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Targeting India for buying Russian oil smacks of hypocrisy

DW Nachrichten TV | Ashutosch Pandey
Ashutosh Pandey
March 22, 2022

The US has been lecturing India on its place in history for undermining global efforts to corner Moscow, but New Delhi is simply keeping its self-interest at the fore — much like the West, says Ashutosh Pandey.

https://p.dw.com/p/48qFZ
An Indian Oil gas station attendant fuels a vehicle in Kolkata
State-owned Indian Oil has bought 3 million barrels of Russian oil, which is currently selling at a major discountImage: Indranil Aditya/NurPhoto/picture alliance

When asked about India's plans to buy discounted oil from Russia, White House Press Secretary Jen Psaki said last week it wouldn't amount to a violation of Western sanctions against Moscow but New Delhi should know that history wouldn't be kind to it for undermining efforts to isolate Moscow with sanctions.

"Think about where you want to stand when history books are written at this moment in time. Support for the Russian leadership is support for an invasion that obviously is having a devastating impact," Psaki said.

US President Joe Biden followed up by saying that India was being "somewhat shaky" in acting against Russia over the Ukrainian war.

As it turns out, India has more pressing concerns than worrying about its place in Western history books. Indian state-owned oil companies have ordered 5 million barrels of heavily discounted oil from Russia and don't seem averse to buying more.

Buying oil on the cheap is not a luxury but a necessity for India, which imports 85% of its oil needs. The heavy reliance on imported fuel means that when crude oil prices go up — as they have now —  India's finances come under extreme stress and budget estimates go for a toss.

The Indian economy could be in for a major shock if crude oil remains above $80 (€72.50) a barrel for months, stoking inflation and hurting recovery at a time when pandemic scars remain wide open.

With benchmark Brent crude oil hovering at over $110 a barrel, these are already difficult times for the Indian economy. New Delhi is only being prudent by looking for cheaper alternatives and one of them happens to be Russian oil, which is selling at a $20-$25 discount.

Ashutosh Pandey
DW business editor Ashutosh PandeyImage: DW

Following European, US footsteps

India is putting its self-interest at the fore very much like the European Union, which continues to buy oil and gas from Russia; or the United States, which has refrained from banning Russian uranium imports for its nuclear plants, or Washington's Middle Eastern ally Saudi Arabia, which is busy filling up its coffers with US dollars and doesn't seem to be in any rush to pump in more oil to help steer prices lower.

The 27-member EU bloc, which relies heavily on Russia for its energy needs, has so far pushed back against an embargo on oil and gas — Moscow's cash cow — arguing the ban would leave its citizens freezing in winter and tens of thousands of them jobless as high energy prices force energy-intensive industries like aluminum production to shut shop.

Unlike EU governments, which are looking to take on a lot of the burden of higher energy prices including by absurdly discounting gasoline at filling stations to help motorists, a pandemic-bruised India doesn't have much of a financial wiggle room to foot higher energy bills for long. So, it's doing what's within its control: scout for cheap oil.

It should be noted here that despite recent crude purchases, Russia remains a marginal player in the Indian market, accounting for less than 1% of India's oil imports. This means that even if Indian oil imports are indirectly funding Moscow's war machine, the amount is only a fraction of the billions the EU continues to dole out for Russian oil and gas.

Unilateral sanctions

India finds itself in a difficult predicament, stuck between a traditional ally in the form of Moscow with which it shares long-standing political and security ties and the United States with which it has nurtured strong ties in recent years.

New Delhi, which relies heavily on Russian arms and ammunition amid tensions with neighbors China and Pakistan, has abstained from voting against Russia at the United Nations.

While India should be criticized for refusing to condemn Russia's invasion of Ukraine, calling it out for buying Russian oil seems misplaced and hypocritical.

If anything, it's the manner in which sanctions are adopted unilaterally by the world's richest and most powerful countries that should be called out.

For far too long, Western countries, led by the US, have slapped sanctions on governments without consulting their economically weaker allies or studying their impact on other countries. The West must come up with ways to reduce the burden of sanctions on others to ensure they have an incentive to tag along.

Otherwise, sanctions in support of one country make less sense if they lead to hardships elsewhere, as we are seeing in Egypt, where people are struggling to put bread on their plates; or India, where exporters are waiting for over $500 million in payments from Russian clients unable to use the SWIFT payments system.

Edited by: Hardy Graupner

Zelenskyy: 'Without trade with you, Russia will not have money for this war'

DW Nachrichten TV | Ashutosch Pandey
Ashutosh Pandey Business editor with a focus on international trade, financial markets and the energy sector.@ashutoshpande85
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