India’s imports from Russia surged 272% in the first two months of this fiscal from a year before to $5.03 billion, as New Delhi stepped up purchases of oil, fertilisers and coal to tackle a growing domestic shortfall of the commodities.
Trade sources told FE that the pace of growth in imports from Russia remained elevated in June as well, albeit on a low base, as New Delhi continued to resist mounting Western pressure to cut trade ties with old ally Moscow following the latter’s invasion of Ukraine.
However, India’s exports to Russia plunged 46% on year to just $245 million until May this fiscal, primarily due to logistics and payment issues in the aftermath of Western sanctions on Moscow. Consequently, India’s trade deficit with Russia widened to $4.8 billion until May this fiscal from just $902 million a year before.
Data sourced from the DGCIS showed, between April and May, India’s imports of crude oil from Russia climbed 621% to $3.2 billion, while those of petroleum products jumped 879% to $509 million (see chart). Similarly, imports of coal, coke and briquettes, etc surged 210% to $520 million. Fertiliser purchases, too, spiked 808% to $345 million.
To be sure, the growth in import value is substantially driven by a low base and a spurt in global commodity prices in recent months.
The trade sources said, apart from oil and petroleum products, coal imports from Russia continued unabated as the government sought to prevent any crisis in electricity generation during the summer. Three-quarters of the electricity produced in India uses coal and the country imports just under a quarter of its annual consumption of the raw material.
India’s reliance on Russia for fertiliser rose as crisis-ridden Ukraine, another supplier, isn’t in a position to ship out the key farm input. The government has been seeking to keep local supplies steady during the ongoing Kharif sowing season.
As FE had reported earlier, the surge in imports from Moscow suggests New Delhi, a net importer of commodities, has remained steadfast in its commitment to chart its own path despite Western pressure to shun Russian oil, especially when the advanced nations themselves are much bigger buyers of Russian fossil fuels.
Finance minister Nirmala Sitharaman recently defended the move, saying: “I will put my country’s interest first and energy security first. If oil is available and at a discount, why shouldn’t I buy it?” External affairs minister S Jaishankar, too, has decried the “campaign” against India on oil imports from Russia. India’s total oil purchases from Russia in a month would probably be less than what Europe does in an afternoon, he said earlier.
However, given that shipping lines are reluctant to take bookings to and from Russia, especially for dry cargo, Indian exporters haven’t been able to despatch much goods to Russia in the aftermath of the war. In the first two months of FY23, pharmaceutical exports to Russia dropped 34% to $50 million, while supplies of organic chemicals declined 12.5% to $35 million.