Putin's Two-Day India Visit: Oil, Defence and Payments Dominate Agenda as New Delhi Balances Between Moscow and Washington Moscow's top priority during the summit is clear: protect Russian oil's dominant position in India, which has become Russia's largest market for seaborne crude since 2022.

Russian President Vladimir Putin lands in New Delhi this week for a two-day summit with Prime Minister Narendra Modi, marking his first visit to India in four years and signalling Moscow's push to stabilise a relationship strained by sanctions, shifting oil flows and mounting U.S. pressure on India's trade decisions.

The visit comes at a time when India's crude imports from Russia — once over 40% of its total oil basket — are set to fall to a three-year low, after tightened U.S. sanctions on Rosneft and Lukoil choked payment channels and forced Indian refiners to slash purchases. Yet Russia remains India's largest supplier of seaborne crude and is now looking to secure long-term market access as Western buyers continue to step back.

A heavyweight Russian delegation including the chiefs of Rosneft, GazpromNeft, Sberbank and Rosoboronexport highlights the intensity of Moscow's push to lock in deeper ties with India in oil, defence, trade, and financial systems.

"India's long-standing partnership in energy and defense and vibrant cultural ties continue to open new doors for innovation, and industry with an eye on a US$ 100 billion bilateral trade target by 2030. This is a partnership that is evolving with confidence and purpose, said Mr. Rajeev Juneja, President, PHDCCI."

Oil at the Heart of the Discussions

Moscow's top priority during the summit is clear: protect Russian oil's dominant position in India, which has become Russia's largest market for seaborne crude since 2022.

India's state-run refiners are treading cautiously. IndianOil is sourcing crude only from non-sanctioned suppliers; Bharat Petroleum is negotiating fresh orders; and Nayara Energy — partly owned by Rosneft — is now operating almost entirely on Russian oil as other suppliers pull back.

Russia is expected to ask India to: maintain higher Russian crude intake, secure long-term supply contracts, support Nayara Energy's refinery utilisation and retail expansion, resolve unpaid dividends stuck in Russian banks — dues owed to ONGC Videsh, Oil India and IndianOil through stakes in Vankorneft, Tass-Yuryakh and License 61

"Putin is coming with one big task: protect Russian oil's share in India at a time when sanctions are squeezing Moscow hard," says Michael Kugelman, Director, South Asia Institute at the Atlantic Council. "But India's energy matrix is far more complex today — its dependence on U.S. crude and LNG has grown."

India's Oil Imports From Russia: A Dramatic Shift

Before 2022, Russia supplied barely 1–2% of India's oil. That changed after the Ukraine invasion. In 2022, India imported $25.5 billion of Russia crude oil which constitutes 15 per cent share which went up to $52.7 billion making up 37.3 per cent share, and now till September, the import is $33.5 billion.

This explosion in Russian oil purchases has broadened India's trade deficit and triggered tariff retaliation from Washington.

Trade Deficit Looms Large

The imbalance is stark, the trade deficit numbers suggest the same. India's exports to Russia (FY25): $4.88 billion on the flip side, imports from Russia stands at $63.84 billion. While India exports agricultural goods, pharmaceuticals, chemicals and iron & steel, the bulk of its imports are crude oil — making the deficit heavily energy-driven.

India hopes that a proposed India–Eurasian Economic Union (EAEU) Free Trade Agreement, now under negotiation, will help diversify trade and bridge the gap.

Nuclear Collaboration to Expand

Civil nuclear cooperation remains the least controversial area in the relationship.

At Kudankulam in Tamil Nadu: Two reactors are operational, four reactors are under construction, Russia will push for new sites for large reactors, discussions will also include Small Modular Reactors (SMRs), long-term fuel supply agreements are expected.

Defence: Still the Core of the Relationship

Despite turbulence in energy ties, defence remains the strongest pillar.

Russia will pitch for Su-57 fifth-generation fighter jets for possible co-production. Faster spares and servicing for Su-30MKI squadrons. Additional S-400 air defence systems — India already has three units; two more are pending. "India can diversify oil but it cannot diversify defence overnight. Russian-origin systems form the backbone of the military," says Prof. Harsh V. Pant, Vice President, Observer Research Foundation.

India, meanwhile, will push for restoration of ONGC Videsh's 20% stake in the Sakhalin-1 project, faster delivery of spares, supply-chain stability amid global sanctions

The Trump Shadow Looms Large

U.S. President Donald Trump's recent decision to double tariffs on Indian goods to 50%, directly linking it to India's Russian oil purchases, has cast a long shadow over the summit.

India is negotiating a trade deal with Washington before year-end and is wary of provoking further tariff action or potential sanctions.

"This visit is happening under Trump's transactional gaze. Every India–Russia deal will be measured against the risk of U.S. retaliation," says a senior Indian official involved in the preparations.

Rupee–Rouble Mechanisms to Deepen

The two sides are expected to expand alternative payment systems:Rupee-rouble settlements, Sberbank's rupee-denominated letters of credit, Proposals for Russia to invest surplus rupees in, Government securities, Indian infrastructure. These mechanisms help both countries bypass Western financial systems and insulate trade from sanctions.

Connectivity & New Sectors in Focus

The upcoming summit places a strong emphasis on strengthening connectivity and expanding cooperation into new sectors. Key agenda items include reviewing progress on the proposed India–Eurasian Economic Union Free Trade Agreement, advancing the International North–South Transport Corridor (INSTC), and accelerating work on the Chennai–Vladivostok Maritime Corridor—three initiatives that could significantly reshape India's access to Eurasian markets. Beyond connectivity, New Delhi and Moscow will focus on deeper collaboration in rare earths, fertilisers, aluminium, railways, and advanced mining technologies. A broader industrial cooperation pact signed earlier this year is expected to push the partnership beyond its traditional oil-and-defence framework, driving diversification at a critical moment for both economies.

Why the Visit Matters

This visit stands out as one of India's most consequential diplomatic engagements of the year. It offers New Delhi an opportunity to stabilise its energy supplies amid global volatility, secure long-term maintenance and spares for its Russian-origin defence platforms, and expand ongoing nuclear and strategic cooperation. Equally important, the talks are expected to address alternative payment mechanisms to navigate sanctions-related challenges while allowing India to protect its geopolitical space at a time of heightened scrutiny from the United States and Western partners.

."India and Russia share a relationship built not only on stability but a deep historical shared interests. Stronger trade links and deeper energy cooperation will help both economies grow in an uncertain and fast changing geopolitical environment, " said Dr. Ranjeet Mehta, CEO & Secretary General, PHDCCI."

But the balancing act has rarely been tougher. As Pant puts it: "Energy may be shrinking in the India–Russia equation, but defence still binds the two. India's challenge is managing Moscow without angering Washington."