India has rightly walked a fine line yet again on the Russia-Ukraine conflict at the United Nations General Assembly (UNGA) as also the UN Security Council where draft resolutions had been moved by both warring sides on Thursday. In the UNGA, the abstention concerned a Ukrainian draft resolution that held Russia responsible for the crisis. In the UNSC, India abstained on a resolution by Russia on the humanitarian crisis in Ukraine. The ongoing conflict has called for precisely such a tightrope walk; meanwhile, immense pressure is being brought upon India from the US and its NATO and Quad allies to change its stance at the UN, stop contracting for Russian crude and support the sanctions regime. Counter manoeuvres from the opposing axis of Russia and China involve a visit to New Delhi by the Chinese Foreign Minister Wang Yi for the first high-level meetings between the two countries since the 2020 Galwan conflict.
There are multiple reasons for New Delhi to persist with its balancing act. The West’s moral posturing against Russia is not very convincing. India’s old strategic ties with Russia as well as the economic opportunities brought upon by the conflict, should not be sacrificed for the sake of someone else’s war. Indo-Russian ties could assume crucial importance in a very fluid geo-political order. What is truly untenable and hypocritical is the West’s insistence that India should stop contracting Russian crude. For one, the EU continues to buy crude and natural gas from Russia. Besides, India’s energy engagement with Russia goes back many years, and cannot be brushed aside. ONGC, Oil India Ltd, Indian Oil Corporation and BPCL have invested in upstream oil and natural gas assets in Russia. Simultaneously, Russian oil major PJSC Rosneft Oil Company owns 49.13 per cent stake in Nayara Energy Ltd (formerly Essar Oil Ltd). It would be unreasonable to expect India, which imports 85 per cent of its crude oil requirements, not to avail of the $20-24 per barrel discount on crude that a sanctions-hit Russia has offered. Another sector that has opened up for India, with western manufacturers quitting Russia, is pharmaceuticals. In West Asia and North Africa, which depend heavily on Russian and Ukrainian wheat imports, supply constraints open up avenues for Indian wheat. India has already set a target of exporting a million tonnes of wheat every month in 2022-23. Similarly, there are opportunities for India’s metal firms with Russia’s steel exports hit by supply constraints.
However, India can hardly afford to alienate the US which is its top trading partner and by far the largest export market. In April-January 2021-22, India’s total trade with the US was worth $96.61 billion of which exports accounted for $62.27 billion. Indian companies and banks have more exposure in the US than either in China or Russia and it can hardly ignore its large student community and investors in our markets and growing tech-driven industry. Foreign Minister S Jaishankar thus wisely shunned hauteur in favour of a balanced approach when he informed Parliament that India’s position on Ukraine is based on national interest. This is the best position under the circumstances.