The West Botched Up Russia ... And Now Wants India To Foot The Bill

NDTV

21 hours ago

Both the US and the EU seek to offload onto our backs some of their continuing failures in dealing with Russia. They have imposed a series of draconian sanctions on Russia for intervening militarily in Ukraine, but these have not caused the economic collapse of the country as they thought it would.
The objective of the US and the EU has been to deprive Russia of financial resources to continue its military operations in Ukraine, given that the export of oil and gas is Russia's main source of state revenue. In 2022, the Nord Stream pipeline was blown up to break the expanding energy link between Russia and Europe.
Double Standards
The EU has since 2022 progressively reduced the purchase of Russian oil and gas in line with its decision to end its energy dependence on the country. The goal is to end all such purchases, though oil, gas and, especially, refined products, continue to flow to Europe from Russia. This has, of course, opened up Europe to the charge of double standards when they exhort other countries to end oil and gas trade with Russia.
To avoid a steep rise in oil prices that would damage the global economy and raise the prices at the pump also for Western consumers, a 'via media' of a price cap of $60 per barrel was put on Russian crude oil on December 5, 2022. On February 5, 2023, this was extended to refined petroleum products. The aim was to prevent an oil price shock as well as to put a squeeze on Russia's oil earnings. This cap also prohibited participating countries from providing shipping, insurance, and other services for Russian oil sold above this price, as also prevent Russia from chartering or insuring oil tankers unless they complied with these limits. As it happens, 90% of shipping insurers are Western. All these measures were intended to force countries to buy Russian crude, etc., only at that capped price if they wanted to avoid reprisals.
Russia's Shadow Fleets
Russia has tried to circumvent these sanctions on shipping by creating a so-called "shadow fleet" of oil tankers, numbering anything from 400 to 1,400, to ply its oil trade with non-Western countries. This fleet is now being targeted by the EU and the UK. There is, of course, no legal basis for these restrictions.
India had come under pressure in 2022 itself to condemn Russia and end oil trade with it. We were being accused of helping finance Russia's war against Ukraine. We were told that we should take a moral position and be on the right side of history. This was total hypocrisy from our point of view, as the history that we have experienced was marked by centuries of colonial depredations and decades of Western sanctions because of our refusal to sign the Non-Proliferation Treaty and accept international control over our nuclear and missile programmes.
India's Interests In Russia
India has invested heavily in Russia's oil sector. In fact, the biggest investment India has made in the hydrocarbon sector abroad has been in Russia. As of October 2023, India's investments in Russia were estimated to be USD 16 billion. In turn, Russian oil producer Rosneft gained access to India's fuel retail market when it completed a USD 12.9 billion deal to acquire private refiner Essar Oil in 2017. Rosneft announced in May this year that India was a "strategic partner", and that it was cooperating with Indian companies in "production, oil refining and trading of oil and petroleum products".
India began importing large volumes of Russian oil after its military operation against Ukraine in February 2022, which attracted massive Western oil sanctions, which compelled it to explore other markets. India, the world's third-largest oil-consuming and -importing nation, saw an opportunity to obtain oil at discounted prices that Russia was offering.
India's position has been very clear and firm from the beginning, viz., that India is hugely dependent on imported energy, that the price of oil plays a vital role in its economy, that its primary responsibility is towards its own people, and that in accordance with its national interest it would buy oil from the cheapest available source.
New Delhi Has Done Nothing Illegal
India does not recognise the legal validity of sanctions unless they are approved by the UN. In any case, in buying Russian oil, India has not violated any lawful sanctions. It has also bought Russian oil below the price cap imposed by the West. It is true that before February 2022, only 2% of its oil imports came from Russia. Since then, Russia has become India's biggest oil supplier, with 40% of our supplies coming from that country. India has saved billions in buying discounted Russian oil, saving over USD 25 billion in FY24 alone. India's total trade with Russia stands at $65.69 billion, largely accounted for by the oil trade.
The West has grudgingly recognised its inability to persuade India not to buy Russian oil. However, anti-Russian Western lobbies have not given up their quest to apply pressure on India, seeing that the West's goal of imposing a strategic defeat on Russia has proved illusory. To the contrary, a strategic victory of Russia in Ukraine seems to be on the cards. With no new options available, these lobbies continue to rely on the failed instrument of imposing even more sanctions on Russia. Their frustration leads them to target the biggest buyers of Russian oil.
