India’s oil import bill could see a sharp escalation of up to USD 12 billion if the country halts its purchases of Russian crude oil, according to a recent report by the State Bank of India (SBI). The report highlights that discontinuing imports from Russia for the remainder of the financial year 2025-26 would significantly inflate the nation’s fuel expenses in the coming years due to higher global prices.
SBI’s assessment indicates that if the government stops importing Russian oil for the rest of FY26, India’s fuel bill is likely to increase by USD 9 billion in FY26 itself, followed by an even steeper rise of USD 11.7 billion in FY27. This estimate is based on the assumption that replacing Russian crude with supplies from alternative sources—primarily from the Middle East, Africa, or the United States—would come at a higher price, given prevailing market conditions and freight costs.
In its report, SBI noted, “If India stopped oil imports from Russia during the rest of FY26, then India’s fuel bill might increase by only USD 9 billion.” The word “only” reflects that this figure, while substantial, would still be lower than the projected FY27 jump, suggesting a compounding effect over time as global oil markets adjust and potential discounts from other suppliers remain limited.
Since early 2022, India has emerged as one of the largest buyers of Russian crude, benefiting from steep discounts offered in the wake of Western sanctions on Moscow over its invasion of Ukraine. These discounted purchases have significantly reduced the country’s overall oil import costs, helping to ease pressure on the current account deficit and domestic fuel prices.
Industry experts warn that any abrupt shift away from Russian crude could leave India vulnerable to global price volatility. Without Russia’s discounted barrels, refiners may have to pay a premium for similar grades from other suppliers, thereby impacting inflation and the trade balance.
The report comes amid ongoing global debates over energy security, sanctions compliance, and geopolitical alignments. India has so far defended its purchase of Russian oil as a pragmatic economic choice, aimed at safeguarding national energy needs while keeping domestic fuel prices in check.
With crude oil imports accounting for more than 80% of India’s total oil consumption, even a moderate increase in prices can have a cascading impact on the economy, from transportation costs to industrial production. The SBI findings underscore the delicate balance policymakers must strike between diplomatic considerations and economic imperatives in the country’s energy strategy.
If the projections hold true, the decision to continue or cut Russian crude imports will not just be a foreign policy matter but a key factor in India’s economic stability over the next two years.
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