- The Russian invasion of Ukraine has gone well beyond twenty days now with no apparent signs of truce being called to stop the massacre. Despite mounting pressure from the international community, the Russian strongman Vladimir Putin continues to stand ground determinedly to achieve what he set about in the first place. Desperate calls from the Ukrainian President to the global community have resulted in the supply of weaponry and cash aids but sanctions imposed on Russia have had a very little tangible effect on the ground though. NATO and the USA’s strong words against the invasion are ineffective as Moscow continues to pummel the hapless Ukrainian cities incessantly inflicting losses on lives and properties.
PC: Joseph McQuade
- Of course, energy requirements are crucial for every economy, and Russia being a major player in the arena is still in action also amply demonstrates how little sanctions and embargos imposed are being played out. Amid this comes reports that India is close to clinching a deal with Russia for buying 3.5 million barrels of its crude at deep discounts dividing the opinions in the West as can be expected. However, the US has crucially indicated that should India go ahead with the purchase, it may not violate American sanctions already in place against Russia. People in the dark should know that, despite the war in Ukraine, European nations after all are continuing to buy energy from Russia unimpeded. Did anyone say doublespeak? Of course, it is.
- Further, the European dependence on Russian energy is also why the US did not go for a complete ban on Russian oil exports and chose instead to just bar Russian energy imports into the US. Note that the EU recently discussed new sanctions against Russian oil majors like Rosneft, Transneft, and Gazprom Neft but clarified it will continue to buy oil from them. As such, nobody has moral grounds to question India in case it goes ahead with the Russian oil deal. Moreover, 3.5 million barrels don’t constitute a big volume for India given its daily consumption of 4.5 million barrels accounting for only 2% of total Indian imports. Thus, the transaction is more symbolic in nature and will serve as a test case for the New Delhi-Moscow trade in the new environment. Interestingly, the payment mechanism for the transaction with a rupee-rouble arrangement is reportedly under consideration.
PC: Bharti
- Since most of the Russian banking system is under sanction, payment would also have to be routed through Indian banks that don’t have any business in Western nations. A raging debate is on to provide impetus to calls for reviewing the dollar as a reserve currency and the primary currency of global trade. As reported, Saudi Arabia is already in active talks with China to price some of its oil sales to the latter in yuan. The present geopolitical play should compel India to look at internationalizing the rupee to firewall future strategic trade from Western sanctions. India should not be compromising its strategic autonomy in trade. In conclusion, our geoeconomics strategy should be commensurate with the global order today keeping the nation’s interest at the forefront.
