India’s evolving relationship with the United States is gradually reshaping parts of its trade and strategic landscape, but expectations of a clean break from Russia appear misplaced. Recent data trends show that while India’s dependence on Russian crude oil has begun to fluctuate and moderate, its defence ecosystem remains deeply intertwined with Russian technology, platforms and supply chains.

Commerce ministry data show that Russia accounted for roughly 24 percent of India’s crude oil imports in December, marking the lowest share in three years. This shift is notable because Russia had emerged as India’s single largest crude supplier after 2022, when discounted oil became available amid Western sanctions following the Ukraine conflict.

Russian crude’s share had surged from negligible levels in early 2022 to peaks exceeding 40 percent during parts of 2024. Through 2025, however, the pattern has become less consistent, suggesting that India is actively recalibrating its sourcing mix rather than expanding reliance. This moderation had already begun before the announcement of the India US trade deal, indicating that commercial and logistical factors were at play alongside geopolitical considerations.

The oil story, however, is only one part of a far more complex equation.

In defence, the picture looks materially different. Russia still accounted for approximately 36.5 percent of India’s defence imports between 2019 and 2024. While this represents a sharp decline from nearly 78 percent during 2007–12, the absolute level of reliance remains high, especially in certain critical categories where diversification is difficult in the short to medium term.

Russia accounts for nearly 95 percent of India’s armoured vehicle imports and about 41 percent of missile imports. Joint production programmes such as BrahMos have further entrenched technological and operational linkages that go beyond conventional import data. In air defence systems, Russia continues to account for more than half of India’s imports, and its role in engine supplies has expanded over time.

This means that even if fresh procurement shifts toward Western suppliers, the installed base of Russian-origin equipment across the Army, Navy and Air Force ensures continued engagement for maintenance, spares, upgrades and life-cycle support for decades.

At the same time, data show visible diversification in selected segments. Russia’s share of aircraft imports has dropped sharply from around 79 percent during 2007–12 to about 31 percent in 2019–24. Missile dependence has reduced from over 85 percent to roughly 41 percent, and imports of sensors from Russia have effectively ceased in recent years. These shifts indicate a long-term strategic intent to diversify, but not an immediate ability to delink.

Beyond energy and defence, broader trade data reflect a nuanced relationship rather than a retreat. Indian exports to Russia have declined in nine of the past eleven months, suggesting some softening in trade momentum. However, India’s imports of non-oil goods from Russia have increased, pointing to evolving commercial linkages rather than disengagement.

Investment trends reinforce this complexity. Russian investment in India has risen by about 30 percent since FY15, with foreign direct investment reaching roughly $1.3 billion in 2024 compared with around $1 billion a decade earlier. Despite this increase in absolute terms, Russia’s relative position as an investor has slipped, now ranking around 30th among foreign investors in India, down from 19th in 2015.

Taken together, these trends underline a key reality for policymakers and markets: India’s external alignment is becoming more multi-layered rather than binary.

For investors, this has implications across sectors. The moderation in Russian crude dependence reduces concentration risk in energy sourcing and supports India’s ability to navigate sanctions-related volatility. It also indicates greater flexibility in crude procurement strategy, which is positive for refiners and for macro stability in periods of geopolitical stress.

However, the persistence of defence dependence suggests that any escalation in Russia-related sanctions or supply disruptions could have operational implications for India’s military preparedness and defence procurement pipeline. This is particularly relevant for domestic defence manufacturing, where Russian-origin platforms form the backbone of existing inventory.

Energy diversification supports refining margins stability and reduces geopolitical supply risks. Defence sector companies linked to indigenisation, spares manufacturing and technology substitution may see long-term opportunity as India gradually reduces platform-level dependence.

• Oil and Gas : Positive from a risk diversification perspective

• Defence and Aerospace : Structural opportunity for localisation, but continued Russian linkage in the medium term