What Happened
- The Parliamentary Standing Committee on External Affairs, chaired by Congress MP Shashi Tharoor, met with officials from the Ministries of External Affairs and Commerce to review India's crude oil import policy and recent trade agreements.
- The government affirmed that India will continue importing crude oil from the cheapest and highest-quality non-sanctioned sources available, signalling continuity in its pragmatic energy procurement approach.
- The committee meeting covered three major trade developments: the India-US interim trade agreement framework (announced 6 February 2026), the India-EU Free Trade Agreement (concluded 27 January 2026), and Russian oil and agricultural imports.
- India's crude oil import dependency stands at approximately 87-88% of consumption, with Russia, Iraq, and Saudi Arabia as the top three suppliers.
Static Topic Bridges
India-US Interim Trade Agreement (February 2026)
The India-US Interim Trade Agreement framework, announced on 6 February 2026, is a bilateral trade arrangement that slashes US reciprocal tariffs on Indian goods from 50% to 18% and includes a commitment by India to purchase USD 500 billion worth of US goods over five years. Unlike a comprehensive FTA, an interim agreement covers limited sectors and serves as a stepping stone towards a broader deal. The agreement includes tariff concessions on industrial goods, agricultural products (dried distillers' grains, tree nuts, soybean oil, wine), and technology products including GPUs and data centre equipment.
- US tariff on Indian goods: reduced from 50% to 18% (reciprocal tariff)
- India's purchasing commitment: USD 500 billion over 5 years — covering oil, gas, coking coal, aircraft, precious metals, technology products
- India to eliminate or reduce tariffs on all US industrial goods and a wide range of agricultural/food products
- India to address barriers in medical devices, ICT goods import licensing, and standards harmonisation
- The 25% penalty tariff linked to India's Russian oil purchases was removed as part of the deal
- Framework for a comprehensive bilateral trade agreement to follow
Connection to this news: The parliamentary committee's review of the India-US deal is significant because the agreement reportedly includes provisions that may influence India's crude oil sourcing patterns — particularly the removal of the 25% penalty for Russian oil purchases, suggesting a diplomatic balancing act between India's energy interests and US strategic priorities.
India-EU Free Trade Agreement (January 2026)
The India-EU Free Trade Agreement, concluded on 27 January 2026, is a comprehensive trade deal between India and the European Union that followed nearly two decades of negotiations (initiated in 2007, suspended in 2013, relaunched in June 2022). It creates the world's largest free trade zone by population, encompassing over 2 billion people and nearly 25% of global GDP. The deal eliminates or reduces tariffs on approximately 97% of European exports to India and provides significant market access for Indian textiles, leather, marine products, and pharmaceuticals.
- Negotiations timeline: initiated June 2007, suspended 2013, relaunched June 2022, concluded 27 January 2026
- Coverage: approximately 97% of EU tariff lines; expected to save up to EUR 4 billion annually in duties for European exporters
- India opened 89.5% of its tariff lines covering 91% of UK's exports; safeguarded sensitive sectors (dairy, cereals, millets, pulses, gold)
- Bilateral trade (2024): EU is India's 2nd largest trading partner after the US; India-EU goods trade valued at over EUR 120 billion
- Sectors benefiting: Indian textiles, pharmaceuticals, chemicals, engineering goods; EU machinery, automobiles, wines
Connection to this news: The parliamentary review of the India-EU FTA alongside crude oil policy reflects the interconnection between trade agreements and energy security — the EU deal provides diversified export markets that reduce India's vulnerability to any single trading partner's pressure on energy sourcing decisions.
India's Energy Security and Crude Oil Import Dependency
India is the world's third-largest consumer and importer of crude oil, with an import dependency of approximately 87.7% (FY 2023-24). India's crude oil sourcing strategy is guided by the principle of buying from the cheapest and most reliable sources, a pragmatic approach that has led to a significant shift in supplier composition since 2022. Russia's share surged from under 2% pre-2022 to approximately 36% by FY 2024-25, making it India's single largest supplier, displacing Iraq and Saudi Arabia.
- India's crude oil consumption: approximately 5.5 million barrels per day (2024)
- Import dependency: approximately 87.7% (FY 2023-24)
- Top suppliers FY 2024-25: Russia (~36%), Iraq (~17%), Saudi Arabia (~11%), UAE, USA
- Pre-Ukraine-war Russia share: under 2% of India's crude imports
- India's total oil import bill: approximately USD 168 billion from Russia alone since the start of the Ukraine war (February 2022 to late 2025)
- Strategic Petroleum Reserve (SPR): India has 5.33 million tonnes (approximately 39 million barrels) of strategic storage at Visakhapatnam (1.33 MT), Mangaluru (1.5 MT), and Padur (2.5 MT) — operated by ISPRL (Indian Strategic Petroleum Reserves Limited)
- Phase II SPR at Chandikhol (Odisha) and Padur expansion under consideration
Connection to this news: The government's statement that India will continue buying from the cheapest sources reaffirms the pragmatic approach, even as the India-US trade deal removes the tariff penalty linked to Russian oil purchases. This represents India's strategic autonomy in energy procurement, balancing price sensitivity with geopolitical considerations.
Key Facts & Data
- India's crude oil import dependency: approximately 87.7% (FY 2023-24)
- Top supplier: Russia at approximately 36% share (FY 2024-25), up from under 2% pre-2022
- India-US interim trade deal: tariffs reduced from 50% to 18%; USD 500 billion purchasing commitment over 5 years
- India-EU FTA: concluded 27 January 2026 after negotiations spanning nearly 19 years (2007-2026)
- India's Strategic Petroleum Reserve: 5.33 million tonnes at 3 locations (Visakhapatnam, Mangaluru, Padur)
- Parliamentary Standing Committee on External Affairs: chaired by Shashi Tharoor (Congress MP)
- India is the world's third-largest consumer and importer of crude oil