India Recalibrates Its Energy Strategy: A Gradual Shift from Russian Oil to American Markets

India’s oil trade with Russia is passing through a pivotal and delicate phase. Recent high-level discussions in Washington have signaled a notable shift in India’s broader trade and energy approach, particularly in its evolving relationship with the United States. What was once seen as a strong and expanding reliance on discounted Russian crude is now steadily transforming into a more diversified and strategically balanced energy portfolio.

A Subtle but Clear Turn in Energy Policy

Speaking after recent diplomatic engagements, U.S. Trade Representative Jamieson Greer indicated that India has already begun reducing its dependence on Russian energy supplies. According to Greer, the adjustment is not abrupt but deliberate—India has gradually scaled back its purchases of Russian oil while increasing energy imports from the United States and other global suppliers.

His remarks followed the announcement that India and the U.S. had reached a framework for an interim trade agreement. The proposed arrangement aims to strengthen bilateral trade by lowering import duties on a range of goods, creating fresh momentum in economic cooperation between the two democracies.

When asked directly whether India was moving away from Russian oil, Greer responded affirmatively, noting that the shift is already underway. The message from Washington was clear: New Delhi is diversifying its energy sources, and the United States is positioning itself as a key partner in that transition.

What This Shift Means Strategically

1. Reducing Global Supply Chain Risks

For the United States, India is increasingly seen as a trusted trading partner and a crucial pillar in the strategy of “friend-shoring”—a concept that encourages relocating supply chains away from geopolitical rivals such as China and toward allied nations. By strengthening trade ties with India, Washington aims to build more resilient and politically aligned supply networks.

India, in turn, benefits from being viewed as a reliable alternative manufacturing and trade hub in an era of global supply chain realignment.

2. Energy Diplomacy in Action

India’s decision to increase energy imports from the United States carries implications beyond simple market transactions. It reflects a broader diplomatic calculation—one that prioritizes long-term energy security, stable dollar-denominated trade, and stronger economic integration with Western markets.

While Russia remains an important supplier, India appears to be signaling that it will not place excessive reliance on any single energy source. The diversification strategy strengthens India’s bargaining position globally and enhances its geopolitical flexibility.

3. Economic Gains Through Trade Liberalization

The interim trade framework between India and the U.S. is expected to lower tariffs across several sectors. Indian businesses operating in electronics, agriculture, and machinery could directly benefit from improved market access and reduced import costs.

If implemented effectively, the agreement could deepen bilateral trade volumes and stimulate investment flows, reinforcing the broader economic partnership between the two nations.

The Numbers Tell the Story

Recent import data underscores the ongoing transition:

• As of January 2026, India’s imports of Russian crude oil declined to approximately 1.215 million barrels per day (bpd).
• This marks a decrease from December 2025 levels of around 1.25 million bpd, and a sharper drop compared to figures recorded the previous year.
• Russia’s share in India’s total oil imports, which had once climbed to an estimated 35–40%, has now fallen below 25%.

While Russia remains a significant supplier, its dominance in India’s oil basket has clearly diminished.

A Calculated Balancing Act

India’s evolving energy strategy reflects careful calibration rather than dramatic realignment. New Delhi continues to maintain strategic autonomy, but it is also adapting to shifting global realities—economic pressures, geopolitical tensions, and the need for diversified supply chains.

The gradual reduction in Russian oil imports does not signify an abrupt break, but it does indicate a measured pivot. By strengthening ties with the United States and broadening its energy sourcing, India appears to be positioning itself for greater economic resilience and geopolitical leverage in an increasingly fragmented world order.

In essence, India is not merely changing suppliers—it is reshaping its strategic landscape.