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Window of opportunity

Russia’s decision to ban oil exports to G-7, EU& Australia, China battling the Covid 19, India enters the big boys ring with an ace! K.A.Badarinath It’s advantage India. Russian President Vladimir Putin’s decision to ban his country’s oil exports to G-7, European Union and Australia beginning February 1 for five months will open new window of opportunities for India in crude oil, refining, consumption and trade. President Putin’s decree was in response to $ 60 per barrel price cap slapped by these countries and groups as a counter to Russia’s campaign in Ukraine. India neither supported the Russian aggression in Ukraine nor has had aligned with Western forces in imposition of price cap on Russian oil. This equidistance and independent policy not only brought India to the centre of oil trade but also provided an opportunity to peddle peace between warring neighbours, Russia and Ukraine. Given that China has been overwhelmed by Covid 19 leading to economic downturn and thereby hitting its energy consumption, India has emerged the biggest energy partner for Russia. US allies, EU and Australia’s decision not only to impose a price cap on oil imports from Russia but bar their shippers, financiers and insurers from backing energy deals with the country has enraged President Putin. From Indian perspective, Russia has already emerged the biggest exporter of oil with over 1.7 million barrels per day during November 2022. Bloomberg has put this figure at 4 million barrels per day that Russia is supplying to India at ‘deep discount’. Both Russia and India have been mum or refrained from making any comment on the price at which this oil trade is happening. These supplies are bound to increase over next six months given the huge un-utilized refining capacities and opening opportunities for exporting end-use hydrocarbons. Independent advisory Standard & Poor Global analysts estimate that two million barrels per day oil would be available from Russia that may be absorbed by India when Putin’s ban on exports to EU, G-7 and Australia kick in. Over 80 per cent of Indian imports from Russia during November 2022 are Urals grade that are currently traded at $ 54 per barrel, deeply discounted and benchmarked to Brent turning the $ 60 price cap a big mockery. Currently, spot market Brent has been traded at a whopping $ 82 per barrel. Two other Russian crude grades, ESOP and Sokol have been quoted at $ 71 and $ 76 per barrel respectively. For last five months, Indian oil imports from Russia have been on surge and constitute about 23 per cent of total import bill that New Delhi forks out. Ukraine conflict has not limited to changes in the geo-political realignments alone. It has extended big time to trade, investments and economic posturing of different countries that have taken a definitive stand on Russia’s unending campaign in Ukraine. India has consciously distanced itself from block-making against Russia. It cannot be construed as unhindered support to Russia in its aggression in Ukraine. Given its delicate relations with Ukraine, India had been on humanitarian aid drive in the war-torn country rummaged by Russian forces bombing and missile attacks. India also donned the role of a peacenik that was willing to make significant negotiations with both Russia and Ukraine to explore peace opportunities. This independent policy stance may not have appealed to US democratic White House led by President Joe Biden. India’s western partners may have to reconcile to the position that Indian policy formulation cannot be swayed by their own block formations. Apart from opportunity to source cost-effective crude and play peacenik role with Russia, India’s third window to open would be exploiting full potential for trade, investment and economic relations bilaterally. This seems to be the next phase in which India and Russian relations have entered. Given the present proclivities, India and Russia may go miles even as New Delhi repositions itself as the powerhouse to become $ 40 trillion economy by 2047. (Author is Director & Chief Executive, Centre for Integrated and Holistic Studies, a bipartisan think tank based in New Delhi)

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India’s Right to Pursue Lucrative Russian Oil Deals

