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Between Aug. 31 and Sept. 1, Indian Prime Minister Narendra Modi attended the 2025 Shanghai Cooperation Organization’s summit meeting in China. Established by China in 2001 to manage border disputes, the organization now includes members like Iran, Pakistan, India, and faraway partners like the Maldives and Cambodia. Save India, all the member states are authoritarian or authoritarian-leaning regimes. At the summit, Modi and his Chinese counterpart, General Secretary Xi Jinping, committed to peacefully resolving Indian-Chinese border disputes. Symbolic gestures included Modi riding in President Vladimir Putin’s limousine. Substantively, participants discussed a Shanghai Cooperation Organization bank that would not use the U.S. dollar.

This was not Modi’s first attendance at the summit. He forwarded India’s vision for a multipolar world order in the 2022 summit, but also rebuked Russia’s President Putin by stating “today’s era is not an era of war,” and urged for stability and economic cooperation. Back then, Modi did not hold a bilateral meeting with Xi, because of the ongoing militarized border clashes caused by China’s occupation of disputed territory. In 2023, India hosted the summit, but switched to a virtual format, and Modi did not attend the summit in 2024.

Why did India’s stance change this year?

Indian sources have claimed that Modi’s actions were, in part, influenced by the U.S. decision to impose 50 percent tariffs on Indian goods and services, purportedly in response to India’s surging imports of Russian crude oil. Peter Navarro, the president’s trade advisor, has been one of the most vocal advocates of this move, accusing India’s “big oil lobby” of financing Russia’s war machine by purchasing its crude. Indeed, as the United States presses for an end to Russia’s war against Ukraine, the Russo-Indian trade relationship has come under increasing scrutiny in Washington. According to official Indian sources, in 2024, exports to India provided Russia with $63.84 billion, while exports to Russia generated only $4.88 billion for India — indicative of a large trade deficit that New Delhi has with Moscow. In our latest research, we discuss the two main anchors of these trade ties: India’s long-held dependence on Soviet-Russian arms and its renewed reliance on Russian oil, with the latter being instrumental in ballooning trade imbalance between the two countries.

Russia has been India’s primary supplier of weapons since the mid-1960s. Even now, New Delhi remains Moscow’s largest arms customer. Similarly, since Russia’s full-scale invasion of Ukraine, Russia has become India’s top crude oil supplier — while India imported $2.31 billion worth of Russian crude in 2021, this figure surged to $25.5 billion in 2022, only to climb further to $48.6 billion in 2023 and $52.7 billion in 2024. Russian crude is bought and refined by large Indian refineries for domestic consumption, as well as for the burgeoning re-export business.

This nexus of guns and oil linking Russia and India is now threatening New Delhi’s relationship with its major strategic partner, Washington, while ostensibly softening its ties with Beijing — a historic rival and a long-term security concern.

Why Does India Need Russian Arms?

Approximately 60 percent of India’s weapons, from tanks and fighter jets to surface ships and its nuclear submarine program, are of Russian origin or license-produced versions. India’s dependence on Russia for arms stems from its economic constraints as a developing country and the need to maintain a sizable standing army because of its historically hostile relations with Pakistan and China — thus necessitating the rapid delivery of weapons in large numbers .

By the 1960s, India’s increasing security concerns, due to its defeat in the war with China and a stalemated conflict with Pakistan, combined with the refusal of its then traditional arms supplier — the United Kingdom — to allow India licensed production, led to a deepening of defense ties between Moscow and New Delhi. For instance, while talks with the United Kingdom ultimately failed over India’s attempt to acquire an export variant of the English Electric Lightning supersonic fighter jet, the Soviet Union offered its second-generation supersonic MiG-21, which India could both purchase on a loan and produce domestically under license. In the years that followed, the Soviets generally retained an edge over Western suppliers by offering highly attractive financial terms — lower interest loans, longer repayment periods, and the option of payment in Indian rupees.

