US President Donald Trump has claimed that India has agreed to halt its imports of Russian crude oil as part of a new trade deal that slashes tariffs on Indian goods from 50 per cent to 18 per cent.

Posting on his Truth Social platform, Trump described Prime Minister Narendra Modi as "one of my greatest friends" and stated that New Delhi would pivot to sourcing oil from the United States and Venezuela instead.

India currently imports around 1.5 million barrels of Russian crude per day, accounting for over one-third of its total oil imports, according to data from global trade tracker Kpler. This makes India the world's second-largest buyer of Russian oil, a position it solidified after discounted prices emerged following Russia's 2022 invasion of Ukraine.

Trump's announcement on Monday emphasised that the deal would help "end the war in Ukraine," where thousands continue to die weekly. While full details of the pact remain undisclosed, the tariff reduction positions India favourably compared to neighbours like China, Pakistan, and Bangladesh, which face higher US duties.

Prime Minister Modi welcomed the "wonderful" tariff news in a post on X, praising Trump's leadership for advancing global peace, stability, and prosperity. Notably, however, he made no direct reference to curtailing Russian oil purchases, focusing instead on the economic uplift from lower tariffs.

India's government has long defended its Russian oil trade as vital for energy security. The country imports nearly all its oil needs, with refineries optimised for processing heavy, sour crudes like those from Russia. This shift began post-invasion, as discounted Russian supplies helped stabilise India's economy amid volatile global prices.

Historically, India-Russia ties centred on defence, with Moscow supplying the bulk of New Delhi's military hardware. Energy was a smaller pillar until recent years, when India capitalised on Russia's need to redirect exports away from sanctioned Western markets.

Trump asserted that India would replace Russian imports with oil from the US and "potentially Venezuela." Venezuelan crude shares qualities with Russian oil—heavy and sour, ideal for Indian refineries producing diesel and fuel oil. Yet challenges loom large.

Venezuela's oil production has plummeted from over 3 million barrels per day in the late 1990s to far lower levels today, crippled by dilapidated infrastructure under its socialist regime. Restoring capacity would demand tens of billions in investment and over a decade of work.

India, the world's third-largest oil importer, buys more from Russia daily than Venezuela produces annually in viable volumes. Experts like Rob Haworth, senior investment strategy director at US Bank Asset Management, note that fully substituting Russian supplies would require massive investments.

"Over time, this may create additional challenges for the Russian economy," Haworth told CNN, highlighting potential pressure on Moscow's war funding. Still, Indian officials have prioritised pragmatic energy deals over geopolitical alignment.

Russian oil has repeatedly stalled India-US progress. In December 2025, President Vladimir Putin visited New Delhi and pledged "uninterrupted shipments" despite US pressure. Trump claimed in October that Modi had promised a halt, but no deal materialised then.

External Affairs Minister S Jaishankar has framed such trade pacts as boosters for "Make in India" and growth. Industry leaders hailed the tariff cut as a "turning point" in bilateral ties, potentially unlocking exports in textiles, pharmaceuticals, and electronics.

The deal arrives amid Trump's renewed focus on trade imbalances. India's US exports have grown, but punitive tariffs—initially 25 per cent—had strained relations. Reducing them to 18 per cent could save Indian exporters billions annually.

For Russia, losing India's market would sting. Seaborne Russian crude exports to India hit record highs in 2025, sustaining revenues despite G7 price caps. A full cutoff could force steeper discounts elsewhere.

India's refiners, including state giants like Indian Oil Corporation, have adapted seamlessly to Russian grades. Switching to US light sweet crudes might demand refinery tweaks, raising costs short-term. Venezuela, under US sanctions relief pressures, could benefit. Limited shipments to India have already begun, but scaling up hinges on political stability and foreign investment.

Sceptics question the timeline. India's energy ministry has not confirmed the oil pivot, and Russian supplies remain cheaper. Logistics, too, favour nearby Middle East and Russian ports over transatlantic hauls.

Trump's rhetoric ties the deal to Ukraine peace, echoing his campaign pledges. Yet analysts doubt oil shifts alone would end the conflict, given Europe's ongoing Russian gas dependence.

As details emerge, markets watch closely. Brent crude dipped slightly post-announcement, reflecting supply shift expectations. Indian shares in export sectors rose, betting on tariff relief.

This pact underscores India's multi-alignment strategy: economic pragmatism with the US, energy realism with Russia. Whether it fully materialises—and at what pace—will shape South Asia's energy landscape for years.

Agencies