Now it’s official: Russian Foreign Minister Sergei Lavrov is traveling to India this week to prepare new deals. His plan: he wants to undermine Western sanctions against Russia-India could stab us in the back.
In light of the EU’s announcement that it would bid farewell to Russia’s coal, oil and gas supplies as soon as possible, Moscow is currently looking at specific alternatives in Asia. In addition to India, Indonesia, a G20 country, had already signaled interest in buying Russian oil.
India – after China, the most populous country in the world – is of particular importance to Russia. The world’s largest democracy has not adhered to Western sanctions over Russia’s invasion of Ukraine, but is following a largely neutral course.
Although New Delhi has called for an immediate ceasefire in Ukraine, it has refused to explicitly condemn Moscow’s actions. The government abstained from voting on several UN resolutions on the war.
US President Joe Biden therefore criticized the Indian course as “unstable”. Because at the same time the country belongs to a so-called “quad” group with the US, Japan and Australia because of China’s fears. But as much as it enjoys working together with the US against China, the Indian government is not interested in the conflict in distant Europe.
Now, much to the chagrin of Europeans and Americans, there are indications that India could become one of the beneficiaries of the Western conflict with Russia, thus supporting the government in Moscow.
So far, Russia is India’s main supplier of defense supplies, but the combined annual trade between the two countries is still small. The average has been just $9 billion in recent years, mostly fertilizer and a little oil.
For comparison, India’s bilateral trade with China amounts to more than US$100 billion a year. But given the steep discount on Russian oil since the Ukraine attack, India has already purchased at least 13 million barrels, compared with nearly 16 million barrels imported from Russia all last year.
Now India is also considering doubling its imports of Russian coking coal for steelmaking, India’s steel minister said on Sunday. India also recently signed an agreement to buy 45,000 tonnes of Russian sunflower oil for April – to replace Ukraine’s failing supplies. “India will import more items from Russia in general, especially if there is a discount,” said a senior Indian government official.
The country could provide Russia with much-needed foreign exchange and is setting an example for Russian dictator Vladimir Putin of why he thinks he can resist Western sanctions.
India is also circumventing Western financial sanctions against Russia, which include the exclusion of several Russian banks from the Swift settlement system.
The New Delhi government is now trying to establish a rupee and ruble trading system. Negotiations between the Indian and Russian tax authorities are already underway, said a source familiar with the matter.
This could make progress in decoupling the world’s most populous countries from euro and dollar transactions. The Indian government and the Reserve Bank of India (RBI) did not immediately respond to requests for comment.