The West's Arrogance
Diehard US senators like Lindsey Graham and Max Blumenthal, who are pathologically anti-Russian, are moving legislation (S.1241 - Sanctioning Russia Act of 2025) to impose 500% tariffs on all goods and services imported into the United States from countries that knowingly engage in the exchange of Russian-origin uranium and petroleum products. They have singled out India, China and Brazil by naming them in their public statements. Lindsey Graham claims that he has worked with Trump to highlight the merits of this legislation, pointing out to him that the proposed legislation carries a waiver clause that would allow the US president discretion in the application of these tariffs.
Even conceiving of such a move reflects the arrogance of power and a sense of impunity that marks the thinking of some elements in America's political class. It also shows a void in geopolitical thinking. This move has come when Trump is negotiating a trade deal with China. The two have reached an interim agreement that involves US concessions in the face of China's readiness to deny the US access to some critical materials, etc. In such a situation, the threat to apply 500% tariffs on China if it buys Russian oil confounds common sense, especially as China is connected with oil and gas pipelines to Russia.
Political Myopia
Similarly, India and the US are negotiating an interim trade deal, pending a multi-sectoral trade agreement to be negotiated by autumn this year, when the Quad summit is scheduled in Delhi and which Trump is expected to attend. Trump seems to be following the India-US trade negotiations as he has been publicly alluding to their progress. In the joint statement issued at the end of Modi's visit to the US in February this year, the goal of expanding bilateral trade to USD 500 billion by 2030 is envisaged. In that perspective, to lose sight of the larger US-India relationship and threaten New Delhi with 500% tariffs on a peripheral issue of India-Russia oil trade shows remarkable political vacuousness.
India has reacted cautiously to the Graham-Blumenthal initiative, stating that we have not ignored it and that our ambassador in Washington is in touch with the senators to provide a briefing on India's energy needs, etc. India has levers to use against Graham and Blumenthal, as the Air India Boeing 787 that crashed and the 20 new 787s ordered by Air India are manufactured in Graham's home state of South Carolina; Connecticut, which is the home state of Blumenthal, has a large number of Indian students. One hopes that the India-American community in the US is being galvanised to put some pressure on these two senators.
NATO's Inexplicable Entry
Trump also waded into the matter in mid-July by announcing that he was giving Putin 50 days to enter into peace talks with Ukraine or face what he called "secondary tariffs" of 100% as well as secondary sanctions on countries that buy Russian oil. Rather surprisingly, NATO Secretary General Rutte has backed this threat and has warned India to heed this warning of secondary sanctions. NATO has no locus standi in the matter, and Rutte's remarks seem to suggest, most objectionably, that NATO's remit covers India too.
India has rejected Rutte's remarks by stating that securing the energy needs of our people is our overriding priority and that we are guided by the market and prevailing global circumstances. We have warned against double standards, having in mind that Europe is still buying oil and gas from Russia. Turkey, for example, is a major buyer. So, is the NATO Secretary General threatening implicitly US sanctions on a NATO member?
EU Has Something To Say, Too
The EU has also taken the highly retrograde step of imposing in its 18th round of sanctions on Russia, as well as sanctions on Nayara, an Indian refinery which is a major buyer of Russian oil and which is majority-owned by Russian entities, including oil major Rosneft. The new measures include asset freezes, limits on financial and shipping services, and bans on importing petroleum products that are refined from Russian oil, even if processed in third countries such as India.
India has slammed the latest EU sanctions, stating that it does not subscribe to any unilateral sanctions measures, that we remain fully committed to our legal obligations, and that we consider the provision of energy security to meet the basic needs of our people of paramount importance. India has reminded the EU that there should be no double standards when it comes to energy trade.
All this points to how terribly the West has mismanaged the Ukraine conflict and continues to do so. India must steer its strategic course astutely as the US under Trump is causing huge disruptions and Europe is increasingly in disarray. Our relationship with both the US and Europe as well as with Russia is most important, and hence the challenge ahead.
(Kanwal Sibal was Foreign Secretary and Ambassador to Turkey, Egypt, France and Russia, and Deputy Chief Of Mission in Washington.)
Disclaimer: These are the personal opinions of the author