Whats up, that is Priyanka Salve, writing to you from Singapore.
Welcome to the most recent version of “Inside India“ — your one-stop vacation spot for tales and developments from the world’s fastest-growing giant economic system.
India’s rising power necessities have gotten fertile grounds for a contest between the U.S. and Russia, as the 2 geopolitical rivals search a much bigger share of the world’s third-largest power market. This week I spoke to power consultants to grasp how the Iran conflict, commerce offers and tariffs are reshaping India’s power sourcing combine.
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The large story
India is changing into a primary marketplace for the U.S. and Russia, as the 2 adversaries search to realize a bigger pockets share of the world’s third-largest energy consumer.
The South Asian nation is the world’s third-largest importer of crude, fourth-largest purchaser of liquefied pure fuel, or LNG, and the second-largest importer of liquefied petroleum fuel, or LPG.
Whereas Russia needs India to proceed shopping for its crude, regardless of mounting strain of harsher U.S. tariffs, Washington has been pushing New Delhi to buy Venezuelan oil to switch Russian barrels.
Specialists instructed CNBC that changing Russian crude at a time when provide from the Center East is constrained can be “difficult” for New Delhi, even because the nation ramps up purchases of Venezuelan crude.
“If U.S. and Venezuelan crude are mixed, the Americas have gotten extra necessary to India’s crude basket,” Sumit Ritolia, lead analysis analyst at market intelligence agency Kpler, instructed CNBC.
Indian refiners can’t change Russian or Center Japanese barrels with U.S. crude as it’s of a “comparatively gentle” selection, whereas a number of Indian refineries are configured to course of medium and heavier crude, he mentioned. The “heavier” high quality Venezuelan crude solves that drawback.
India’s Venezuelan crude imports have risen from zero in March to 383,000 barrels per day to this point in August, in accordance with Kpler information. Along with U.S. crude imports, the 2 sources accounted for about 11% of India’s crude imports over that interval.
India’s prime power suppliers
On Monday, Russian President Vladimir Putin mentioned that “Russia is expanding its exports [to India] and is able to proceed doing so,” hinting at Moscow’s rising share of crude provides to New Delhi. It’s now India’s largest crude provider, accounting for greater than 50% of the nation’s oil imports in June and July and almost 43% in August to this point, in accordance with Kpler information.
Between April and July, Russian exports to India rose nearly 60% from final yr, in accordance with India’s newest commerce information. However Moscow is not the one one gaining a bigger share of India’s power market.
GURUGRAM, INDIA – MARCH 18: Site visitors congestion at Delhi-Gurugram expressway through the rain close to Signature Tower flyover, on March 18, 2026 in Gurugram, India.
Hindustan Instances | Hindustan Instances | Getty Photos
The U.S. has grow to be India’s top supplier of LPG, which is used as a major cooking gas within the nation, in addition to for LNG, which has industrial purposes. In July, over 70% of India’s LPG imports and almost a 3rd of LNG provides originated from the U.S, as per Kpler information.
The U.S. power provides to India have been “unmatched,” Sergio Gor, the U.S. ambassador to India, mentioned at an occasion in New Delhi on Saturday, including that Washington’s LPG and LNG provides to India had risen over 60% over final yr.
“The Center East — significantly Qatar, the UAE and Saudi Arabia — historically dominated India’s LPG imports because of its logistical benefit,” mentioned Pankaj Srivastava, senior vp of commodity markets-oil at Rystad Vitality. The Iran conflict has scuttled that benefit.
For the reason that begin of the conflict, the U.S. has emerged as a number one provider “supported by bilateral power agreements, larger US manufacturing and constraints on Center Japanese provide,” Srivastava mentioned.
However the U.S. additionally needs a much bigger share of India’s crude basket. Over the past 12 months, it has used each tariff threats and the promise of a lucrative trade deal to construct strain on India to chop again its Russian crude imports.
In August final yr, Washington imposed 25% tariff on imports from India as a penalty for getting Russian oil, solely to revoke them in February this yr.
U.S. President Donald Trump mentioned the U.S. had agreed to chop tariffs in opposition to India to 18% after India had “agreed to cease shopping for Russian Oil, and to purchase rather more from the USA and, doubtlessly, Venezuela.”
India, nonetheless, has not endorsed the small print shared by Trump and maintains that guaranteeing power safety is the only real driver of its power purchases.
The tariff menace
Steep tariffs may make a comeback because the Russia Sanctions invoice that proposes up to a 100% levy on nations shopping for Russian power provides will transfer to the U.S. Home for last approval in September.
The final time India confronted 25% punitive tariffs, the nation’s imports from Moscow fell more than 13% within the monetary yr ending March 2026, whereas U.S. exports to the South Asian nation rose almost 16%.
That improvement has not been misplaced on the Russian management.
Putin, throughout his assembly earlier this week with India’s International Minister S. Jaishankar, alluded to the decline in commerce between the 2 nations final yr, earlier than including that “this yr it has been steadily rising.”
In August final yr, after the U.S. tariffs got here into impact, India’s Russia oil purchases progressively declined, falling in February this yr to its lowest stage in over three years at 1.06 million barrels per day. Barrels from Iraq, whose income is reportedly controlled by the U.S., however, rose throughout the identical interval, as per Kpler information.
However consultants instructed CNBC that the most recent U.S. tariff proposal is unlikely to result in any speedy discount in India’s buy of Russian oil, just because world crude provide is just too constrained.
We don’t anticipate Russian imports to ease at present, Ritolia of Kpler mentioned, including that “changing Russian barrels is technically possible, however economically and politically fraught.”
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Developing
Aug. 28: India industrial output for July
Aug. 31: India GDP information for April-June