NATO must revisit their unrealistic expectation for New Delhi to cut off ties with Moscow. Local currency oil deals should be the future K.A.Badarinath / New Delhi There’s raging debate over India’s crude purchase from Russia that has invaded Ukraine thereby pitching Moscow against combined might of European Union, UK, the US and other NATO allies. In last four weeks, lot has changed in terms of geo-political scenario especially in Eastern Europe and Baltic region thereby bringing oil trade into big focus. India that pursued a ‘balanced’, ‘independent’ policy puts her on equidistant terms vis-à-vis the sanctioned Russia and NATO allies in the Ukrainian conflict. India’s position has come under enhanced scrutiny of world community owing to this unwavering approach. While overwhelmingly, Indians internationally have hailed a ‘hands off’ policy towards the conflict, humanitarian intervention and ‘Operation Ganga’ have hogged global headlines. In the melee, oil purchases from Russia that may total to two per cent of Indian imports have been questioned by pro-western lobbies. Veteran parliamentarian Subramanian Swamy stopped short of calling India’s policy as nothing short of being ‘tragic’ and ‘unsustainable’. Hawks apart, India’s call to buy about 33 million barrels oil from Russia’s top-end exporter Roseneft is pragmatic and rooted in long term sustainability. On March 9, an internal note got circulated amongst top echelons of Modi government. And, as insiders divulge, March 11, Prime Minister Modi himself took a call to continue with the oil imports from Russia on Indian terms. Russian President Vladimir Putin who’s under increasing isolation seems to have more than accommodated India in the oil and other bilateral trade deals. Offering deep discounts, taking care of insurance costs, safe passage and delivery of crude at Indian ports were some terms that were tempting for India that was battling high oil import bill. Payment in rupee terms for oil or settlements against Russian Ruble at pre-designated rates provides a cushion for Finance Minister Nirmala Sitharaman whose budget maths would have otherwise gone awry with Brent crude prices touching $114 per barrel on Monday. Also, setting off oil payments against Russian exports especially the rough diamonds is not a bad idea in content and spirit of free trade. Hence, Indian Oil, Bharat Petroleum, Mangalore Refineries & Petroleum Ltd, and a host of oil importers jumped into the fray to conclude contracts that would translate to billions of dollars for India. It’s not just Russia, the entire middle-east line up has been tapped to conclude deals that could be showcased as to how geo-politics and oil trade were inseparable. With US and UK phasing out hydrocarbon imports from Russia and European Union seeking to fall suit, very handsome deals may still be possible in local currencies to get around the sanctions. For instance, Iran that was touted as the biggest oil supplier to India with unflinching ties, was the fall guy to Donald Trump’s sanctions owing to its nuclear programmes. Only two days back, taking cue from Russian deals, Iran had hinted at resuming rupee – rial designated oil supplies with bilateral trade potential at $30 billion this fiscal. From $17 billion in pre-sanctioned era of 2019, bilateral trade has plunged to a very modest $2 billion this fiscal. There’s no denial that both NATO and other western powers recognize India’s compulsions give its 85 percent crude requirements are met through imports. While the world is critiquing India’s sustained oil imports from Russia, India is all set to increase its share of oil import from the US by 11 percent. Moreover, both EU and the US have till now not considered India’s oil deals with Russia as violating war-related sanctions. But, western lobbyists and the rumour mill around this ecosystem has been working overtime to put India on defensive mode to justify its continued oil deals with Russia. India owes no explanation to anyone but herself. In fact, exploring local currency based oil and other trade deals would encourage multiplicity of such transactions lending variety to these transactions that are done away from referenced US dollar or the Euro. The four largest oil suppliers like US, UAE, Saudi Arabia and Nigeria should also explore more innovative deals for India that’s spoilt with varied options. Oil deals – both in spot and futures market—concluded by India cannot be subjected to sanctions that are being used as new neo-nuclear weapons by Western allies. India’s economic and political interests globally are diverse and each response from New Delhi is laced with nuances that cannot be set aside by the world community. It does not necessarily mean that India should not consider other energy options that limit hydrocarbons dependency. The earlier, it’s that much better. (Author is Director & Chief Executive of Centre for Integrated and Holistic Studies based in New Delhi. Views expressed are author’s own.) E-mail – badarinath@cihs.org.in

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Indian Students Evacuated Amidst War Torn Ukraine

