Amid the reports that India is planning to study the impact of Western sanctions against Russia while devising a payment mechanism to settle its trade with Moscow, sources in the know have said that the country is also planning to buy Russian oil at a discounted rate following the surge in global oil prices after the Ukraine conflict.
Currently, most of the oil imports in India are from West Asian countries like Iraq (23 per cent), Saudi Arabia (18 per cent) and UAE (11 per cent), reported the news agency ANI citing sources. The USA has also now become an important crude oil source for India (7.3 per cent), they added.
In addition to this, the US has clarified that India wouldn’t be violating any US sanctions rules by purchasing Russian oil at a discount but added that such a move would be putting the nation on the "wrong side of history”.
According to sources, imports from the US are likely to increase by nearly 11 per cent in the current year and its market share will be around 8 per cent. Interestingly, India is among the few countries not to condemn Moscow's invasion of Ukraine.
Russia, in the biggest attack on a European state since World War II, invaded Ukraine on February 24 and prompted a barrage of sanctions that have limited Russia's ability to do business in major currencies and impacted several of its state-owned enterprises and banks.
Arindam Bagchi, ministry spokesperson, in a news conference said, ”We will await details of any unilateral sanctions. The exact details to examine their impact on our economic exchanges with Russia,” reported Reuters.
India, which is highly dependent on imports for meeting its energy requirements, gets nearly 85 per cent of its crude oil requirement from imports with around 3 per cent of those purchases arriving from Russia.
The US has banned all Russian energy imports in the wake of the Ukraine conflict. India has called for an end to violence in Ukraine but refrained from outright condemnation of Russia, with which it has long-standing political and security ties.
India’s trade relation with Russia
Russia's exported $6.9 billion worth of goods to India in 2021, mainly mineral oils, fertilisers and rough diamonds, while India's exports totalled $3.33 billion, mainly pharmaceutical products, tea and coffee.
India covers only a fraction of its oil needs with imports from Russia and is exploring trade settlement mechanisms including using Indian currency or rupee-rouble system as Moscow offers crude and other commodities at a discounted rate.
Under pressure from sanctions, many importers have decided to shun trade with Moscow, depressing its crude to record discount levels, which prompted Indian companies to step in.
Indian Oil Corp., the country's top refiner, recently ordered 3 million barrels of Russian oil through a tender while Hindustan Petroleum Corp has booked 2 million barrels for May loading.
(With input from agencies)
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