India-Russia Trade Made Western Sanctions Irrelevant: Economists
21:07 22.06.2023 (Updated: 19:04 28.06.2023)
© Sputnik / Mikhail Metzel
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India-Russia trade touched the $44.4 billion mark last fiscal, making Moscow the South Asian nation's fifth largest trading partner behind the US, China, UAE, and Saudi Arabia.
Two Indian economists who have closely followed the events related to New Delhi's mushrooming trade with Moscow have said that the South Asian country's economic partnership with the Eurasian nation has thwarted Western attempts to crush the Russian economy.
The remarks of Dr. Manoj Pant, who served as the Director of the New Delhi-based premier financial institution, Indian Institute of Foreign Trade (IIFT), and Amit S Ray, a professor at the Centre for International Trade and Development in the Jawaharlal Nehru University (JNU), come at a time when India has emerged as the world's fastest-growing economy, achieving a growth rate of 7.1 percent in 2022-23.
As per a statement made by Reserve Bank of India (RBI) Governor Shaktikanta Das last week, India is on course to accomplish a similar GDP rate in the next financial year as well.
In this light, the two academicians have praised the increasing India-Russia economic trade, stating that it has played a significant role in India earning the aforementioned status.
The remarks of Dr. Manoj Pant, who served as the Director of the New Delhi-based premier financial institution, Indian Institute of Foreign Trade (IIFT), and Amit S Ray, a professor at the Centre for International Trade and Development in the Jawaharlal Nehru University (JNU), come at a time when India has emerged as the world's fastest-growing economy, achieving a growth rate of 7.1 percent in 2022-23.
As per a statement made by Reserve Bank of India (RBI) Governor Shaktikanta Das last week, India is on course to accomplish a similar GDP rate in the next financial year as well.
In this light, the two academicians have praised the increasing India-Russia economic trade, stating that it has played a significant role in India earning the aforementioned status.
Terming the development as perhaps one of the most significant and commendable foreign policies adopted by India in a long time, Ray stated that this policy action has generated enormous economic benefits for the country.
"It has also firmly established India's global position as a key strategic player in maintaining the global balance of power that was being tilted disproportionately towards a unipolar axis revolving around the US and its allies after the end of the cold war," the JNU professor told Sputnik on Thursday.
He added that India's action has successfully thwarted the attempts of the Western world to crush the Russian economy by imposing sanctions, especially on the import of crude oil which provides Russian economy with a large revenue.
"Needless to mention, these sanctions have equally hurt the EU as well, since their main source of supply of crude has been chopped off creating strong upward pressures on their fuel prices," Ray elaborated.
At this juncture, India's actions have made it possible to import crude from Russia, get it refined in India, and export it to Europe which according to Ray "has created a win-win-win for all three parties".
He noted that trade between New Delhi and Moscow has salvaged the Russian economy; it has provided Europe with the much-needed supply of fuel; and it has been an economic boon for India, right from keeping its fuel prices and inflationary pressure in check to bolstering its trade balance and providing a major boost for its petroleum (refinery) sector.
"There is no doubt that the Ukraine-Russia conflict and its aftermath has led to new vistas being created in global alliances and India has positioned itself as a key player in this process. This is undoubtedly a phenomenal achievement of the present Indian government," Ray summed up.
Impact of Trade Between New Delhi and Moscow on Indian Economy
On the other hand, Dr. Pant too hailed the current success story of India offering a helping hand to Russia's economy.
On being asked if Moscow had any part to play in India's growth, he responded in the affirmative before mentioning that the role at the moment was quite significant.
"Because usually, the Indo-Russian trade is around $10-12 billion which has jumped to $44.4 billion recently. But it is entirely because of oil and exports from India to Russia which otherwise Moscow used to get from elsewhere. So it has certainly helped us maybe by one or two percentage points," Pant said in a conversation with Sputnik.
The former head of the Indian Institute of Foreign Trade even acknowledged that discounted Russian oil had aided the Narendra Modi-led government in keeping the inflation in check.
"I don't know the exact numbers, but I think at least 0.5 percentage of inflation is due to oil price increase which India's crude purchases from Moscow have kept in check," Pant asserted.
Russian crude imports have certainly been advantageous to India because the government has been able to hold the price of oil and may even cut it down in the near future.
Pant pointed out that the trade between Moscow and New Delhi has benefitted the two countries because Russia has got consumer goods it can't get from elsewhere and we have got oil cheaper than other markets. So trade in recent times has been good for both nations.
"Besides, The Western sanctions haven't affected Russia because the Eurasian nation has got all the consumer goods, they have got wheat, barley, vodka and they have gas and oil in plenty. So, the US imposed sanctions don't affect Russia so much," he concluded.
