Russia has become India’s largest oil supplier
International Business News – According to the French “Le Figaro” report on August 3, since the Ukraine war and Western sanctions, Russia has become India’s largest crude oil supplier. The trade between the two giants has quadrupled in one year.
Weeks after the Ukrainian war broke out, European diplomats in New Delhi had said they hoped India would not help Russia evade sanctions. Five months later, the opposite happened. New Delhi and Moscow began to draw closer on trade. At the current pace, that would allow them to reach their target of $30 billion in trade by 2025 two years ahead of schedule. According to the latest statistics from the Ministry of Commerce of India, in April and May alone, the trade volume of goods between the two countries reached $5 billion, four times that of the same period last year.
Russia, eager to export its hydrocarbon fuel to ease the impact of sanctions and finance its war on Ukraine, has become India’s top oil supplier since June, according to French firm Kepler. Russia’s oil supply to India has surpassed Iraq and Saudi Arabia. In February, Indian groups did not import a single drop of oil from Russia, while Russia shipped them more than 1 million barrels a day last month. This accounts for almost a quarter of India’s oil imports.
Since then, the upward trend has continued until July 25, with India receiving 1.1 million barrels a day, Kepler said. Thanks to Russia, that’s enough to cover 21% of India’s daily consumption, compared to last year’s average of 2%. Data from India’s Commerce Ministry also showed that Russia’s imports of hydrocarbon fuels increased 2.5 times in April and May compared to the same period last year. Apart from oil and coal, India also imports Russian fertilizers and edible oils. New Delhi has denied allegations that it would fuel Putin’s war. Indian Foreign Minister Jaishankar retorted on a June 3 visit to Bratislava, the capital of Slovakia: “If India’s purchase of Russian oil is financing the conflict, then please tell me: it’s really only Indian money and Russian oil exports to India. Is it funding conflict? Isn’t Russia shipping gas to Europe?”
The report said that Europe’s energy policy is diametrically opposed to India’s. While EU countries work to reduce Russian energy purchases, India is increasing its own purchases. India took advantage of the $20 to $30 per barrel discount offered by Moscow to get cheap supplies to curb inflation. In February, the EU imported 63 percent of Russia’s global sales of hydrocarbon fuels. By June, the figure had fallen to 51 percent, the Finnish Energy and Clean Air Research Centre said. Meanwhile, India’s share rose from zero to 4%.
The report also said Indian authorities have no intention of slowing down trade. on July 11, the RBI unveiled a regulatory framework designed to allow companies to trade in Indian rupees with foreign customers. Prior to that, foreign banks had been able to open rupee accounts at a bank in India. Two major Russian banks under EU sanctions, Sberbank of Russia and Bank of Foreign Trade of Russia, each have a branch in New Delhi. The framework set by the RBI now sets the rules for Indian importers and exporters who wish to settle their transactions in Indian currency. The central bank wants to preserve its dwindling dollar reserves due to the appreciation of the dollar. The Indian measure encourages trade with Russia, which is affected by Western sanctions, despite the fact that almost all Russian banks are excluded from the Society for Worldwide Interbank Financial Communications (SWIFT) system, which facilitates the transfer of funds from one country to another.