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Economy

India's Deal For Cheap Russian Oil Is Strategically Dubious And Morally Bankrupt

While the strategic issues are still being debated, the Indian government has dismissed the moral issue by concluding a cheap oil agreement with Russia. But are Indian consumers prepared to accept the true cost of discount Russian oil?

Photo of a man at a gas station in Ghaziabad, India.

At a gas station in Ghaziabad, India.

Radha Kumar*

-OpEd-

NEW DELHI — The Indian government’s decision to buy discounted crude oil from Russia, when the Vladimir Putin administration is bombing civilians in Ukraine, is questionable on many counts. Contrary to the Narendra Modi administration’s plea that the issue should not be politicized, the decision in the existing situation is as much political as it is economic, however much we may wish it were not.

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The U.S., European countries, Japan and Australia have made no secret of their desire that India join them in condemning Putin’s war, as the 141 country governments that voted in favor of the UN General Assembly resolution did. Russia has offered discounted oil to show that India is among the "many" countries — actually a dozen at best — that resist the Atlantic alliance’s attempt to isolate and punish Putin.

Xi’s China has suddenly discovered that Modi’s India is worth talking to: it will provide cover for the Xi administration to not only deflect attention from its own support for Russia, but to position itself as more willing to engage with the Atlantic alliance than India.


In such a context, the decision to buy oil from Russia has clear political and economic ramifications that will affect India for at least a decade, if not more. So the first question is, why did the Modi administration arrive at such a decision without consulting opposition parties or parliament, or putting the issue in the public domain to elicit responses? Surely the joint parliamentary committee on external affairs should have been the first point of reference, followed by an all-party meeting?

Questions for Modi's administration

Perhaps the Modi administration concluded that the Ministry of External Affairs (MEA) briefing of the committee on March 3 yielded a sufficient endorsement of its policy. After all, the decision to buy crude oil is merely another step in that policy.

From what little appeared in the news on that briefing, it appears that the focus was on evacuation of Indian students, though India’s silence on Russia’s invasion was also discussed. Apparently, the parliamentarians present all agreed that India was "between a rock and a hard place," in diplomat Shashi Tharoor’s words, and the only option was to call for a cessation of hostilities and a return to "dialogue and diplomacy." The Modi administration has, since then, stuck to that position, which could be seen as a shift from India’s previous silence.

The deal lets Putin claim he is not isolated

If that is the case, then what is the Modi administration doing to support dialogue and diplomacy? Peace negotiations have been on under Turkish auspices for some time now. Is India supporting them in any substantive way? Has the prime minister spoken to President Erdogan to offer any aid for the talks that might be useful? While Indian and Russian companies were negotiating the purchase of oil, did the prime minister convey to Putin that a ceasefire was imperative to give peace negotiations a better chance of success? Have we continued to push for humanitarian corridors as the bombing of civilian areas in Ukraine grows more acute?

These are questions that the parliamentarians on the joint committee are well-placed to ask the Modi administration. I do not know if they have done so yet, but if not I do hope that they will. The announcement of oil purchases is surely the moment to do so.

The buy is unlikely to have any impact on peace negotiations, nor is it likely to ease Putin’s economic predicament in any significant way given that several European countries are also buyers. But it does give the Putin administration’s claim that it is not isolated a talking point in perception wars, at a time when negotiations are delicately poised and the war on Ukraine continues.

Foreign policy has traditionally been insulated from political party rivalries for good reason. Yet the purpose of its insulation — to show consensus on issues of national interest — is defeated if consensus simply means endorsing the government position. During the years of former Indian prime minister Jawaharlal Nehru's administration, critical foreign policy choices were debated at length in parliament and the media, but over time the practice withered. For many decades now, foreign policy has been made chiefly in the prime minister’s office, with inputs from the Ministry of External Affairs.

Photo of an Indian Oil petrol station in Rangpo

Indian Oil petrol station in Rangpo

Wikimedia Commons

Morality matters

At a time when so many in our country are soul-searching over the nature of our democracy, and our people have begun to globalize educationally as well as in other ways — travel, for example — the line between external and internal affairs is tenuous at best. The founders of our republic knew well that the strength of our democracy also drew from the strength of democracy globally. They opposed the Cold War because it put ideological battles into a military-strategic frame in which democratic principles and processes were jettisoned.

Will Indian Oil tell us which pumps we can go to?

In the case of Ukraine, there are both moral and strategic considerations involved that profoundly affect our perception of the national interest. The moral issue is black and white — a powerful country has invaded a less powerful one and is killing civilians — one of our own students was killed, a boy who stayed behind to help others when he had an opportunity to leave.

Now, while the strategic issues are still being debated, our government has dismissed the moral issue by concluding a cheap oil agreement. There may be reasons for it, such as that our existing oil suppliers will be under pressure from exponentially increased European demand following sanctions, but we have not been told what the reasons are, or whether they are compelling. Were there other ways of ensuring supplies? Or is it a question of price? Will the discounted price at which the Modi administration buys lead to a reduction of prices to the consumer?

Most important of all, are Indian consumers willing to pay the moral price of accepting discounted oil from Russia? Do we have a choice? At least, those of us who wish to boycott this buy should be told which pumps we can go to if we do not wish to buy Russian oil

*Radha Kumar is a writer and policy analyst.

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