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OpinionsImports of Russian Oil have given big cushion to India in reducing...

Imports of Russian Oil have given big cushion to India in reducing fiscal gap

Date:

By Subrata Majumder

Given 's stance as neutral and non-party to sanctions on Russia in the wake of the Ukraine war, global critics raised eyebrows over India as protagonist for non-alignment movement and suspicion as strong supporter to the sovereignty of a nation. It demonstrated that India's long standing original foreign policy was tampered in a great deal to keep pace with global political dynamism and inched towards need based partnership policy.

Eventually, India's relation with Russia, which subsided after the collapse of Soviet Union, revived with a vigour. This raised eyebrows of Narendra Modi's “bromance” with authoritarian leaders, like Putin, former President Donald Trump and others like Prime Minister of Israel Benjamin Netanyahu.

Historically, India's strong relation with Russia developed with Russia's overwhelming support and containing USA and China in the events of frequent razes by Pakistan and likeminded western nations, despite being besieged by two opposite political systems.

In 1961, India's takeover of Goa, Daman and Diu from Portugal by military power was supported by the Soviet Union, against severe criticisms by the USA, UK, France and Turkey. These nations were up in arms against India's bringing back its own territory from the foreign occupation.

In 1971, India signed with the Soviet Union “The Treaty of Peace, Friendship and Cooperation”. This worked more than the face value of the agreement for strategic partnership. It proved the legacy of Soviet Union support, when it resisted the American warship “Seventh Fleet” in Bay of Bengal, to support Pakistan in the wake of Bangladesh liberation. .India was able to defeat Pakistan and helped in creating Bangladesh.

Soviet Union and later after 1991, the break away Russia's unrelenting support to India's stance on issue attached a political significance to counter the West. In 1955, Soviet Union declared an open support to Kashmir sovereignty, undermining Pakistan's claim. The then Soviet leader Nikita Khrushchev said “We are so near that if you even call us from mountain tops, we will appear at your side”.

Three times the Soviet Union vetoed the UN Council of Resolution (1957,1962 and 1971), which called for intervention in the Jammu & Kashmir issue, insisting that it was a bilateral issue between India and Pakistan.

Even though the collapse of Soviet Union loosened the relation between the two countries, the signing of Russian President Vladimir Putin and the then Indian Prime Minister Atal Behari Vajpayee's “Declaration of Strategic Partnership” in 2000, reinvigorated a new spirit for an uptick in the relation between the two countries. A decade later in 2010, both the governments opted for close partnership, when the declaration of strategic partnership took into a shape for “Special and Strategic Partnership”, thereby affirming Russia's pro-India stance.

Former Prime Minister Manmohan Singh greeted President Putin in his visit to India in 2012, “President Putin is a valued friend of India and the original architect of India-Russia partnership”.

The crucial part of the legacy of India -Russia relation is India's support in the current war in Ukraine and India abstaining from voting against Russia in the UN General Assembly as well as in the UN Security Council.

Even though earlier deepened political and economic relations between India and Russia waned after the collapse of Soviet Union, the relations remain robust. Between 2016 to 2022, Russia accounted for approximately 45 percent of Indian military hardware imports, according to Stockholm International Peace Research Institute.

The buoyancy in trade between India and Russia after the Ukraine war and sanctions revived economic relations between the two countries. Russia emerged the 5th largest trading partner of India in 2022-23. Total trade increased by 468 percent in 2022-23. From a mere 0.8 percent share in India's global trade in 2021-22, trade with Russia spurred to 4.2 percent in 2022-2023. The trigger in the buoyancy in trade was mainly due to large imports of crude oil. It accounted for 74.1 percent of total Indian import from Russia. .

Oil import from Russia leaped ten times, despite the sanction. It increased from 4.3 million tonnes in 2021-23 to 50.8 million tonnes in 2022-23. It accounted for 21.5 percent of total import of crude oil, from a mere 2 percent in 2021-22. The big advantage of the crude oil import from Russia was the discounted price offered to India. According to an official statement by the Indian Minister, India saved US $ 3.6 billion in import of oil from Russia.

The crux of the revival of the trade relation with Russia is that even though India witnessed a big trade imbalance with Russia, compared to favourable trade balance with Soviet Union before the collapse in 1991, the surge in imports attached a great significance amidst the global uncertainty in oil prices. Repeated OPEC threat for a cut in production triggered oil price vulnerability. India was importing nearly 70 percent of crude oil from OPEC before the sanction.

Oil is the second biggest energy in India. It accounts for nearly one-third of the total energy in the country. The crucial issue of energy basket is that while other energies, coal, hydro, nuclear are domestically available, more than 90 percent of oil energy is imported. Given these, Russian crude, with discounted prices, proved crucial for sustaining India's growth.

(IPA Service)

 

 

 

Northlines
Northlines
The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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