Indo-Russian bilateral relations: Striking a delicate balance

Even as many parts of the western world denounce Russia's invasion of Ukraine, India has maintained its distance from this outcry. It even refrained from voting on a UN resolution to this effect. 

India's oil challenge

There is good reason for this. India's oil consumption is massive, which should come as no surprise considering that it is a heavily populated, fast emerging economy. As per a recent BBC report, it is the third largest global oil consumer, after the US and China, which incidentally are also the two biggest economies in the world today. 

But here's India's problem. It has always been an oil importer, and this one commodity has been its Achilles heel for a long time. In fact, the story of India's transformation into a globalised economy, has its seeds in the oil shock of 1990 following the Gulf War that saw Iraq invading Kuwait. 

A balance of payments crisis ensued and India wound up indebted to the IMF. It was then that it undertook a structural transformation that allowed for far more relaxed trade and investments. The rest is history. 

Creating greater energy security

But there is as much opening up that an economy can do. Sure, the country has come a long way in the last 31 years, but oil imports are still a quarter of the total. And in the past fiscal year, India's deficit has widened, partly as oil prices have risen, already. In fact, the economy's oil imports have shown the fastest growth among all major commodities in 2021-22. So while it is not in crisis, continued oil price increases could make significantly increase its deficit. 

Right now, India's oil imports from Russia a small 2% of its total, with Iraq being the biggest provider (see graphic). But this could change, especially if India is able to secure Russian oil at a discount as news reports indicate. It is a tactical move, which could provide greater energy security for a country that needs it. 

Russia v/s the West and the big moral question

In any case, India's positive relationship with Russia goes back a long time to when as the biggest part of the USSR it was a big ally. At the same time, in the post-1991 era, the big western democracies have also been very beneficial to India. Key among their contributions is facilitating rapid economic growth. And today, are among its biggest trade and investment partners. 

So, India does need to maintain the delicate balance between securing its best interests and also ensuring continued productive relations with countries like the US, for instance. And last, but certainly not the least, there is the moral question of inadvertently supporting war. A question also faced by all other countries, including those denouncing it, who find themselves dependent on Russia's oil and gas anyway. There are no easy answers.