- By Aditya Pratap Singh
- Tue, 03 Feb 2026 07:09 PM (IST)
- Source:JND
India-US Trade Deal: Ending the months of deadlock on the trade deal with India, US President Donald Trump has agreed on the bilateral trade deal between the two nations, reducing the tariff on Indian goods to 18 per cent from the earlier reciprocal tariff of 25 per cent.
The additional 25 per cent, which was levied as a penalty due to India's buying Russian oil, has also been reduced. This lowers the tariff significantly, especially for the sectors that have major exposure to the US market.
However, in his announcement, President Trump said that India would stop buying Russian oil. Earlier, he announced that India agreed to buy US-controlled Venezuelan oil. Meanwhile, as India is the world's third biggest oil importer and consumer--importing over 80 per cent of its consumption, the recent developments are creating a bit of confusion around whether it would lower or hike the fuel prices for India and its end consumers.
India Became Top Buyer Of Russian Oil
Ever since the war broke out between Russia and Ukraine in 2022, it has become the top buyer of Russia's discounted crude oil despite tariff threats from European countries and the US. In 2025 itself, India had imported 20.4 million barrels of crude oil from Russia. However, for the past few months,s India has reduced importing Russian oil.
Earlier, reports were suggesting that Reliance's oil refinery in Jamnagar had lowered its shipment of discounted Russian oil significantly in December. Additionally, state-owned refineries have also sharply decreased their oil purchases from Russia.
According to Kpler, a global real-time data and analytics provider, Oil imports from Russia stood at 1.2 million barrels, compared with 1.8 million barrels in the same months a year ago.
Where India Imports Its Crude Oil From
According to the data, India imported 21.59 million tonnes of crude oil in December 2025, the highest monthly oil import in nine months and an increase of about 7% year-on-year. India, the largest oil consumer, imports crude oil from the US, the Middle East, Russia, and Saudi Arabia. Meanwhile, the share of US crude oil in India's total oil imports rose to about 8.1% between April and November, from about 4–5% in the previous year, the Economic Survey said.
Would Change Petrol Diesel Prices In India
The terms and conditions of the dealhave nott been made public yet. Howeve reports are suggesting that India is likely to increase its oil imports from US sources, including US-controlled Venezuelan oil.
Given that the Russian oil is available to India at a discounted price as compared to the price in the global market, the oil import cost for India would only be knownis broughtr it is brought into the public domain. If the price were higher than what India is getting from Russia, then it would surely increase India's oil bill.
Meanwhile, the development mayord may not have a significant impact on petrol and diesel prices immediately, in the retail market, as they are decided through a very complex process.
How the Petrol and Diesel Prices are Decided in India
Daily petrol and diesel prices in India are determined by Oil Marketing Companies (OMCs) like IOCL, BPCL, and HPCL under a "dynamic pricing" model, introduced in 2017. Prices are updated daily at 6:00 AM based on a 15-day rolling average of international crude oil prices, the USD-INR exchange rate, excise duty, dealer commission, state-level value-added tax (VAT), and cess--if any.
Additionally, the Central Government imposes a fixed Excise Duty, which varies by state. Furthermore, transportation charges and ppartners'commission are being added as well.
Given the above scenario, the government has several llevelsto adjust the pricing.