India’s Balancing Act Between the US and Russia

• 09 Feb 2026

For Prelims: Tashkent Declaration, Initiative on Critical and Emerging Technology, Kudankulam Nuclear Power Plant, Strategic Petroleum Reserves 

For Mains: Evolution of India–Russia relations from Cold War to present, Comparative significance of India–US and India–Russia trade, Strategic autonomy in an era of economic coercion and sanctions 

Source:IE 

Why in News?

The US claims that India has “agreed to stop buying Russian oil” under the 2026 India–US trade understanding. The statement has revived questions about how India balances its long-standing partnership with Russia amid mounting geopolitical and economic pressure from the US.

Summary

• The US claim on ending Russian oil imports has sharpened India’s strategic dilemma of balancing deep defence and energy ties with Russia against growing economic, trade, and geopolitical pressure from the US. 
• India’s response reflects pragmatic multi-alignment: gradually diversifying energy and defence sources while leveraging US trade, technology, and Indo-Pacific partnerships, without formally abandoning Russia.

How have India and Russia Relations Evolved?

• Cold War Solidarity (1950-1991): The USSR publicly supported India’s sovereignty over Kashmir and Goa. 
  • The USSR remained neutral during the 1962 Sino-Indian war and successfully mediated the Tashkent Declaration after the 1965 India-Pakistan war. 
  • In 1971, facing a US-Pakistan-China axis during the Bangladesh Liberation War, India signed the historic Treaty of Peace, Friendship, and Cooperation with the USSR.  
    • This provided India with a de-facto security guarantee (nuclear umbrella) against US intervention. 
  • The USSR became India's largest defense supplier (providing ~70% of weaponry) and a key economic partner through the Rupee-Rouble trade arrangement. 
• Post-Soviet Drift (1991–1999): The collapse of the USSR (1991) coincided with India’s economic crisis. 
  • Russia looked Westward for integration and stopped offering "friendship prices" on arms. 
  • India liberalized its economy (LPG reforms) and began improving ties with the US and Israel. 
• Strategic Partnership (2000–2021):  In 2000, the "Declaration on Strategic Partnership" was signed by India and Russia. 
  • In 2010, the relationship was upgraded to a "Special and Privileged Strategic Partnership." 
  • Cooperation expanded beyond buyer-seller defense ties to Joint Development (e.g., BrahMos Missile) and energy (investments in Sakhalin oil fields). 
    • The Kudankulam Nuclear Power Plant (Tamil Nadu) became a symbol of civil nuclear cooperation, making Russia the only country building nuclear reactors in India at the time. 
      
• Economic Cooperation: Bilateral trade touched USD 68.7 billion in FY 2024–25, driven mainly by India’s energy imports, but remained heavily skewed in Russia’s favour. 
  • Both countries aim for USD 100 billion in trade by 2030 and USD 50 billion in mutual investments by 2025.  
  • Indian exports: Pharmaceuticals, chemicals, iron and steel, marine products. 
  • Indian imports: Crude oil and petroleum products, sunflower oil, fertilisers, coking coal, precious stones and metals. 
• Defence Cooperation: It is the cornerstone of the partnership, guided by the 2021–2031 military-technical cooperation agreement. 
  • Regular exercises like INDRA and Zapad-2025 reinforce interoperability. 
• Ukraine War Impact:  Western sanctions drove India to buy discounted Russian oil, sharply raising its share in India’s imports and pushing trade to record levels. 
  • The US argues this indirectly funds the Ukraine war and imposed punitive tariffs, recently rolling them back with a strict monitoring and snap-back clause.  
    • The US now seeks to replace Russia as India’s energy partner by pushing US crude, LNG, and alternatives like Venezuelan oil. 

What is the Significance of India-US Trade versus India-Russia Trade? 

• Trade Volume Disparity: 
  • India-US Trade: The US is India’s largest market with a total trade volume of USD 128 billion.  
    • Unlike its deficit-heavy trade with Russia or China, India enjoys a substantial trade surplus with the US, driven by high-value goods exports and large-scale services exports. Additionally, as a top source of Foreign Direct Investment (FDI), the US directly fuels India’s startup ecosystem and infrastructure, creating a 'wealth multiplier' effect. 
    • Under the Initiative on Critical and Emerging Technology (iCET), trade is shifting from commodities to strategic tech and space cooperation is vital for India’s goal to become a developed nation (Viksit Bharat) by 2047. 
  • India-Russia Trade: Bilateral trade reached USD 68.72 billion in 2024-25, but it is heavily skewed.  India imported USD 63.84 billion (mostly oil) while exports were a meager USD 4.88 billion. 
    • The Russia relationship is currently transactional, primarily focused on buying commodities (oil/fertilizer) and legacy defense spares, without deep integration into India’s civilian economy. 
• Geopolitical Derivatives:  
  • The US Advantage: Deepening trade with the US aligns with the "Indo-Pacific" strategy.  
    • Economic integration acts as a "security guarantee," raising the stakes for the US to defend India’s stability against Chinese aggression. 
    • As global companies pursue a "China + 1" strategy, the US is indispensable for integrating India into global supply chains. 
  • The Russia Dilemma: Russia is increasingly economically subservient to China due to Western sanctions. 
    • Continued heavy reliance on Russia can risk indirectly exposing India’s supply chains to Chinese coercion. 
• Energy Security: The US- India tariff threat highlighted US’s readiness to weaponize market access, pushing India to hedge by shifting toward US and Venezuelan oil to reduce reliance on Russia and diversify its energy supply, even at a higher cost. 

