India to Bolster Economic Ties with Russia

India will expand economic ties with Russia and continue to buy oil from Moscow, India’s foreign minister said, pointing out that imports of discounted crude from Moscow have worked to its advantage.

Foreign Minister Subrahmanyam Jaishankar said during a visit to Moscow that as the world’s third-largest consumer of oil, it is “our fundamental obligation” to ensure that Indian consumers have the “best possible access on the most advantageous terms to international markets.”

He made his comments after a meeting with his Russian counterpart Sergey Lavrov on Tuesday.

In his first visit to Russia since the Ukrainian conflict erupted, the Indian minister reaffirmed New Delhi’s longstanding ties with Moscow calling it an “exceptionally steady” and “time-tested relationship.”

“Any objective evaluation of our relationship over many decades would confirm that it has actually served both our countries very, very well,” Jaishankar told reporters in response to a question about pressure from Western countries to reduce oil imports and join a plan by the Group of Seven countries to impose a price cap on Russian oil.

The Indian foreign minister visited Moscow days before a scheduled visit by U.S. Treasury Secretary Janet Yellen to India for talks that are likely to include the price cap proposal.

In an interview with the Press Trust of India in Washington, Yellen said India could benefit from a Western price cap.

“We want Russian oil to continue to supply global markets, stay on the market. But we want to make sure that Russia doesn’t profit unduly from the war by enjoying prices that are essentially very high due to the war,” Yellen told PTI on Monday.

Under the price cap plan that is expected to be in place in early December, European companies will be allowed to transport and insure shipments of Russian crude as long as it is sold below a fixed price that has yet to be determined by the G-7 nations. The plan aims at further deflating prices of Russian oil.

“Our objective is to hold down the price that Russia receives for its oil and keep that oil trading. The gainers from this will be particularly those countries that do buy cheap Russian oil, and our hope would be that India would take advantage of this price cap, though its firms are bargaining with Russia,” Yellen said.

Yellen will be in India on Friday to co-chair a dialogue (U.S.-India Economic and Financial Partnership) along with her Indian counterpart, Nirmala Sitharaman.

India has not directly commented on the price cap plan — Petroleum and Natural Gas Minister Hardeep Puri said last month that “we will have a look at it.”

India and China have become the biggest buyers of Russian oil since the Ukraine conflict. In October, Moscow was the largest supplier to India, surpassing traditional suppliers Iraq and Saudi Arabia as oil imports from Russia increased exponentially from about 1% before the Ukraine invasion to about 20%.

The surging oil imports have led to a huge jump in bilateral trade between the two countries.

During his Moscow visit, Jaishankar also said that India “strongly advocates” a return to dialogue and diplomacy to resolve the conflict and said that New Delhi was ready to support any initiative to, as he termed it, “de-risk” the global economy.

Jaishankar’s trip came amid speculation that India could be a potential negotiator in efforts to end the conflict.

New Delhi has not explicitly condemned Russia for the Ukraine invasion and abstained from United Nations resolutions critical of Moscow’s aggression, but it has repeatedly said that it opposes the conflict.
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