Russia is India’s most important supplier of armaments. India’s Prime Minister Narendra Modi reiterated the “privileged strategic partnership” with Vladimir Putin.
(Photo: imago images/Hindustan Times)
Bangkok While Western corporations are giving Russian oil a wide berth in view of the Ukraine war, there are no reservations in India. Indian Oil, the largest state-owned mineral oil company on the subcontinent, recently ordered three million barrels, as was announced at the beginning of the week. Shortly before the start of the Russian invasion, the New Delhi-based refiner had resumed buying Russian oil after a two-year hiatus.
The government in Moscow has reason to hope that the recent supply agreements will turn into a longer-term deal. Unlike Europe and America, India sees no reason to cut ties with Russia.
On the contrary: representatives of both countries are apparently working on deepening trade relations – and are preparing a payment mechanism with which they want to protect themselves against sanctions from the West.
Along with China, India is the second largest economy in Asia to maintain close ties with Russian President Vladimir Putin and has not condemned his war of aggression in Ukraine. The governments in Beijing and New Delhi alike abstained from votes in the Security Council and the General Assembly of the United Nations on resolutions directed against Russia’s actions.
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Russia is India’s most important supplier of armaments. India’s Prime Minister Narendra Modi last confirmed the “particularly privileged strategic partnership” with Russia in December.
New source of money for Vladimir Putin
Both countries are hoping for advantages from the expansion of oil trading that is now being discussed: India is banking on receiving Russian oil at a preferential price – and thus being able to cushion the rise in oil prices, which is extremely damaging to India’s economy.
Russia senses a new source of money that could offset the loss of export business with the West to a certain extent – the country needs a new buyer for 700,000 barrels a day simply because of the US import ban.
Russia’s Deputy Prime Minister and Energy Minister Alexander Novak said after a meeting with his Indian counterpart: “Russia’s oil exports to India have approached $1 billion and there are clear opportunities to increase that number.”
In India, there is a willingness to respond: Russia is offering its oil and other raw materials at greatly reduced prices, the Reuters news agency quoted government officials in New Delhi as saying. It was said that the offer would be accepted with pleasure.
India’s Oil Minister Hardeep Singh Puri said in Parliament that the government is examining all possible sources of supply for the raw material. India obtains around 80 percent of its oil requirements from abroad. Most recently, only two to three percent came from Russia.
According to India’s Oil Minister Hardeep Singh Puri, the government is examining all possible sources of oil. India obtains around 80 percent of its requirements from abroad
(Photo: imago images/Hindustan Times)
In order to secure business with Russia, according to Indian media reports, the authorities in New Delhi are now working on a payment system that will work regardless of Western sanctions – a model that India used in the past for business with Iran is regarded as a model.
According to the plans, cross-border transactions would no longer be settled in dollars, but directly in rupees and rubles. An Indian bank is said to have an account in Russia and a Russian bank in India.
The rupees that Russia would receive transferred to the account in India could be used by the country to buy goods in India. However, the two countries apparently still have to agree on the exchange rate.
It is also unclear how they intend to deal with India’s foreign trade deficit. Due to arms deals, among other things, India’s imports from Russia have recently been significantly larger than its exports to the country.
In 2018, India ordered the S-400 missile defense system from Russia for $5.4 billion. According to Russian information, the extradition began last year – against the resistance of the USA, which had already announced sanctions against India before the Ukraine war because of the arms cooperation.
So far, however, this has not happened – Washington does not want to lose India as an ally in the face of rivalry with China. US President Joe Biden spoke of unresolved differences with regard to India’s position on Russia. British Foreign Secretary Liz Truss called for closer defense cooperation with India to make the country more independent from Russia.
India’s Prime Minister Modi is also pursuing the goal of no longer being dependent on Russia’s military exports, at least in the long term. In a meeting with his security advisers on the Ukraine war over the weekend, he stressed the need to make India’s defense sector independent from abroad by increasingly manufacturing armaments domestically. This would not only increase India’s security but also strengthen the economy, it said.
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