Why India’s position on Russia matters?
The European Union is working toward a complete ban on imports of oil from Russia, as well as targeting the country’s wider trade through sanctions on shipping insurance. But it needs to realize that reducing Russia’s oil exports to zero is neither achievable nor desirable. Europe is frustrated at India’s apparent fence-sitting over Russia’s invasion of Ukraine. Europe should know that that maintaining a workable relationship with Russia is central to counter-balancing Chinese hegemony in their shared neighborhood. India also depends significantly on Russia for arms supplies, including advanced systems that help it keep pace with China.
India is pursuing what it views as its own interests, which are multiple but involve a real and ongoing effort to reduce its dependence on Russia. It is doing this while remaining wary of China, anxious to see Beijing’s power counterbalanced in the Indo-Pacific, and continuing to handle other issues in the neighborhood, such as its difficult relationship with Pakistan.
Russia rose to become India’s second biggest supplier of oil in May, pushing Saudi Arabia into third place but still behind Iraq which remains No. one. In May Indian refiners received about 819,000 barrels per day (bpd) Russian oil, the highest thus far in any month, compared to about 277,00 in April, the data showed. Russian grades accounted for about 16.5% of India’s overall oil imports in May and helped raise the share of oil from the C.I.S. countries to about 20.5%, while that from the Middle East declined to about 59.5% %, the data showed. India has defended its continued purchases of Russian oil and it must continue it. Oil purchase from Russia is a part of its long-standing effort to diversify its supplies and arguing a sudden halt to imports would jack up world prices and hurt its consumers.
Since the outbreak of the Russia-Ukraine war on Feb. 24, India – the world’s third-largest oil importer – has taken a firm stance on its insistence on buying Russian oil despite the EU ban as Moscow is selling its oil at an almost 30% discount. However, targeting India for buying Russian oil smacks of Europe’s hypocrisy and also a policy paralysis. While the US and Europe have been lecturing India on its place in history for undermining global efforts to corner Moscow, but New Delhi is simply keeping its self-interest at the fore — much like the West. And New Delhi must do what is in its core economic and strategic interest. Buying oil on the cheap is not a luxury but a necessity for India, which imports 85% of its oil needs. The heavy reliance on imported fuel means that when crude oil prices go up — as they have now — India’s finances come under extreme stress and budget estimates go for a toss.
Following European, US footsteps
India is putting its self-interest at the fore very much like the European Union, which continues to buy oil and gas from Russia; or the United States, which has refrained from banning Russian uranium imports for its nuclear plants, or Washington’s Middle Eastern ally Saudi Arabia, which is busy filling up its coffers with US dollars and doesn’t seem to be in any rush to pump in more oil to help steer prices lower.
The 27-member EU bloc, which relies heavily on Russia for its energy needs, has so far pushed back against full embargo on oil and gas — Moscow’s cash cow — arguing the ban would leave its citizens freezing in winter and tens of thousands of them jobless as high energy prices force energy-intensive industries like aluminum production to shut shop. It should be noted here that despite recent crude purchases, Russia remains a marginal player in the Indian market, accounting for less than 1% of India’s oil imports. This means that even if Indian oil imports are indirectly funding Moscow’s war machine, the amount is only a fraction of the billions the EU continues to dole out for Russian oil and gas.
