Afterwards of the Russian invasion of Ukraine on February 24, 2022, the Group of Seven (G7) made several decisions in order to prevent Moscow’s gaining high profits from oil export. In this regard, G7 has released a plan to impose a second cap on Russia’s oil shipments by sea as of December 5, 2022, and on refined petroleum products as s of February 5, 2022. Also, as long as the oil was sold below a fixed price, it has been determined that European companies were permitted to transport and insure Russian oil to third countries.
Moscow, which is facing Western countries sanctions, in order to hamper the decreasing of oil-price, has begun to sell oil at discounted prices to big Asian consumers. Afterwards, India increased its purchases from Russia of oil, which it had previously acquired from Iraq and Saudi Arabia. Russia, which made up just 0.2% of all oil imported by India in the year to March 31, 2022, becomes India’s top oil supplier in October 2022. [1]
In the weeks leading up to the beginning of the price-cap mechanism, Western countries effort to persuade the states to join the coalition of countries applying the price cap on Russian oil. Prior to her visit to New Delhi, Treasury Secretary Janet Yellen made the following statement regarding India’s need to comply with the Russian oil price caping: [2]
“Our objective is to hold down the price that Russia receives for its oil and keep that oil trading. The gainers from this will be particularly those countries that do buy cheap Russian oil, and our hope would be that India would take advantage of this price cap, though its firms are bargaining with Russia.”
India will continue buying Russian oil because it benefits the country, India’s foreign minister Subrahmanyam Jaishankar who is visiting Moscow for the first time since Russia invaded Ukraine, emphasised that the two countries were expanding their trade ties. [3] A significant point is that this statement was made before Yellen’s visit to New Delhi. As is seen, the Biden administration is unlikely to be able to reach its aims to divert New Delhi from Moscow and counterbalance Beijing with it.
In a joint press conference with his Russian counterpart, Sergey Lavrov, Jaishankar asserted that India-Russia relations would not rupture for some time to come, expressing the following words: [4]
Rus mevkidaşı Sergey Lavrov’la düzenlediği ortak basın toplantısında, Rusya-Hindistan ilişkilerinde Batı’nın beklediği kopuşun uzun bir süre gerçekleşmeyeceğinin altını çizen Jaishankar şu ifadeleri kullanmıştır:
“Russia has been a steady and time-tested partner. Any objective evaluation of our relationship over many decades would confirm that it has actually served both our countries very, very well.”
Although the main reasons behind India’s buying cheap Russian oil are the increasing global energy prices and its tiger economy which is growing day by day, it is claimable that India-Russia relations have entered into a new phase to show regard to regional dynamics and new geopolitical equations. Because India stands behind the strategic ties it has developed with Russia at the expense of its relations with the US and its disengagement with the Western World.
India’s independent foreign policy and Russia’s desire for a large market for weapons and oil trade can be evincible for this strategic relation’s main pillar. In spite of this, while ties between the New Delhi-Moscow have beyond its economic relations, arms trade and geopolitical interests, security ties between India and the US are relatively new.
The expansion of bilateral relations despite the Western Bloc has advantages for India as well as disadvantages for Russia. Due to the price-capping mechanism for oil, India has gained strength in energy bargaining. At this stage, it can be said that the balance in Moscow-New Delhi relations has appeared to be tilted in favour of India. But the relations with China have occurred to be the main identifier in the region.
Against the unipolarity of the West, Moscow acts together with Beijing and tries to transmit oil that it cannot sell to Europe to China, the world’s largest oil consumer. In addition, Russia is trying to improve its relations with India, which has disagreements with China.
Against the unipolarity of the West, Moscow acts together with Beijing and tries to transmit the oil that it cannot offload to Europe to China, the world’s largest oil consumer. Furthermore, India, which has a dispute with China, is also trying to improve relations with Russia. Furthermore, Russia is looking at improving its relations with India, which has disputes with China.
The foreign policy of India is circling its border disputes with China and Pakistan. Thus Moscow may have difficulty balancing the Beijing and New Delhi because of the deteriorated relations between these two actors. India, which has confronted a strong China, would not easily abandon its long-standing security relations with Russia. This may require the US to take more initiative to develop a versatile and permanent relationship with India.
From Moscow’s perspective, China is the world’s largest energy consumer. So this is why China is more prominent than India. Besides the Indian market is more competitive by comparative the Chinese one. Therefore, the Chinese-Russian strategic partnership affects relations with India and the US’s influence over India. On this point, it should not be ignored that India is a significant country in the eyes of Moscow in terms of withstanding the rise of China. Russia, with India, is a balancing actor against China’s increasing presence in Central Asia.
Moreover, the US requires India’s partnership in order to gain control over China. For this reason, Washington is attempting to get New Delhi onside to keep Russia on line. However, these attempt seems to obtain no result.
In addition, there is a common discussion point about the US’s attempt to create pressure on India through Pakistan. In this context, Russia has to keep India close to itself to not lose against the US but also built cautious relations with New Delhi in order to not distract itself from China. This can be interpreted as Russia’s fragile-balancing act between India and China.
After all, the relationship between India and Russia is deepening rapidly because of trade concerns, particularly with respect to oil. Therefore, the parties are developing a pragmatic approach as per their interests. However, it should be noted that the background of this includes the great power competition, including Beijing and Washington. It is also known that regional power balances, including the dimension of Afghanistan and Pakistan, affect Russian-Indian relations.
[1] “Russia Becomes India’s Top Oil supplier in October”, The Hindu, https://www.thehindu.com/news/national/russia-becomes-indias-top-oil-supplier-in-october/article66103845.ece, (Date of Accession: 09.11.2022).
[2] “The U.S. Believes India Will Benefit From A Price Cap On Russian Oil”, Oilprice, https://oilprice.com/Latest-Energy-News/World-News/The-US-Believes-India-Will-Benefit-From-A-Price-Cap-On-Russian-Oil.html, (Date of Accession: 09.11.2022).
[3] “India Says Russia Oil Deals Advantageous As Yellen Visits Delhi”, Reuters, https://www.reuters.com/business/energy/buying-russian-oil-is-indias-advantage-foreign-minister-2022-11-08/, (Date of Accession: 09.11.2022).
[4] Ibid.
