Russian oil for Indian solidarity

Russia, an enemy? Not in India, where Russia has long been viewed as a valued political and economic partner. Since Russia's full-scale invasion of Ukraine last year, the relationship has even picked up additional pace. India has declined to join the West's sanctions on Moscow, and the country is now importing more crude oil from Russia than ever before. This was one of the driving factors behind the recent official visit to India of German Chancellor Olaf Scholz.

According to the Indian Ministry of Commerce and Industry, Russia has become India's fourth-largest source of imports in the past year. From April to December 2022, imports totaled $32.8 billion (€30.08 billion), up from $6.58 billion in the same period of 2021.

India has bought "a lot of crude, converted it into refined petroleum products and sold it," Indian Commerce Secretary Sunil Barthwal told the Nikkei Asia news outlet.

Buying oil 'for the best possible price'

"I would like to clarify we do not ask our companies to buy Russian oil," Indian Foreign Minister Subrahmanyam Jaishankar told parliament in December. "We ask our companies to buy oil [that] is the best option that they can get. Now, it depends on what the market throws up."

As part of global sanctions on Russia, a new price cap has been put on Russian crude oil that came into force on February 5, 2023. For India, the third biggest consumer of oil in the world, this reduction makes a huge difference.

This brings multiple benefits for the government. Because India imports more than 80% of its crude oil, the cap means it can lower energy costs. Furthermore, by turning to Russian oil, India can decrease its dependence on the Middle East, which used to be the source of some 60% of the country's oil imports.

Arms deals during the Cold War

The economic and political relationship between Russia and India, which are both nuclear powers, is not only based on their mutual interest regarding oil. It also goes back to their long-standing cooperation during the Cold War era.

The Soviet Union supplied weapons to India for decades and trained Indian forces in how to use them. India obtained three-fifths of its arms from the USSR between 1955 and 1991, analysis by the Stockholm International Peace Research Institute (SIPRI) shows.

According to Air University, an establishment in the US state of Alabama that provides military education for the US Air Force, military cooperation between India and Russia remains significant.

"The breadth of Russian-origin platforms in the Indian military ... have created a 'lock-in' effect, while the depth of relative support to India’s technology base and strategic systems have engendered a relatively high degree of indebtedness and trust in key strategic circles," wrote the authors of a 2021 article for the Journal of Indo-Pacific Affairs.

They added that the "quantity and sensitivity of Russian contributions to the Indian arsenal" had been largely "underappreciated."

By contrast, there was a cooler relationship with the United States, which delivered arms to India's enemy Pakistan.

Furthermore, for a long time, Soviet-type economic planning served as a model for the Indian economy, as it transitioned from colonialism and sought to fight poverty. After the collapse of the Soviet Union, India introduced reforms and opened up its economy to the world.

Rapprochement to the US

In 2005, under the presidency of George W. Bush, US representatives spoke of India as a "natural ally" with "shared values," which would become "a major world power in the 21st century" with US support. It is this aspiration to be a leading global player that explains why India has continued to cooperate with Russia, as part of various institutions, such as the Shanghai Cooperation Organization (SCO), the BRICS bloc (made up of Brazil, Russia, India, China, South Africa) and the Russia-India-China (RIC) grouping, despite its new partnership with the US.

No sanctions and nonalignment

"The Russian-Indian partnership will continue," Rajan Menon and Eugene Rumer from the US think tank Carnegie Endowment for International Peace wrote in September last year. "For India, Russia remains an important supplier of weapons. … India has not joined the West's sanctions on Russia. By doing so, it has demonstrated its independent foreign policy," they concluded.

"Enhancing trade and economic cooperation between India and Russia is a key priority for the political leadership of both the countries," the Indian Embassy in Moscow states in a 2022 briefing on India-Russia economic relations.

However, it is also partly the case that before the surge of oil imports from Russia, economic cooperation between the two countries had been stagnating at a rather low level, with Russia only rarely making it into the top 25 of India's trading partners between 2012 and 2021.

Germany, by comparison, ranked sixth in 2012, but slide down to 11th position in 2021.