India buys 3m barrels of Russian oil despite international pressure

INDIA has purchased three million barrels of oil from Moscow despite growing international pressure to cease relations with Vladimir Putin.

Fumio Kishida, Japan’s prime minister, arrived in India yesterday for bilateral talks with Narendra Modi in which he will urge their countries to show a united front against Russia following Western sanctions.

“Since the Russian invasion of Ukraine coincides with this trip, I’d like to emphasise the importance of international unity and confirm that Japan and India will work together on various issues,” Kishida said ahead of his first visit to New Delhi since he was sworn into office last year.

It comes as India’s state-run oil company, Indian Oil Corporation, last week purchased three million barrels of Russian crude at a discounted cost – understood to be 20 per cent – much below the global benchmark price.

Surging oil prices pose a huge burden for India which imports 85 per cent of the oil it consumes , with demand projected to jump 8.2 per cent to 5.15 million barrels per day this year.

If oil remains above $70 a barrel, the rupee could collapse causing inflation to skyrocket, triggering a crisis.

But amid growing pressure to resist dealing with Moscow, India has refused to support any economic penalties.

Workarounds have even been explored to allow the purchase of oil and fertilisers at a cheaper price from Moscow, prompting questions from Western countries.

Talks remain ongoing on an alternative rupee-rouble trade arrangement that would enable exports to arrive from Russia despite sanctions restricting international payment mechanisms.

Last Tuesday, White House press secretary Jen Psaki, when asked about India’s purchase of Russian crude, said the US message to “any country” is to “think about where you want to stand when the history books are written”.

But the oil deal illustrates how the war has created a complicated geopolitical balancing act for the US.

As Joe Biden tries to rally countries to oppose Russia’s invasion, India is viewed as a key US partner to help counter China’s rising influence in Asia.

Notably, the US overlooked India’s accidental firing of a supersonic missile into Pakistan last week and has not issued a direct challenge over the country’s relationship with Moscow. India alone has refused to condemn Russia, its key arms supplier. Nearly 70 per cent of its military arsenal is Russian-made.

India has also abstained from voting at the United Nations against Russia’s aggression of Ukraine amid fears Moscow could shift allegiances towards Pakistan or become beholden to China.

“India sees Russia as a reliable partner over the years. Also it has been careful to maintain a productive relationship with Moscow to prevent Russia from slipping more into China’s orbit,” said Asia security expert Arzan Tarapore.

Tensions between New Delhi and Beijing have been high since a 2020 clash on their disputed border. Multiple rounds of talks have failed to de-escalate tensions and both sides have sent additional military hardware – in India’s case much of it Russian-made – and thousands of extra soldiers.

“India will have much greater difficulty buying Russian arms, because of the sanctions,” said Mr Tarapore.

“And Russia will definitely grow more dependent on China because of them. So the war is clearly a point of inflection for India’s relations with Russia, [which] will probably be completely reordered,” he said.