It is abundantly clear now that ‘energy taps’ cannot be shut with sudden announcements of sanctions. This is evident from the sanctions announced-imposed by European countries and the United States after Russia sent troops into Ukraine in February this year. The war would soon enter the fifth month but the Russian oil and gas continue to flow into international markets.

Some countries such as China and India may have taken early advantage of discounts offered by Russia and the refiners in these countries purchased oil at high discounts of $20-30 per barrel, in the three months following its invasion of Ukraine. Consequently, Russia earned $24 billion by selling oil to these countries i.e. $18.9 billion from China (crude oil, gas and coal) and $5.1 billion from India (crude oil and gas) which is an extra $13 billion in revenue from both countries compared to the same months in 2021.

However, the margins are fast shrinking and have reduced to $7-8 on delivered basis though still considered cheaper than other “viable alternatives”. Experts warn that “slimmer margins” could “eroded further” due to increase in insurance and transportation costs; and in case “Middle Eastern producers reduce official prices for their crude, then we [India] may have to rethink purchases of Russian oil,”

Russia is an important source of crude for India and New Delhi’s imports have now touched 819,000 barrels per day (bpd). It is useful to mention that Russia is currently the second biggest supplier of crude to India while Iraq continues to be at the top position followed by Saudi Arabia which had earlier stood at number two position.

Since the beginning of the Russia-Ukraine war, India has faced dilemmas particularly for its energy requirements. It is the third biggest oil consumer and importer in the world. New Delhi has successfully maneuvered through this predicament and has consistently held the position that energy security is critical for its growth and therefore has defended its limited choice i.e. “If India stops buying oil from Russia, the entire world will be chasing the same pieces of oil and that will further push up oil prices,”

President Joe Biden has called India’s response to the Russian invasion of Ukraine and its decision to continue buying Russian oil as “somewhat shaky”. New Delhi was quick to respond and Foreign Minister Subrahmanyam Jaishankar questioned and defended India’s decision: “Why are Indian money and funds coming from India seen as funding the war (in Ukraine), when Europe also buys gas from Russia?”… “They (Europe and the U.S.) have squeezed every other source of oil [Iranian and Venezuelan crude] we have and then say you will not go to the market and get the best deal for the people; it’s not a fair approach”.  

At another level, there have been doubts about the impacts of Russian-Ukraine war on India’s military acquisition plans from Russia. This has been put to rest by Indian Navy's Vice Chief, Admiral SN Ghormade who stated that construction of two Talwar-class frigates in Russia continue and “there is no impact of Russia- Ukraine war". Interestingly, India has procured gas turbine engines from Ukraine which are to be fitted on board the Admiral Grigorovich-class guided-missile stealth frigates being made for the Indian Navy by a Russian shipyard as part of $2.5 billion deal.

Another predicament before the Indian government is about the supply of the S-400 missile systems from Russia under a $5-billion deal signed in October 2018. The first squadron of the missile battery was delivered and deployed in 2021 along the Punjab border. The subsequent deliveries may be delayed. Similarly, a deal to set up a factory to produce over 600,000 Kalashnikov AK-203 assault rifles could slow down.

Some media reports suggest that India has begun exploring east European countries who use similar weapons and platforms and can possibly supply spares and ammunitions to the Indian military. This will offer alternative options, avert disruption of supply chains and preclude degrading military readiness against adversaries i.e. China and Pakistan.

Be that as it may, India is the biggest importer of military hardware and according to SIPRI arms transfer data, between 2018 and 2021, it imported $12.4 billion worth of military equipment of which nearly half i.e. $5.51 billion came from Russia. The other major sources for Indian’s military needs are United States, France and Israel. The Indian government has given push to domestic production of military hardware and identified 25.15 billion rupees ($324 million) worth of defence equipment it wants domestic firms to make this year, and avoid buying abroad.

Finally, Russia is a long-time trusted friend and strategic partner and has supported India at the UN and other international platforms including on the issue of Kashmir. It has facilitated India’s entry into the Shanghai Cooperation Organisation (SCO) as an observer and worked together in Afghanistan. There is every reason for New Delhi to exercise strategic autonomy that is in line with its foreign policy choices in which Russia remains an important strategic partner.

Dr Vijay Sakhuja is Consultant Kalinga International Foundation, New Delhi.