India continues its delicate balancing act in not joining the chorus of Western nations in condemning Russia’s eight-month long war in Ukraine while appealing for dialogue to end the conflict. Unfortunately, the war has entered a more perilous phase with Ukraine staging a stunning military counter-offensive since early September and an increasingly cornered Russia annexing four regions through referenda and mobilising reserves for this never-ending conflict. Last Sunday, Ukrainian forces were in full control of the eastern logistics hub of Lyman, the most significant battlefield gain, which provides a staging post for lightening offensives to recapture more territory in the east. Russia, for its part, has vowed to use “all means” including nuclear weapons, to defend its territorial annexation. Worsening geopolitical tensions are bound to impact the energy and food security of the developing world, including India. Even on the diplomatic front there are costs involved as India’s stance is bound to be increasingly viewed by Western nations as a tacit support for president Putin. But true to form. India abstained on a resolution at the UN Security Council that condemned Russia’s “illegal so-called referenda” in four of Ukraine’s regions while reiterating its plea in favour of peace, diplomacy and dialogue.
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India’s restrained position on the Ukrainian conflict obviously stems from its limited geopolitical options. If it joins the West, there is the risk of antagonising the time-tested, reliable relations with Russia. At a time of Chinese aggression on its northern and northeastern borders, the last thing India wants is a disruption of Russian defence equipment on which it depends heavily. Since the Ukraine conflict began in late February, India has also emerged as a big purchaser of deep-discounted Russian oil—buying 765,000 barrels a day last month from limited quantities earlier—in the interests of its energy security. But there are costs with this strategic objective as the ambit of Western sanctions is steadily widening on Russian oil and gas supplies with the US unveiling a raft of new measures against top Russian officials. This is bound to pose serious payment problems for India which is not keen as yet to bypass the Western financial system. Not so long ago, there were reports that Russia was seeking payment for its oil supplies to some Indian customers in the UAE dirham. India would have been relatively insulated from all of this had the rupee-rouble trade agreement of yesteryear been fully re-activated. But this is still a work-in-progress at the moment with no clarity on the peg to fix the rupee-rouble exchange rate. India’s exporters are weighing the impact of fresh sanctions with concern with shipments to Russia dropping by 30% between April to July this fiscal, according to a report in FE.
India’s stance of not taking sides in the Ukrainian conflict thus is bound to be severely tested as the war is entering a more dangerous phase. It has already unleashed the spectre of a full-blown global food crisis—with prices of wheat and other essentials spiraling up—that threatens vast parts of the developing world. Prime minister Narendra Modi did mention these issues to president Putin when they met at the Shanghai Cooperation Organization summit in Samarkand. The big question is how much longer would India sit on the fence as the costs are steadily mounting not just on the economic but also the international diplomatic front?