This past dependence, in addition to its present inability to finance large-scale purchases of completely new systems, forces India to primarily operate older Soviet-Russian weapons or look to indigenous alternatives and upgrades. Of the 2,400 artillery pieces in India’s possession, most are Soviet-origin towed 122 mm D-30 howitzers or Israeli-upgraded versions of the Soviet-origin towed 130 mm M-46 howitzers. Similarly, India’s Russian-origin T-72 and T-90 tanks, which make up most of its fleet of 3,700–4,200 tanks, are from the late Cold War era and are being upgraded for future service. In terms of infantry fighting vehicles, approximately 2,500 are license-produced Soviet-origin and locally produced BMP-2s, which are being indigenously upgraded. India’s air force, too, primarily operates a special variant of the 1990s Russian Su-30 aircraft and continues to rely on the 1980s Soviet MiG-29. The May 2025 Indian-Pakistani conflict has underscored the scale and depth of India’s dependence on these systems, with most of the weapons used by New Delhi, including fighter jets, missiles, and air defense systems, being of Soviet-Russian origin. Finally, India’s defense exports also rely on Russian technology and components, such as the co-developed BrahMos cruise missile now being operated by the Philippines and potentially by Indonesia and Vietnam. India has also agreed to collaborate with Russia to upgrade and re-export its T-72 tanks to countries in Africa, the Middle East, and Southeast Asia.

However, beginning in the 2000s — and becoming more pronounced since 2014 — India has made a notable pro-Western shift in its higher-end defense procurements, in part due to New Delhi’s concerns over the performance of Soviet-Russian systems that have only deepened with these weapons’ failures on the Ukrainian battlefield since 2022.

Why Does India Need Russian Crude Oil?

As with weapons purchases, Russia’s energy relations with India began during the Soviet era. Between the early to mid-1980s, around 70 percent of India’s commercial imports from the Soviet Union were comprised of crude oil and petroleum products. The Soviet collapse triggered a parallel decline in Russo-Indian oil trade, with Middle Eastern countries, including Iraq, Saudi Arabia, and the United Arab Emirates, becoming India’s major oil suppliers. Prior to Russia’s 2022 invasion of Ukraine, New Delhi imported only around 2 percent of its oil from Moscow. Such low import volumes were in part explained by higher freight costs than those of Middle Eastern producers.

The situation changed drastically once Russia, stricken by sanctions and the $60 oil price cap, began offering discounted crude to willing buyers. In the first nine months of 2023, India paid an average of $525.60 per ton for delivered Russian oil, including shipping and insurance costs, compared to $564.46 per ton for Iraqi oil of similar quality. By the end of that year, India had overtaken Europe as the largest purchaser of seaborne Russian crude, while Russia had displaced Iraq as India’s top oil supplier. This opportunistic pivot to Russian crude has saved New Delhi at least $17 billion since 2022 and, until recently, did not draw U.S. condemnation. As the previous U.S. administration viewed the price cap as a way to curb Russia’s energy revenues without triggering major spikes in global energy prices, it likely acquiesced to India’s increased purchases of Russian crude.

This dramatic shift to Russian crude, however, has hardly reflected on Indian consumer prices. Instead, the main beneficiaries have been Indian refineries, including the privately owned Reliance Industries Limited and Nayara Energy. Russian energy giant Rosneft became the latter’s majority stakeholder in 2017. Our research has shown that, between March 2022 and June 2025, over half of discounted Russian crude exports to India went to these two companies. Other sources have reported similar trends. For instance, it has been estimated that Reliance’s gigantic Jamnagar refinery increased its crude imports from Russia from 3 percent in 2021 to an average of 50 percent in the first half of 2025. From February 2023 to July 2025, it refined and exported $85.9 billion worth of resulting oil products, including those derived from Russian crude, globally. Roughly 42 percent of those exports went to countries sanctioning Russia. Similar trends have been observed with Nayara’s Vadinar refinery: 66 percent of Vadinar’s crude imports so far this year have come from Russia.

Before the adoption of the European Union’s 18th sanctions package, which will ban third-country imports of refined petroleum products made from Russian crude starting January 2026, the continent was considered a highly lucrative export market for Indian refineries, particularly Reliance. S&P Global valued those exports at $20.5 billion in 2024 — an almost 250 percent increase from $5.9 billion in 2019. Some analysts warn that, given the resilience and adaptability of sanctions-evading supply chains, the grace period until January 2026 could allow the creation of new networks through countries capable of masking cargo origins.

