What does India want from Russia? by Sushanta Mallick & Brigitte Granville
As the war in Ukraine continues, India’s quest for self-reliance increasingly involves multidimensional international engagement. His deft approach means India’s upcoming 75th anniversary of independence will coincide with the country’s attainment of significant – and beneficial – geopolitical autonomy.
LONDON — If there was a prize for the most quotable commentary on international relations so far in 2022, Indian Foreign Minister Subrahmanyam Jaishankar would be in the running. Answer to criticism of his country’s neutral stance on the Russian-Ukrainian war at a security forum in Slovakia in June, Jaishankar said that “Europe must get out of the mentality that Europe’s problems are the world’s problems, but the world’s problems are not Europe’s problems”.
Like most major crises, war casts a harsh light on our times, and India’s response is particularly illuminating. India’s current foreign policy does more than illustrate how the conflict has intensified de-globalisation tendencies. It also highlights the paradox inherent in the country’s growing emphasis on “strategic autonomy” as the world fragments into rival centers of power: the United States and its alliance system against China and its main satellite, Russia. The essence of this paradox is that India’s quest for self-reliance – keeping its distance from Cold War 2.0 principles and seeking to leverage diverse relationships – involves multidimensional international engagement.
For example, European politicians painfully weaning their countries from imported Russian energy have criticized India for buying more Russian oil – after Western sanctions cut its price by about a third below the world market price. . Indian Russian crude purchases rose to 1.1 million barrels per day (mbpd) at the end of July and now accounts for more than a fifth of India’s oil consumption, up from just 2% last year.
The standard Indian official response is that, despite Europe’s extensive sanctions, the continent’s energy trade with Russia still dwarfs India’s. More tellingly, however, India’s purchases of discounted Russian oil are not only cushioning the blow to itself as a poor energy-importing country, but also helping to prevent even more economic hardship for the country. Europe. If the 4.3 mbpd of crude oil that Russia sold to the West last year (or six mbj including petroleum products) did not have alternative markets like India, the world price of oil would be even higher.
Recognizing the importance of keeping Russian oil on the market, the G7 has now devised an alternative sanctions strategy that could present India with its next big test. The West’s Plan A was to combine, by the end of 2022, a partial embargo on direct imports of Russian oil with an attempt to stifle Russian oil exports to third countries by taking advantage of dominance Western (and especially British) market in the global marine insurance market.
Plan B is the so-called “price cap” mechanism. This would allow Russia to continue exporting oil but setting a maximum price just sufficient to cover its production costs, thus depriving the Russian state of any war financing rents.
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When the price cap system was first officially introduced at the G7 summit in June, several leaders, including German Chancellor Olaf Scholz, has publicly questioned its viability – in particular with regard to the compliance of third-party buyers of Russian oil. Even if Russia agreed to the cap, who would have access to its heavily discounted oil and who would pay the full market rate? Russia would be far more likely to simply cut production, hoping to make up for its losses with the resulting further price spike for any residual oil exports that escape the Western insurance net.
Either way, India will be in a pivotal position. While Russia’s opaque oil sales to China will continue regardless, India can expect various arbitrage opportunities. It will continue to import substantial quantities of Russian oil at ever lower prices. And should such imports weaken Western measures aimed at squeezing Russia’s oil rents, the United States is unlikely to threaten – let alone impose – secondary sanctions against India.
After all, successive US administrations – under Presidents Donald Trump and Joe Biden – have refrained from using their legal powers under existing law to impose secondary sanctions on India for continuing to buy Russian weapons. The reason is clear: a closer security partnership with India has become an essential part of America’s China policy. Specifically, the Quad – an informal security group comprising the United States, Japan, Australia and India – became the cornerstone of US Indo-Pacific strategy and would not survive US sanction of the one of its members.
Of course, the security relationship between the United States and India is mutual, given the real Chinese threat to Indian territory along the Himalayan line of real control – while the deadly border clash of June 2020 show. But India’s fear of China also implies a strategic dimension to its ties with Russia that goes far beyond opportunistic oil and arms purchases. India has an interest in keeping Russia close and not allowing a monolithic and distant Eurasian Russia-China axis to loom over the Indian subcontinent.
India is playing this multi-faceted game skillfully. In defense procurement, it has acquired advanced Russian S-400 air defense systems and agreed to extend until 2031 the local production under license of Russian weapons. But he also increased arms purchases from NATO members, notably France.
Moreover, India has many options to manage broader US sensitivities vis-à-vis Russia. For example, Russia urgently needs to replace the industrial inputs it previously imported from the West. This could provide new opportunities for Indian exports, which already represent a third higher than their pre-pandemic levelpartly thanks to the government Atmanirbhar Bharat (“self-governing India”) stimulus program for the manufacturing sector. India’s increased exports of pharmaceuticals and automobiles to Russia do not necessarily imply military support of the kind that has already led the United States to sanction various Chinese electronics manufacturers, as announced on June 28.
India’s relations with Russia are part of its nuanced and multidimensional foreign policy. This approach means that the upcoming 75th anniversary of India’s independence will coincide with the country’s attainment of significant – and beneficial – geopolitical autonomy.