In what may be seen as a huge blow to US President Donald John Trump, Russia has announced that it would continue to supply crude oil to India at a 5% discount, in spite of sanctions imposed by Washington DC on Moscow. In other words, India will be able to purchase crude oil from Russia at a cheaper rate. The Kremlin has also decided to open its domestic market for Indian goods. Political analysts believe that Russia’s decision would put the Trump Administration under tremendous diplomatic pressure.

Evgeniy Griva, the Deputy Trade Representative of Russia to India, made an announcement in this regard on August 20, 2025. Speaking at an event in the Indian capital of New Delhi, he stressed: “There will be a 5% discount, subject to negotiation, on Russian crude oil purchases to India.” He told the audience: “Despite the political situation, approximately the same level of oil will be imported by India. As for discounts, it’s a commercial secret. I think, because it’s usually just dialogue between businessmen and approximately usually 5%. It’s fluctuating, but usually it’s plus-minus 5%.“

For his part, Russian Deputy Chief of Mission Roman Babushkin stated that although it was a “challenging situation” for New Delhi, “we have trust in our ties“. He further said: “We are confident that India-Russia energy cooperation will continue notwithstanding the external pressure.” Analysts consider Babushkin’s statement quite significant in the current situation.

The US and its Western allies imposed economic sanctions on Moscow after President Vladimir Vladimirovich Putin started conducting special military operations in Ukraine on February 24, 2022. The Western World also removed several Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system, effectively cutting those banks off from international financial transactions. The move prompted President Putin to make a bold decision in order to save the Russian economy as he decided to sell crude oil to friendly nations, including India, at cheap rates. New Delhi immediately accepted his proposal and started importing Urals crude from Moscow. Several Indian companies earn huge amounts of money by selling petroleum products (mainly petrol and diesel) produced from Russian crude to the Western European market.

Significantly, Indian Minister of External Affairs Dr Subrahmanyam Jaishankar and National Security Adviser (NSA) Ajit Doval visited Moscow after the US President imposed 50% tariffs on Indian products. President Putin held separate meetings with the two Indian officials to discuss various aspects of bilateral ties. Dr Jaishankar visited Moscow on August 19-21, 2025 to co-chair the 26th Session of the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC). Speaking at the event, First Deputy Prime Minister of Russia Denis Valentinovich Manturov said that Moscow was counting on expanding nuclear energy cooperation with New Delhi. He also said that the demand for new products was being created in his country for urbanisation and modernisation, inviting Indian companies to seize this opportunity. He expressed hope that a Free Trade Agreement (FTA) between the two countries would remove all obstacles. Interestingly, Griva announced additional 5% concessions on the sale of crude oil to India hours after Dr Jaishankar’s arrival in Russia.

It’s not that Russia has always offered the same concessions on crude oil over the past three and a half years. Moscow lowered crude oil prices significantly after invading neighbouring Ukraine. The Kremlin reduced the level of its oil discount for India in recent months, from around USD 8.50 per barrel in FY24 to about USD 1.50 per barrel recently. The Putin Administration has decided to extend the discount, yet again. Therefore, India may increase the volume of imports of Urals crude in the coming months.

Indian products have become more expensive in the US market because of additional tariffs imposed by President Trump, making it difficult for India to export goods to the US. In such a situation, the Russian Embassy in New Delhi has hinted that Moscow might open its market for Indian products. The Russian Embassy has also projected a 10% annual growth rate for bilateral trade. This forecast indicates strengthening economic ties and potential expansion of cooperation in various sectors, including energy, defence and technology, between India and Russia.

Boundless Ocean of Politics on Facebook

Boundless Ocean of Politics on Twitter

Boundless Ocean of Politics on Linkedin

Contact us: kousdas@gmail.com

Published by Koushik Das

Koushik Das (born on May 16, 1976 in Kolkata) is a career journalist. Based in the Indian capital of New Delhi, Koushik writes mainly about foreign policies and current geopolitical issues, and rarely about other topics. His own political ideas are highly influenced by Antonio Gramsci, Louis Althusser, Michel Foucault, Michael Oakeshott and others. English philosopher and political theorist Oakeshott (Dec 11, 1901-Dec 19, 1990) says that “in political activity, men sail a boundless and bottomless sea. There is neither harbour for shelter nor floor for anchorage, neither starting-place, nor appointed destination. But we have to keep afloat”. (Rationalism in Politics, 1962) As a student of Political Science, Koushik loves to share his views on issues, which have great impacts on his thought process (and also on India, South Asia and of course on the global community), with his readers through his website – Boundless Ocean of Politics. By doing so, he tries to keep himself afloat. You will find some of his articles in https://inserbia.info/today/ (https://inserbia.info/today/author/kou_das13_i/), as he has been trying to assess the global geopolitics since 2003. You can also mail him at kousdas@gmail.com View all posts by Koushik Das