India may get cheaper oil, more S-400s from Russia: Reports
What's the story
India is reportedly set to receive higher Russian oil discounts and an increased supply of S-400 surface-to-air missile systems. The price of Russia's Urals crude has dropped by $3-$4 per barrel on a delivered basis for cargoes loading in late September and October, Reuters reported, citing individuals who received the offers. This is a significant increase from the $2.50 discount offered last week and $1 in July.
Defense deal
Russia to expedite S-400 missile system deliveries to India
India is also reportedly negotiating with Russia for more deliveries of the S-400 missile systems. Moscow is expected to deliver the last two units to India in 2026 and 2027. The $5.5 billion deal was signed in 2018 for five units, three of which have been delivered. Russia remains India's largest arms supplier, although it has increased purchases from France and Israel. The Stockholm International Peace Research Institute reports that it accounted for 36% of India's military imports between 2020-2024.
Tariff impact
US tariffs on Indian imports
The development comes amid tensions with the United States over India's oil and arms trade with Russia. Last month, US President Donald Trump imposed 50% tariffs on Indian imports, including a 25% tariff specifically targeting India's Russian oil trade. In recent days, the US has accused India of "profiteering" from its reselling of Russian oil, a claim India has rejected as "unjustified and unreasonable."
Diplomatic relations
India continues to import Russian crude oil
Despite the US pressure, India has refused to bow down. India's Oil Minister Hardeep Singh Puri refuted claims of profiteering from Russian oil trade, stating that India's energy procurement is driven by national interest and market dynamics. "Exports keep supply chains functioning. Indeed, Europe itself turned to Indian fuels after banning Russian crude...The volume of exports and refining margins... remain broadly the same. There is no question of profiteering," he wrote in an article for The Hindu.
Market dynamics
CLSA warns of rising crude prices if India stops importing
Brokerage CLSA has warned that if India stops importing Russian oil, crude prices could soar to $90-100 per barrel. This is because India's exit from the market would leave up to one million barrels per day stranded, which would disrupt global supply and fuel inflation. The latest developments come after Prime Minister Narendra Modi met Russian President Vladimir Putin at the Shanghai Cooperation Organisation (SCO) Summit in Tianjin, China.