and the United States that is reshaping commercial priorities. Under the arrangement, Washington reduced tariffs on Indian exports to around 18 percent and removed a punitive 25 percent duty imposed earlier over India’s continued purchase of Russian oil.

In return, India is expected to expand imports of US energy, technology and other goods over the coming years, with both countries targeting bilateral trade of roughly $500 billion.

The tariff relief has eased pressure on Indian exporters but has also nudged energy procurement patterns, as closer economic alignment with Washington makes diversification away from Russian supplies strategically advantageous.

Geopolitics And Energy Security In Balance

India has consistently maintained that its oil buying decisions are guided by national interest and price competitiveness rather than political alignment. Discounted Russian crude helped contain domestic fuel costs and inflation during a period of volatile global energy markets.

Nevertheless, the January contraction indicates that India’s energy strategy is becoming more fluid, balancing affordability with diplomatic relations, sanctions risks and long-term supply resilience.

Energy analysts expect procurement patterns to remain dynamic in the coming months, influenced by global oil prices, shipping constraints, insurance costs and the trajectory of US-India economic cooperation.

While Russia is likely to remain an important supplier, the latest data underscores how quickly trade flows can shift when geopolitics, tariffs and energy security considerations intersect.

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