India is moving to strengthen energy ties with Russia as supply disruptions and rising prices triggered by the US Israeli attack on Iran reshape its import strategy, according to people familiar with the matter, reports Reuters.
The shift comes just weeks after New Delhi reduced purchases of discounted Russian crude during negotiations with Washington over tariffs, a move widely seen as a concession to President Donald Trump.
Now, Indian and Russian officials have agreed to prepare for the resumption of direct liquefied natural gas supplies for the first time since the Ukraine war, with talks potentially concluding within weeks if India proceeds, two sources said.
The understanding was reached during a 19 March meeting in New Delhi between Russian Deputy Energy Minister Pavel Sorokin and Indian Petroleum and Gas Minister Hardeep Singh Puri, they said.
Alongside LNG discussions, both sides agreed to expand crude oil trade, with the possibility that Russian supplies could increase to at least 40 per cent of India’s total imports within about a month, according to three people familiar with the deliberations.
India, the world’s third-largest oil importer and consumer, purchased nearly $44 billion worth of Russian crude last year, benefiting from steep discounts following Western sanctions on Moscow after its invasion of Ukraine.
Officials in New Delhi have separately instructed importers to prepare for renewed purchases of Russian LNG, while also approaching Washington to seek a possible sanctions waiver, according to sources.
India’s external affairs and petroleum ministries did not respond to queries before publication, while Russia’s energy ministry declined to comment and the U.S. Treasury did not address questions on sanctions relief.
At a briefing on Friday, foreign ministry spokesperson Randhir Jaiswal said India’s energy policy is guided by domestic requirements, market conditions and global developments.
The recalibration follows a series of geopolitical shocks that have disrupted supply routes and pushed prices higher, forcing policymakers to reassess earlier decisions.
After years of importing discounted Russian crude, India sharply curtailed purchases following US tariffs of up to 50 per cent on its exports in August, among the most punitive imposed on any country. The US Supreme Court has since ruled those tariffs unlawful.
India’s calculations shifted again after the 28 February attack on Iran, which prompted retaliatory strikes targeting shipping in the Strait of Hormuz, a chokepoint through which about half of India’s crude oil and LNG supplies pass.
The disruption has already had visible effects, with long queues reported outside petrol stations and shortages of cooking gas in some areas.
Demand for Russian energy has increased across Asia as shipments to the region avoid the Gulf, reducing exposure to Middle East supply risks.
Indian state refiners began increasing purchases of Russian crude even before Washington announced a temporary waiver on March 5 allowing limited imports of sanctioned cargoes, with restrictions eased further as prices climbed.
Internal government assessments suggest that earlier reductions in Russian imports may have worsened the current situation.
A briefing prepared for the cabinet secretariat on 20 March said discounted Russian crude could have mitigated the impact of the Middle East crisis, warning that prolonged disruption would lead to higher inflation, a weaker currency and rising foreign debt.
The note estimated export growth could fall by between 2 per cent and 4 per cent, while wholesale inflation could rise by 0.3 per cent to 0.7 per cent.
Russia, which has maintained close ties with India since the Cold War, is seeking to expand cooperation beyond oil and gas.
Executives from Russian state grid operator Rosseti proposed collaboration on power transmission projects, particularly in remote and mountainous regions, according to one source.
Moscow is also exploring greater air connectivity, with representatives from St Petersburg’s Pulkovo Airport assessing the potential for additional direct flights to Indian cities.
At the same time, any new LNG deal is expected to be negotiated under less favourable terms than earlier agreements, reflecting tighter global supply conditions.
Trade ties between the two countries have deepened, with Russia’s Foreign Minister Sergei Lavrov saying most bilateral trade is now conducted in rupees and roubles.
Financial links have also strengthened, with rupee-rouble transactions accelerating significantly in recent years, according to industry executives.
India’s renewed engagement with Russia highlights the difficult balancing act faced by policymakers as geopolitical tensions, sanctions pressures and market volatility reshape global energy flows and strategic alignments.
