[UNPRINCIPLED INDIA] Taking Advantage and Going for the Cheap: Buying Russian Oil

[steveluv]

https://www.washingtonpost.com/world/2022/03/17/india-russia-oil/

As sanctions over Ukraine war mount, Russia turns to India to buy oil and arms
By Gerry Shih
Today at 1:07 p.m. EDT

Indian Prime Minister Narendra Modi greets Russian President Vladimir Putin before a meeting in New Delhi on Dec. 6. (Money Sharma/AFP/Getty Images)

NEW DELHI — When Russia faced international condemnation and sanctions after President Vladimir Putin launched his Feb. 24 invasion of Ukraine, India stayed on the diplomatic sidelines.

Now, as those economic sanctions begin to bite, Moscow is again turning to India.

India, the world’s biggest oil importer behind China and the United States, has agreed to purchase 3 million barrels of Russian oil at a heavy discount, an Indian official said Thursday. The purchase, which was first reported by the Wall Street Journal, is relatively small given Russia’s production and Indian demand. But the volume could increase in the coming months and reinforce a growing perception that India is determined to preserve its extensive trade and military ties with Moscow, even as the United States and its allies urge governments around the world to isolate Russia.

Aside from the oil deal, the Indian government is also exploring ways to maintain trade with Russia by reviving a Cold War-era arrangement called the rupee-ruble trade, according to two other Indian officials with knowledge of the matter. The mechanism, which would be akin to a ledger of trade between the two countries, would let Indian and Russian firms do business while bypassing the need to use U.S. dollars — the predominant currency of international trade — and lowering the risk of potential U.S. sanctions.

The three Indian officials spoke on the condition of anonymity to discuss a sensitive matter. “Eighty-five percent of India’s oil comes from imports, so we always look for good options,” one of the officials said. “If that includes a good package coming from the Russian side, and there’s no bar on buying from Russia, then let’s accept that.”

The Indian officials characterized the ruble-rupee ledgers, which will probably be set up at Russian and Indian banks that are not exposed to the U.S. financial system, as a solution to help the Indian economy and its exporters rather than a way to evade potential U.S. sanctions. India trades with Iran, another country under U.S. sanctions, using a similar rial-rupee trade arrangement.

In recent weeks, India has drawn condemnation from some U.S. lawmakers after it repeatedly abstained from criticizing Russia at the United Nations. But Biden administration officials have often stopped short of criticizing an Asian giant that is seen as a crucial part of its strategy to counter China.

On Tuesday, White House press secretary Jen Psaki told reporters she did not believe that Indian purchases of Russian oil would violate existing U.S. sanctions.

“But also think about where you want to stand when history books are written about this moment,” Psaki added, without explicitly naming India. “Support for the Russian leadership is support for an invasion that obviously is having a devastating impact.”

India’s special relationship with Russia was highlighted this month when the Russian military gave India “special input” about when and to where its stranded citizens should flee the besieged Ukrainian city of Kharkiv, while Russian military officers offered to fly Indians, specifically, out of the war zone.

India is not the only country maintaining trade relations with Russia. Many European countries, including U.S. allies in NATO, continue to purchase Russian energy even though the United States and Britain have announced domestic bans. And India’s oil purchases probably would not amount to a game-changer for Putin’s war effort. Russia’s most important customers are Europe and China; India accounted for about 3 percent of Russia’s exports in 2021 and sources most of its oil from the Persian Gulf, according to S&P Global Commodity Insights.

But the two countries’ cooperation in the energy sector has deepened in recent years. In 2016, Indian Prime Minister Narendra Modi and Putin oversaw a $13 billion deal between Rosneft and a refinery in Modi’s home state of Gujarat that represented India’s largest-ever injection of foreign investment and Russia’s largest-ever outbound deal. Indian energy companies, meanwhile, have invested $16 billion in Siberian oil fields.

An oil refinery in Vadinar village in Gujarat, India. (Sam Panthaky/AFP/Getty Images)

As talk about the oil purchase ramped up last weekend, Russian Deputy Prime Minister Alexander Novak called Indian Oil Minister Hardeep Singh Puri to express Russian interest in “further attracting Indian investment to the Russian oil and gas sector and expanding Russian companies’ sales networks in India,” according to a statement issued by the Kremlin.

Puri said in the Indian Parliament this week that the Modi administration was working hard to keep gas prices low and that he was in talks with “all levels” of the Russian government about a deal. The Indian Oil Ministry has otherwise not publicly commented about the matter.

Many Indian industry executives and observers say it would be unfair for the West to pressure India to quit Russian oil. The European Union said this month it would wean itself off Russian energy “as soon as possible,” but large countries that depend on Russia, such as Germany, have not immediately cut imports.

“Has Europe or any other significant taker of Russian oil and gas reduced its consumption yet?” said Subhash Kumar, the former chairman of the Indian state-owned Oil and Natural Gas Corporation, the country’s largest crude-oil company. If India, which is not involved in the Ukraine conflict, did not buy discounted Russian oil, there would be other takers on the market, he said.

Other prominent commentators have cautioned against proceeding with the purchases, mostly due to its optics. “From a moral standpoint, the decision to buy Russian oil and gas at a discounted rate because of the crisis in Ukraine could be questionable,” Vikram Singh Mehta, the former chief executive of Shell India and former chairman of the Brookings Institution’s India arm, told local media outlets this week.