Operation Ganga, largest evacuation exercise since world war two demonstrates the country’s strength, compassion and reach globally Rohan Giri / New Delhi Millions of students and professionals from different countries were stuck in Ukraine during special military operation launched by Russia two weeks back that included massive air raids, rolling out columns of tanks and firing of missiles. Most of these individuals and families were anxious to head back home to escape the Russian operations. But then, the Russian attack left them stranded with airspace is shut, trains suspended and borders sealed. Especially, students that form large chunk of foreign nationals in Ukraine were left with very few options to escape from the military action unleashed by Russia headed by President Vladimir Putin. Prior to the attack, several European, the US and Western countries embassies as well as High Commissions had issued advisories to their respective citizens to leave the conflict ridden country. On its part, Indian Embassy in Ukraine did the same. As the military conflict situation evolved, Indians mostly students studying medicine in several Ukrainian universities found it a daunting task to escape from their cities. While most countries left their citizens to fend for themselves, Indian government along with a host of voluntary and semi-government organizations launched ‘Operation Ganga’, code-named for the biggest evacuation campaign since World War II. Apart from a small Indian Business community in Ukraine, more than 18000 Indian students study medicine and engineering in Ukrainian universities were to be pulled out of military conflict zones especially in Eastern region. Apart from issuing advisories from time to time, India asked its citizens whose stay was non-essential to move out to safe harbours. This was essentially viewed as a temporary measure as the conflict was expected to end in a couple of days. But, as the air raids intensified, bombing continued round the clock and tanks rolled into city after city, it became virtually impossible for Indians to stay back like other foreign nationals. This was the backdrop to launch ‘Operation Ganga’ with Prime Minister Narendra Modi leading from the front. Following the first advisory on February 15, Indian mission not only in Ukraine, but several other countries in Baltic region came in for coordinated efforts to get out the Indians. Before the ‘Operation Ganga’ was launched, several measures were rolled out by Indian government as precursor to a difficult humanitarian operation that was conducted with dexterity and precision. Prime Minister Modi’s personal engagement with his counterparts in Russia and Ukraine worked wonders. A brief timeline of how events unfolded demonstrate the way things were planned to bring Indians back home with very little fuss. Here’s the Timeline: On February 16, Cap on passengers was removed under the Air bubble arrangement. On February 18, Air India flights were announced for evacuation on Feb 22, 24 and 26. On February 20, Air India was considering postponing flights due to no booking from Ukraine. The mission issued the second advisory strongly urging Indian Nationals to leave on the same day. On February 22, a third advisory was issued regarding additional flights. On February 24, the Airspace of Ukraine has been closed, and alternative arrangements are being made. On February 25, the Government of India and the Embassy of India are working to establish evacuation routes from Romania and Hungary. Advised to Print out the Indian flag and paste it prominently on vehicles and buses while travelling. On February 26, those staying in the Eastern area of Ukraine remain in their current places of residence until further instruction. On March 01, successfully facilitated the movement of more than 1400 students out of Zaporizhzhia, city in South-East Ukraine, westwards. On March 02, Urgent advisory to Indian students in Kharkiv for their safety and security must leave Kharkiv immediately. Operation Ganga As the crisis between Russia and Ukraine escalated, Ukraine closed its Airspace for civilian flights. More than 18,000 Indian expatriates, mostly students, were left stranded during the crisis. As students appealed for evacuation from the shelters, the Indian government launched a multi-pronged evacuation plan called ‘Operation Ganga’ to bring its citizens home. The Indian missions in Poland, Romania, Slovakia, and Hungary were made Arrangements under ‘Operation Ganga’ to bring back Indian citizens from Ukraine. Under ‘Operation Ganga’, Minister of Petroleum, Government of India, Hardeep Puri was sent to Hungary, Aviation Minister Jyotiraditya Scindia was sent to Romania and Moldova to bring back Indian citizens; Law Minister Kiren Rijiju in Slovakia and Minister of State for Civil Aviation in Poland VK Singh were sent. Major Evacuation Operations by Indian government The Indian diaspora is the most skilled in the world. In difficult times, the Government of India has started many operations to bring back its people. When the Covid-19 outbreak attacked the world, India’s government launched the “Vande Bharat Mission” to return Indian people who got stucked in foreign lands. As of April 30, 2021, around 60 lakh Indians had been returned through multiple phases of the operation. During the Covid-19 pandemic, Operation Samudra Setu was a naval operation that was part of a national attempt to bring back Indian citizens who had been abroad. It was able to return 3,992 Indian citizens to their motherland by sea. The Indian Naval ships Jalashwa (Landing Platform Dock) and Airavat, Shardul, and Magar (Landing Ship Tanks) took part in the 55-day operation, which covered more than 23,000 kilometers by sea. In March 2016, Terrorist attacks occurred at Brussels Airport in Zaventem and Maalbeek Metro station in central Brussels. A Jet Airways flight brought back 242 Indians, including 28 crew members. The Yemeni government and Houthi rebels were engaged in a conflict in 2015. Thousands of Indians were trapped, and Yemen was cut off from the rest of the world by Saudi Arabia’s declaration of a no-fly zone. India rescued almost 5,600 people from Yemen as part of Operation Raahat. In the wake of the 2015 Nepal earthquake, the Indian government and the Indian Armed Forces launched Operation Maitri, a cooperative relief

