India has significantly developed its versatile policy since the beginning of the Russia-Ukraine War. In this process, its relations with Russia also drew attention. There is a development in the relations between the two, especially in the energy dimension.
On March 29, 2023, Russia’s largest oil producer Rosneft and India’s largest company Indian Oil Corp signed a futures agreement to significantly increase oil supply and diversify oil grades delivered to India. The company stated that the agreement was signed by Rosneft CEO Igor Sechin during a study trip to India.[1]
It is known that the parties exchanged views on strengthening cooperation in the energy sector, including the possibility of making payments in national currencies. There are other ongoing projects that Rosneft is running in partnership with different Indian companies.[2]
In addition to the increase in cooperation between companies, there has been a significant increase in oil exports between Moscow and New Delhi, which have recently improved their relations. Russia has become one of India’s five largest trading partners.[3] In his statement on March 28, 2023, Deputy Prime Minister of Russia Alexander Novak stated that his country’s oil exports to India increased more than 22 times compared to the previous year.[4]
Before the Russia-Ukraine War, there were strong partnerships in the New Delhi-Moscow relations. It is known that there are deep ties between the parties, especially at the point of military relations. However, it is seen that the cooperation in the energy sector has deepened with the war. Although this situation emerged as a result of Russia’s directing its energy resources to the Asian market in the face of sanctions, it is obvious that there was a rapprochement between the parties. It is possible to say that this closeness and partnership will continue.
In November 2022, Indian Foreign Minister Subrahmanyam Jaishankar also announced that they would continue to buy Russian oil during his visit to Moscow.[5] This trade is economically and strategically advantageous for India.
In addition, India buys oil at discounts of up to 35 dollars per barrel from pre-war prices. Moscow has also proposed payments in rupees using Russia’s messaging system SPFS, making an offer that could make the trade more attractive to New Delhi.[6] However, it seems that no concrete steps have been taken in this regard.
Energy agreements between the parties have been increasing in recent years. However, the energy partnership also has a history. Making attempts to increase its investments in Russia, India acquired 100% shares of Imperial Energy Corporation of Russia, 26% shares of Vankorneft in Northern Russia, and Taas-Yuryakh oil fields in Siberia has bought, respectively, 29.9% in 2016.[7] Also, in September 2019, the parties launched a Vladivostok-Chennai Energy Corridor initiative to increase the energy partnership between the two countries. India has taken such an initiative to reduce its dependence on traditional fuel suppliers.[8]
Nowadays, it can be said that the deepened energy partnership with Moscow is an alternative to reduce dependency on the Gulf countries. As an energy-rich geography, it is considered important to develop cooperation in order not to be caught unprepared in case the Gulf countries use the energy card as a geopolitical tool. Moreover, the recent rapprochement of Gulf Pakistan has attracted attention. It can be said that in the face of the proximity of its regional rival, Pakistan, to the aforementioned countries, India is more oriented towards Russian energy.
Cooperation and partnerships also extend to high-level visits between the two countries. On December 6, 2021, Russian President Vladimir Putin visited New Delhi and the parties held the first 2+2 dialogue. At the same time, an agreement was reached on taking steps to strengthen the Vladivostok-Chennai Energy Corridor.[9] Therefore, these partnerships seem to pave the way for new interactions.
The point reached in energy cooperation and strong military ties based on the past also affect India’s stance on the Russia-Ukraine War. This makes New Delhi one of the most key and influential countries in the war process. Its relations with the Western World and the United States of America (USA), as well as its deepening ties with Russia, transform India into a more effective actor in the international arena.
It can also be evaluated that this position of India paved the way for it to mediate in the Russia-Ukraine War in the future. The fact that the New Delhi administration is holding the term presidency of the G20 and the Shanghai Cooperation Organization has also increased India’s effectiveness in the international arena. Therefore, it will not be surprising that New Delhi uses these cyclical advantages.
Apparently; Russia will continue to be India’s main arms and energy supplier. It can also be said that these factors will continue to play an important role in India’s foreign policy steps. At the same time, the developments also contribute to the increase of New Delhi’s visibility and influence in the international arena.
In summary, India maintains its stance towards conducting an independent foreign policy in the Russia-Ukraine War and tries to use all the advantages offered by the conjuncture. In the atmosphere created by the energy crisis, it has taken the opportunity to consolidate partnerships with Russia. Thus, New Delhi provides resource diversity and aims to get rid of dependencies. India’s investments in the Russian oil and gas sector can also be read in this way. Russia, on the other hand, benefits from its dialogue with India, with which it has partnerships in various fields, as part of its strategy to channel its energy resources to the Asian market. As a result, it is clear that the global energy crisis will bring new breakthroughs in cooperation between the parties.
[1] “Russia’s Rosneft Signs Deal to Boost Oil Supplies to India”, Reuters, https://www.reuters.com/business/energy/russias-rosneft-signs-deal-boost-oil-supplies-india-2023-03-29/, (Date of Accession: 31.03.2023).
[2] “Russia’s Rosneft Signs Deal to Boost Oil Supplies to India”, Economic Times, https://economictimes.indiatimes.com/industry/energy/oil-gas/russias-rosneft-signs-deal-to-boost-oil-supplies-to-india/articleshow/99089218.cms, (Date of Accession: 31.03.2023).
[3] Ibid.
[4] “Russia Says Oil Sales to India Soared 22-fold Last Year”, Al Jazeera, https://www.aljazeera.com/news/2023/3/28/russia-says-oil-sales-to-india-soared-22-fold-last-year, (Date of Accession:: 31.03.2023).
[5] “India to Continue Buying Oil from Russia As Ties Deepen”, Al Jazeera, https://www.aljazeera.com/news/2022/11/8/india-to-continue-buying-oil-from-russia-as-ties-deepen, (Date of Accession: 31.03.2023).
[6] “Russia Remains India’s Most Dependable Energy Partner”, East Asia Forum, https://www.eastasiaforum.org/2023/01/20/russia-remains-indias-most-dependable-energy-partner/, (Date of Accession: 31.03.2023).
[7] “Indian Companies Invest $5 bln in Vankorneft and TAAS-Yuryakh Neftegazodobycha-ONGC”, TASS, https://tass.com/economy/905972?utm_source=google.com&utm_medium=organic&utm_campaign=google.com&utm_referrer=google.com,
[8] “India to Open Russian Energy Corridor to Cut Reliance on Traditional Suppliers”, Times of India, https://timesofindia.indiatimes.com/business/india-business/india-to-open-russian-energy-corridor-to-cut-reliance-on-traditional-suppliers/articleshow/70930463.cms, (Date of Accession: 31.03.2023).
[9] “The India-Russia Strategic Partnership is Key to Indo-Pacific Stability”, East Asia Forum, https://www.eastasiaforum.org/2021/12/27/the-india-russia-strategic-partnership-is-key-to-indo-pacific-stability/#more-545835, (Date of Accession: 31.03.2023).
