US deal links tariff cuts to India diversifying crude imports, but New Delhi has not confirmed any shift.
Venezuela may re-emerge as a supplier as India remains open to commercially viable crude options.
Replacing Russian oil would raise India’s import bill by under 2%, according to ICRA.
India today underscored that ensuring the energy security of 1.4bn citizens remains the government’s “supreme priority”, responding to claims by US President Donald Trump that New Delhi has agreed to stop buying Russian oil.
"Insofar as India’s energy sourcing is concerned, ensuring the energy security of 1.4bn Indians is the supreme priority of the government," said Randhir Jaiswal, spokesperson for the Ministry of External Affairs.
1 January 2026
Get the latest issue of Outlook Business
"Diversifying our energy sourcing in keeping with objective market conditions and evolving international dynamics is at the core of our strategy to ensure this. All of India’s actions are taken and will be taken with this in mind," he added.
On Monday, Trump announced that tariffs on India would be reduced to 18% and that Washington had finalised the trade deal with New Delhi. The US had earlier imposed sweeping tariffs of up to 50% on India, including a 25% punitive duty linked to India’s purchases of Russian energy.
According to Trump’s claims, India has agreed to stop buying Russian oil and diversify its crude imports toward the US and potential Venezuelan supplies. But New Delhi has not confirmed it yet.
Responding to queries around the possibility of energy ties with Venezuela, the MEA spokesperson acknowledged Caracas as New Delhi's long-standing partner in the energy sector, encompassing trade and investments.
"The country was among India’s major sources of crude oil until FY 2019–20, which were discontinued following sanctions. Imports from Venezuela resumed in FY 2023–24, before being halted again due to the re-imposition of sanctions. Indian PSUs have had a partnership with Venezuela’s National Oil Company, PdVSA and have been maintaining a presence in Venezuela since 2008," Jaiswal highlighted.
"Consistent with India’s approach to energy security, India remains open to exploring the commercial merits of any new crude supply options, including from Venezuela," he added.
Meanwhile, Prashant Vasisht, senior vice president at ICRA estimated that replacing Russian crude with market-priced crude would lead to an increase in the country’s import bill of less than 2%.
Russia on India-US Deal
Earlier this week, Kremlin Spokesman Dmitry Peskov reacted to the US claim regarding India and said that New Delhi is free to buy oil from any country, and there is nothing new about its decision to diversify its crude suppliers.
However, a day earlier, Kremlin also said that Moscow has not received any statements from New Delhi regarding the cessation of Russian oil purchases.
India currently imports nearly 1.1mn barrels per day (bpd) of Russian crude, according to analytics company Kpler. This marks a drop from the earlier average of 1.21mn bpd in December 2025 and more than 2mn bpd in mid-2025.
