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5% Discount on Russian Oil to India: Defiance or Diplomacy Amid US Tariffs?

Russia offers India a 5% oil discount despite US pressure, while Trump’s tariffs hit Indian exports, raising stakes in energy and trade tensions.

Published By: Neerja Mishra
Last Updated: August 20, 2025 18:27:11 IST

Russia has assured India of continued oil supplies at a 5 per cent discount, even as US President Donald Trump raises tariffs to punish India. The clash highlights how India sits at the crossroads of global energy and geopolitics. 

While Moscow wants to keep its top Asian buyers close, Washington wants to choke Russia’s revenue from oil. India, however, insists it will not bow to foreign economic pressure.

Moscow Stands by India

Russia’s deputy trade representative to India, Evgeniy Griva, confirmed that Indian oil imports will remain at roughly the same levels despite sanctions. He said a discount of about 5 per cent is usually part of negotiations between traders. 

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He described it as a flexible figure but consistent enough to make Russian oil attractive. Russian Deputy Chief of Mission Roman Babushkin added that the relationship is built on trust and will endure external challenges. He underlined that Moscow views India as a reliable energy partner.

US Tariffs Add Fresh Strain

United States has accused India of giving Moscow dollars that fund the war in Ukraine. White House trade adviser Peter Navarro said India acts as a global clearinghouse by converting embargoed crude into valuable exports. 

As a result, Washington has imposed 50 per cent tariffs on Indian goods such as textiles, marine products, and leather. The move, announced by Trump’s spokesperson Karoline Leavitt, was designed to put secondary pressure on Russia. She argued that the president wants to speed up the end of the war in Ukraine and has no patience for delay.

India Rejects ‘Unfair’ Sanctions

India has condemned the tariffs as unfair, unjustified, and unreasonable. Prime Minister Narendra Modi said India will not back down despite economic pressure. Officials fear that the steep US duties could hit India’s export sectors hard. 

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Yet, they maintain that India will not compromise its energy security to satisfy Washington. The government argues that its oil deals with Russia serve national interests and do not violate international law.

Geopolitics at a Crossroads

India currently has to strike a balance between being a vital strategic partner and a reliable energy supplier. Energy exports are essential to Russia’s survival under Western sanctions. 

Reducing those shipments is a key component of the US policy for Ukraine. India’s decisions will therefore shape not only its economy but also the balance of power in the wider world. 

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