How much India should trade with Russia must not be guided by Western diktat

Indian Express

2 days ago

Between 2020-21 and 2024-25, India's imports from Russia have soared from $5.5 billion to $63.8 billion, much of it on account of mineral fuels ($2.1 billion to $56.9 billion). Out of the 244.5 million tonnes (mt) of crude petroleum that India imported last fiscal, Russia's share was over 87.5 mt, making it the country's top supplier. It's this trade that US President Donald Trump is now targeting by threatening to levy a 'penalty', on top of the 25 per cent general tariff on Indian goods imports that he announced on Wednesday. By not specifying how much that additional penalty would be, he is basically nudging India to cut down, if not stop, energy (and defence) purchases from Russia. This comes just over two weeks after NATO Secretary General Mark Rutte warned India, China and Brazil of secondary sanctions if they continued to do business with Russia and help sustain its current war spending against Ukraine.
Whatever be the quantum, if at all, of the penalty — a new bill introduced in the US Congress seeks to impose a 500 per cent duty on all goods and services imports from countries 'that knowingly engage in the exchange of Russian-origin uranium and petroleum products' — one thing is certain: The Western sanctions noose is tightening. For India, too, buying Russian oil cannot be business as before. The Narendra Modi government has so far — rightly — not been defensive over massively stepping up sourcing of Russian crude that is available at a discount relative to global benchmark prices. It has cited both the need to prioritise the energy security of India's people as well as the fact that the ban on imports of Russian oil by the US or European Union is not covered under any United Nations sanctions. That argument — about the purchase of this oil being well within India's legitimate and moral rights — still holds.
Pragmatic and matter-of-fact considerations have informed its expanding trade with Russia, even at the risk of Western displeasure, but at the same time, there are geopolitical costs. Those costs could significantly go up, as the EU and US (the Trump administration seems to have closed ranks) increasingly strike at Russia's war machine by targeting its energy revenue streams. That nearly 36 per cent of India's crude imports come from a single country isn't good in the best and safest of times. Prudence demands — and this is important from the standpoint of securing the country's long-term energy security — that costs beyond the immediate also be factored in. That would mean diversifying the sources of oil supply, similar to de-risking trade with China. Whether and how much India should trade with any country must be guided by its own national interest.