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Russia-Ukraine Crisis: India’s Foreign Policy Implications

Rahul Pawa / New Delhi On February 23, 2022, Russian President Vladimir Putin announced a “special military operation” in Ukraine. Russia has long opposed Ukraine joining the European Union (EU) and North Atlantic Treaty Organization (NATO), the West’s defensive military alliance. He accused NATO of threatening Russia’s “historic future as a nation” and announced Russia’s military operation in Ukraine. “The purpose of this operation is to protect people who, for eight years now, have been facing humiliation and genocide perpetrated by the Kyiv regime,” Putin added. Subsequently, several media outlets reported explosions in numerous locations and large-scale Russian military operations throughout Ukraine. Ever since Ukraine’s pro-Russian president, Viktor Yanukovych, was overthrown in 2014 after months of protests against his government, Russian President Vladimir Putin has regularly flagged Ukraine of being taken over by extremists. Russia responded by seizing Crimea’s southern region and sparking a revolution in the east, backing hardliners against Ukrainian soldiers in a war that has claimed 14,000 lives. Regardless, the current issue has its roots in the disintegration of the Soviet Union. Ukraine, a former Soviet republic, had the world’s third-largest nuclear arsenal when the Soviet Union disintegrated in the early 1990s. The US and Russia collaborated with Ukraine to de-nuclearise the country. In a series of diplomatic deals, Kyiv returned hundreds of nuclear warheads to Russia for security assurances against a possible Russian assault. However, the assurances did not stand; below, we examine the 2022 Russia-Ukraine Crisis and discuss India’s foreign policy implications in that context. Download Explainer – Russia Ukraine Crisis (Author is the Director for Research at Centre for Integrated and Holistic Studies)

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Human Cost Should Deter War!