How Can the United States Separate India from Russia?

India’s current dependence on Russian arms is a legacy of decades of purchases requiring further maintenance and upgrades rather than new orders. In reality, New Delhi does not want to be dependent on outside powers for arms, yet its own defense industrial base cannot support this ambition in terms of both technology and production at scale. Thus, a critical step to facilitating India’s divorce from Russian arms supplies is to resolve its long-standing problem of requiring weapons in quantity, affordably, and fast. Given the current high demands from the U.S. forces, allies, and partners due to the Russo-Ukrainian war and China’s growing threat to Taiwan, we propose two solutions. First, the United States should facilitate co-production of arms and related products via agreements like the U.S.-India Initiative on Critical and Emerging Technology. Washington should also streamline the International Traffic in Arms Regulations process and institutionalize exceptions like India’s election to Tier 1 of Strategic Trade Authorization in 2018. Second, the United States should cooperate with NATO members due to established procedures about secrecy, intellectual property rights, and technology transfers to help India reduce its overdependence on any single supplier.  Such cooperation could cover providing platforms that can be rapidly shipped in quantity, like standardized designs of the Rafale or the Eurofighter Typhoon fighter jets; components for India’s indigenous platforms, as stipulated by the Defense Acquisition Council in June 2025 — for instance, naval propulsion systems for India’s surface ships akin to Everllence’s recent contract; and technology transfers, including co-developing indigenous alternatives to Russia’s T-14 Armata tank currently being offered for co-production.

In the energy domain, even before the 50 percent U.S. tariffs, India was likely to gradually reduce its energy ties with Russia, in part due to a massive trade imbalance that has made bilateral trade one-sided, as well as due to shrinking discounts on Russian crude, which over time would have pushed New Delhi to diversify procurement in search of better pricing. But as the Trump administration appears eager to deliver tangible results sooner rather than later, the imposed 50 percent tariffs could trigger visible shifts in India’s crude acquisition patterns starting this October. Yet, for now, India’s crude import volumes from Russia show little change. Though, as some argue, if India were to halt imports of Russian crude, it could trigger a temporary spike in global oil prices and further strain U.S.-Indian relations.

While tensions persist, with Washington now pressing Brussels to impose new tariffs on Beijing and New Delhi over their purchases of Russian oil — a step the European Union currently seems unwilling to take — opportunities also remain. This month’s developments — including President Donald Trump’s declaration and Modi’s reciprocation of the positive nature of their own and the Indian-U.S. relationship, the tariff exemption on 31.3 percent or $28.4 billion of India’s exports to the United States (particularly minerals and pharmaceuticals), and the continuation of defense equipment-related negotiations — may signal an easing of tensions between Washington and New Delhi. It behooves us to mention here that Indian media outlets’ portrayals of the Trump administration’s tariff-related decisions have also varied, likely shaped by their affiliations with Indian oil refineries. For instance, while the Reliance-owned Network-18 has called the current U.S.-Indian relations “frosty” and the tariffs “punishment,” other outlets with no direct ties to Indian oil companies have adopted a more fact-driven and less editorialized tone.

Should Washington revise its stance on the Indian tariffs due to changed circumstances — as allowed under Trump’s Executive Order — it could take other measures to target Russia’s oil revenues and accelerate India’s pivot away from Russian crude (the latter being a “top priority” for the Trump administration, according to Trump’s pick as the next U.S. Ambassador to India, Sergio Gor). One such option could be to require importers of Russian crude, like India, to remit a portion of the discount they get on Russian barrels as a surcharge to the U.S. government. Should a similar measure be considered, we propose that the collected funds be invested in joint U.S.-Indian projects aimed at facilitating a faster military and energy shift for India away from Russia and toward the United States.

Vasabjit Banerjee is an assistant professor of political science at the University of Tennessee, Knoxville.

Tina Dolbaia is an associate fellow with the Europe, Russia, and Eurasia Program at the Center for Strategic and International Studies in Washington, D.C.

Image: Midjourney