In the coming months, India’s trade with Russia is likely to continue in another crucial realm besides oil: defense. Largely as a legacy of the Cold War — when the Soviet Union gave India everything from help setting up steel plants to blueprints for MiG fighter jets — around 85 percent of Indian weapons today came from the Soviet Union or Russia, according to a 2021 analysis by the Stimson Center, a nonpartisan think tank in Washington.

Amit Cowshish, a retired Indian defense ministry official who previously oversaw India’s military acquisitions, said the armed forces would be badly crippled within a year if India could not trade with Russia.
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“There’s ammunition, subassemblies, critical licenses, all of which would run out, and it wouldn’t be in the U.S. interest to see an Indo-Pacific partner be crippled or alienated by sanctions,” he said.

So far, Biden administration officials have avoided criticizing India’s continued relationship with Russia. During a House Armed Services Committee hearing last week, lawmakers asked Ely Ratner, the assistant secretary of defense for Indo-Pacific security affairs who has argued for a tougher U.S. posture against Beijing, why India was not siding with the West on the Russian invasion of Ukraine.

“We recognize that India has a complicated history and relationship with Russia,” Ratner responded.

India is trying to diversify away from Russia, but it will take time, Ratner added. “From the U.S. perspective,” he said, “India is an absolutely essential partner as we think about our strategy in the Indo-Pacific.”

Niha Masih and Anant Gupta contributed to this report.

[mersaylee]

Now they love to rup rub each other back…one day they will rup rub each other’s backside…😁

[ToyotaShuttle]

lol unprincipled? then why US and Europe don't straight away apply sanctions on Russian oil/gas? Why have a carve out for Russian gas and oil?

Have a look at this chart and you'll see why some people have no choice but to buy. So easy to talk about principles when you are rich enough and gas prices don't impact you much.

Edited March 18, 2022 by ToyotaShuttle

[1fast1]

12 minutes ago, ToyotaShuttle said:

lol unprincipled? then why US and Europe don't straight away apply sanctions on Russian oil/gas? Why have a carve out for Russian gas and oil?

Have a look at this chart and you'll see why some people have no choice but to buy. So easy to talk about principles when you are rich enough and gas prices don't impact you much.

Wow. I am actually moved to upvote you for the first time. But your pointing out of the hypocrisy of the West is spot-on. 

[Watwheels]

India is the world's third largest importer of oil. And they also subsidize fuel in the country. The large population is power hungry.

 

 

[Lala81]

Don't really think it's unprincipled. 

The countries that can act principled are usually the ones who have oil/gas fields of their own. UK/canada/USA. 

 

[Ender]

INdia not taking sides. so not unprincpled..

[Beregond]

we got PRINCIPLE, so we are very happy with expensive oil. no complain pls😂

[DOBIEMKZ]

Worst comes to worst, do barter trading.

[Thaiyotakamli]

This is called lowballer in carousell

[1fast1]

14 minutes ago, Thaiyotakamli said:

This is called lowballer in carousell

Don't remind me of that place. Easy to be a buyer but if you are a casual seller, really CarouHELL. 😂

[Kia1217]

So are china and  the EU (US ally) ...coz they still buy oil/gas from Russia. In international relations every country actually is unprincipled. National interest rules supreme.

You want to stir shiat? Do it with some common sense! 

Edited March 18, 2022 by Kia1217

[Beregond]

29 minutes ago, mikk123 said:

We look good, but so what? who is paying the price? 😁

This type of report is so unfair to india.

If US or Nato want india to stop buying russia oil. At least they must compensate india the losses for more expensive oil.

[Jamesc]

Russia ask China to help in the war with Ukraine.

If China helps Russia then Russia is indebted to China.

If China attacks the Indian border and China ask Russia for the favour back and stop selling aircraft parts to India.

Then India is screwed.

What India do can also be done back to them.

[Yeshe]

4 hours ago, Turboflat4 said:

Don't remind me of that place. Easy to be a buyer but if you are a casual seller, really CarouHELL. 😂

That's the problem when u sell to @RadX 

[Kb27]

India saw a cheap deal and bought it. What principles ? 

Actually, I don't understand why they need to deal in US$. ?

Russia-India can deal with their own ruble-rupee

Russia-China can deal with their own ruble-rmb

India-China can deal with their own rupee-rmb.

 

 

[1fast1]

29 minutes ago, Kb27 said:

India saw a cheap deal and bought it. What principles ? 

Actually, I don't understand why they need to deal in US$. ?

Russia-India can deal with their own ruble-rupee

Russia-China can deal with their own ruble-rmb

India-China can deal with their own rupee-rmb.

 

 

Oh boy.

That might cause a true World War. Or accelerate one arising. 

I'm definitely no expert but there have been theories that the US is prepared to use military force (overt - by war and covert - by coups) to defend the Petrodollar. 

Venezuela has moved away from the Petrodollar. And that country is not exactly a model for political stability, now, is it? 

I think if there is a multilateral sudden shift away from the Petrodollar either toward the yuan or the ruble, we will all be going to War (and I meant the capital W) again. 

Edited March 18, 2022 by Turboflat4

[Windwaver]

Don't worry, India is still SG's good friend