India’s Dependency on Russia for Coal, Gas, and Oil
_Vinayak Barot
New Delhi: The government of India has to balance diplomatic and trade relations with Ukraine and Russia as the US asks India not to support Russia over conflict at the Ukraine border. The United States has pinned hope on India that it would stand by its side in case of Russia invades Ukraine.
The government of India somewhat depends on Russia for Gas, Coal, and Oil and Imports many goods from Ukraine also.
The Analysts warned that “Any invasion of Ukraine by Russian troops could trigger sanctions and reprisals that would disrupt the movement of fuels and impact energy security affecting buyers even thousands of miles away. There may be implications for Asia, where several countries including India depend on Russia for oil, gas, and coal.”
According to the media report, India imported 1.8 million tonnes of thermal coal from Russia in 2021, down from 2.5 million in 2020. Russia’s share in India’s thermal coal imports fell to 1.3 percent in 2021 from 1.6 percent. India imported 43,400 BPD oil from Russia in 2021, about 1 percent of its overall imports.
India accounts for about 0.2 percent of Russia’s natural gas exports. GAIL (India) Ltd has a 20-year deal with Gazprom to buy 2.5 million tonnes of LNG a year which started in 2018.
The price of several goods and services may increase if Russia fails to supply coal, gas, and oil to India. Fuel prices are not going down anytime soon as Brent crude oil prices hit $100 per barrel for the first time since 2014. Oil prices have risen sharply due to growing tensions between Russia and Ukraine on chances of disruption in oil production.
Russia remained a very old and strategic partner of India since the 1971 war of India with Pakistan. According to the defense experts, Russia had finalized the deal of missile s-400 with India without thinking about sanctions and restrictions of Western countries.
Note that Russia is one of the world’s top producers of crude oil and western countries have threatened to impose new financial and economic sanctions on Russia if it invades Ukraine. So, any western sanctions would disrupt the oil supply from one of the largest producers of oil.
However, reports said that oil prices were expected to cool down in hopes of diminishing tension over Russia-Ukraine especially after US President Joe Biden said there was still “room for diplomacy” to resolve the Ukraine crisis.
This also escalates concerns for the Indian economy as the country is dependent on oil imports and any rise in oil price increases the import bill. India imports over 80 percent of its oil needs.
However, China, Japan, South Korea, and Vietnam also imports Oil, Gas, and Coal from Russia in huge number.
