If India doesnt buy from Russia fuel bill could rise by only $9 bn: SBI Research
Even as the public discourse if full of US President Donald Trump's retaliatory 50% tariff on Indian goods and what its impact could be on the economy, SBI economists said even if (and that's a big if) India stopped buying crude oil from Russia, the impact would be limited to $9 billion in this financial year.
Kolkata: Even if India stopped buying Russian crude, the impact on the Indian economy would be limited to $9 billion in the current financial year (FY26), SEBI research, a thinktank of State Bank of India, has projected. The impact would be around $11.27 billion in the next financial year (FY27), it has estimated. "Russia accounts 10% of global crude supply. If all the countries stopped buying from Russia, crude price may increase by 10% if no other countries increase their production," SBI Research mentioned in a note circulated on Friday, August 9.
New Delhi has described Donald Trump's decision to double tariffs on Indian goods from 25% to 50% on the ground that India buys "massive amounts" of crude from Russia "unjustified" and has said it will protect the nation's economic interests. Against this backdrop, SBI Research has done this number crunching on Indian crude purchases from Russia.
Crude at a massive discount
After the Russia-Ukraine conflict in February 2022, when many nations were not buying oil from Russia, New Delhi took the smart step of cutting its oil import bill by raising its oil procurement from Russia. India began purchasing Russian oil which was available at a discount (capped at $60 per barrel) to ensure the nation's energy security. "Consequently, from merely 1.7% share in total oil imports in FY20, Russia's share has increased to 35.1% in FY25 and it is now the biggest oil importer for India. In terms of volume, India imports 88 MMT from Russia in FY25 from the total import of 245 MMT," wrote SBI Research in the note.
"If India stopped oil imports from Russia during the rest of FY26, then India's fuel bill might increase by only $9 billion in FY26 and $11.7 billion in FY27," said the report.
SBI Research has also furnished data to illustrate how New Delhi has increasingly sourced from Moscow. In FY20, Russia accounted for 1.7% of its imports from Russia while Iraq was at the top with 22.2%. This figure changed to 19.1% from Russia and 20.7% from Iraq in FY23. And in FY25, Russia accounted for 35.1% of Indian imports while Iraq was relegated to the position of a distant second accounting for 19.1%.
Before the war with Ukraine and Russia, India was purchasing from other countries of West Asia and Africa, etc.
Significantly, the US accounted for 4.8% of Indian crude imports in FY20, 6.3% in FY23 and 4.6% in FY25.