India’s independent approach to Russian invasion on Ukraine balances its relations with NATO, European partners Amrit Pal Kaur / New Delhi Critics from either side of foreign policy matrix may have issues with India charting an independent and balanced course on Russia’s invasion of Ukraine as against NATO allies and European Union opposition to this intrusion. Pro-NATO and European think tanks have made out that India missed the bus in playing a decisive role in world affairs yet again by keeping off the conflict mostly unconcerned and untouched. Soviet era Russia’s backers have hailed India’s ‘sensible’ decision not to go whole hog with NATO alliance given her varied offensive and defensive interests. But then, Modi government hardly had many options in changing course of events leading to military aggression on Ukraine by Russia while both NATO and European Union went ahead with severely sanctioning Moscow. China that subtly supported Russian invasion chose to talk of winding down the violence though the two countries communist leadership has been led by oligarchs. Prime Minister Narendra Modi’s telephonic conversation with President Vladimir Putin is a milestone in long chain of events that led the present invasion. India’s appeals for peace and getting back to diplomatic dialogue on outstanding issues relating to Ukraine cannot be ignored by the world community. Russia’s ‘military operation’ in Ukraine has virtually sealed the possibility of rapprochement with Europe that continued to hang in balance during last 30 years. India’s external affairs minister S. Jaishankar rightly mapped the genesis of Ukrainian issue that emanates from complexities of ‘Post Soviet Politics, expansion of NATO and relationship between Russia and Europe.’ In last three decades, Russia concluded numerous arms-reduction treaties with Western countries including 1997 Russia-NATO Act, Budapest Memorandum, Treaty on Conventional Armed Forces in Europe (1990), Intermediate Range Nuclear Forces Treaty (1987) and Open Skies Treaty that put an end to cold war in Europe and opened avenues for cooperation between Russia and Europe. Some genuinely believe that Russia did not reap benefit of the cooperation with Europe. Breaking point perhaps was granting NATO membership to Ukraine that brings Europe’s sphere of influence to Russia’s doorstep. President Putin’s statement that Russia wants demilitarization of Ukraine and it ‘does not intend to occupy’ the country implies that the conflict goes beyond their bilateral relations and points to involvement of greater Western powers. In this larger struggle for supremacy, one country which has been asked to pick sides is India. As an emerging market economy, credible and substantial international power, India has largely seen herself as a stabilizing factor that pushes seriously for peace and prosperity. Such is the case especially after India became an equivalent member of QUAD after shunning ‘hesitations of history’ that defined non-alignment. Indian position has come into greater focus due to its close relations with Russia, USA and European Union. Its membership and current chairmanship at UNSC has only accentuated India’s stake given that she been a longtime votary of independent foreign policy and pluri-lateral world order. Since India has had close civilizational links with both sides, it’s pragmatic and logical to abstain from voting on Ukraine issue at UNSC. India’s representative at UN Tirumurti spelt out India’s stand and asked countries to find peaceful, diplomatic solution through Minsk mechanism. It’s rather impractical to expect India to severe its relations with Russia that has been her single largest defense partner with 60 per cent share in defense inventory. On the other hand, India has also nursed progressive relations with US as well as Europe for over 20 years, since Vajpayee-Clinton era. India as a fast-developing country has its own pressing needs with over 1.4 billion to feed and enable spread of prosperity. Therefore, expectations on either side for India to align may not fit into the New Delhi’s scheme of things. Her compulsions to lift a vast majority out of poverty and put herself on growth mode are what drive India’s foreign policy. In fact, these very imperatives pushed India’s position striking a fine line between Russia and West at large. Instability on eastern flank of Europe brings home the acute need to develop in house inventory of defense mechanisms and systems without depending on imports. Self-reliance is the key to great power status. ‘Make in India’ initiative in the defense sector is a significant component of the policy choice made by the government. Russia’s invasion of Ukraine is bound to create ripple effects already being felt in India though New Delhi has stayed away from swinging either ways. Crude prices touching $ 105 per barrel in spot markets would translate to larger fuel import bill thereby upsetting budget numbers outlined by Finance Minister Nirmala Sitharaman. As Russia apart from OPEC has been large exporter of hydrocarbons in particular to Europe, the crisis will increase fuel prices and shortage in almost all of Europe. For instance, Finland imports most of its crude while Hungary gets 83 per cent, Austria – 62 per cent and Germany imports 46 per cent of its natural gas. Russia’s output had kept fuel prices competitive while curbing the Gulf dominance, its engagement otherwise will give space for the monopolies that’s bound to distort market prices, distribution as well as access. Precarious growth of world economy that’s bracing post-Covid will be badly hit. Most importantly, it will create crude induced inflationary pressures in countries like India where over 80 per cent fuel demand is met through imports. Recent World Bank report Global Economic Prospects argued that the world is walking towards global slowdown as the fiscal support in the wake of corona virus pandemic wanes, increase in debts and inequalities would kick in across the world. There is no denying that Europe and the world at large are treading choppy waters. Though the ongoing invasion may not go the cold war way, it will certainly wreak havoc on lives of innocent people caught in the crossfire. Human cost involved in the war should act as deterrence and the countries involved should

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Window of opportunity

India’s Right to Pursue Lucrative Russian Oil Deals

Indian Students Evacuated Amidst War Torn Ukraine

Russia-Ukraine Crisis: India’s Foreign Policy Implications

Human Cost Should Deter War!