What are the Challenges for India in the Current India–US –Russia Dynamic? 

• The "Russia-China" Nexus: A Russia that is economically subservient to China is less likely to support India’s interests in the UNSC or remain neutral during a Sino-Indian border crisis. 
• Defense & Security Vulnerabilities:  Around 60% of India's military inventory (Su-30 MKIs, T-90 tanks, S-400 systems) is Russian.  
  • Russia, amid increasing India- US trade, may deprioritize or delay critical spares and maintenance support. 
  • Russia has historically shared sensitive technologies (nuclear submarines, hypersonic missiles) that the West denies. Alienating Moscow could close this door permanently. 
  • Reducing reliance on Russian defence equipment is strategically necessary but operationally difficult, as Western systems are costlier, restrictive, and require new training and doctrine, risking short-term readiness in sensitive border situations. 
• Economic & Energy Challenges: Russian oil was cheap; US and Venezuelan oil will likely come at market rates.  
  • Furthermore, the freight cost from the Americas is significantly higher than from Russia or the Middle East.  
  • Indian refineries are technically calibrated to process the specific medium-sour grade of Russian Urals crude. Switching to US light-sweet crude or Venezuelan heavy crude requires technical adjustments, downtime, and efficiency losses in the short term. 
  • Higher landed cost of crude could spike domestic petrol/diesel prices, fueling inflation and widening the Current Account Deficit (CAD). 
• India’s Global South Leadership:  India’s claim to leadership of the Global South rests on principles of sovereignty, autonomy, and development-centric diplomacy. Prolonged strategic ambiguity in great-power conflicts risks diluting India’s normative influence and moral authority on global platforms. 

What Measures can India Adopt to Balance Ties in the Current India–US –Russia Dynamic?

• Accelerated Defense Indigenization: Under Atmanirbhar Bharat aggressively localize the production of critical spares and ammunition for Russian-origin platforms (Su-30s, T-90s) to inoculate the military from supply chain shocks. 
  • Continue purchasing high-tech platforms from the US (drones, jet engines), France (fighters, submarines), and Israel (sensors) to dilute Russia’s leverage. 
  • Reduce Russian dependency to <30% over the next decade, transforming Russia from a "sole supplier" to just "one of many vendors." 
• Energy Security: The "Portfolio Approach": India should treat energy security like an investment portfolio (diversified to manage risk). 
  • Actively engage West Africa (Nigeria, Angola), and Iraq to maintain a balanced basket. 
  • Expand India's Strategic Petroleum Reserves (SPR) capacity to buffer against supply disruptions from distant sources like the Americas. 
• Economic Insulation: Aggressively expand Free Trade Agreements (FTAs) like the India–EU FTA with major economies to reduce reliance on the US market as the sole engine of export growth. 
  • Strengthen the mechanism for Rupee-based trade to settle transactions without exposing Indian banks to the US financial system. 
  • Build domestic capacity in critical sectors (pharmaceutical APIs, green energy) to withstand global supply chain weaponization. 
• Leveraging Multilateralism: India should use its leadership of the "Global South" to create diplomatic space. 
  • Use membership in the Quad (with US) to counter China’s maritime aggression, while using BRICS (with Russia) to maintain continental relevance and manage the China-Russia axis.

Conclusion 

• India needs the US to become a USD 5 Trillion economy, create jobs, and access 21st-century technology. 
• India needs Russia to ensure that its energy bills remain manageable and its defense forces remain combat-ready during this transition phase. 

Therefore, India’s policy is not about "taking sides" but about de-hyphenating these relationships - engaging with the US for economic prosperity while maintaining functional ties with Russia for strategic security. 

Drishti Mains Question:

Compare India–US and India–Russia trade relations and analyse their implications for India’s long-term strategic autonomy.

 

Frequently Asked Questions (FAQs) 

1. Why did India increase Russian oil imports after 2022? 
Western sanctions forced Russia to offer discounted crude, which India bought to control inflation and ensure energy security.

2. Why is the U.S. opposing India’s purchase of Russian oil? 
The U.S. argues it indirectly funds the Ukraine war and exploits a “refining loophole” through Indian fuel exports. 

3. Why is India–US trade more significant than India–Russia trade? 
India–US trade is larger, diversified, surplus-generating, and linked to jobs, technology, FDI, and supply chains.

4. What is the main challenge in India–Russia defence relations today? 
Heavy dependence on Russian-origin platforms and spares amid sanctions and Russia’s China tilt.

UPSC Civil Services Examination Previous Year Question (PYQ)  

Prelims 

Q. Recently, India signed a deal known as ‘Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field’ with which of the following countries? (2019)

(a) Japan  

(b) Russia  

(c) The United Kingdom  

(d) The United States of America  

Ans: B

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Mains

Q. What is the significance of Indo-US defence deals over Indo-Russian defence deals? Discuss with reference to stability in the Indo-Pacific region. (2020)