How India's Handling of Energy Supplies Boosted Narendra Modi's Standing at Home
14:01 29.08.2023 (Updated: 14:37 29.08.2023)
© Sputnik / Sergej Bobylev
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The Indian government's handling of energy supplies amid volatile oil prices globally has boosted Prime Minister Narendra Modi's standing at home, a think-tanker has told Sputnik India.
Russia has emerged as India's largest oil supplier this year, with Moscow's contribution to the South Asian country's oil basket touching almost 45 percent in recent months.
The economic ties between the two nations have grown exponentially following February 2022 - now, Russia is India's fourth-largest trading partner after the US, China, and the UAE.
Sputnik India reached out to Ashwani Mahajan, who is associated with the advocacy group Swadeshi Jagran Manch (SJM), to find out whether growing Indo-Russian friendship has actually served as a boost for Narendra Modi's approval among Indian citizens.
India-Russia Bilateral Trade Records 300% Increase in 2023
Speaking about numbers: the trade turnover between Russia and India has increased by 300 percent during the January-July period this year.
As per a data analysis conducted by Sputnik, bilateral trade between the two long-time allies has touched a whopping $33.5 billion in the first seven months of 2023, registering an almost 300 percent surge in trade volumes compared with statistics from the January-July period last year.
The unprecedented increase in trade figures has been largely attributed to India's rising imports of Russian crude which have grown at a rate of 440 percent during the same period in comparison with the January-July time frame in 2022.
Oil supplies from Russia to China and India
© Sputnik
According to Mahajan, in the past, India was paying through the nose for its crude requirements as New Delhi was compelled to do so due to a monopoly-like situation. The OPEC countries and other oil exporting nations were charging a huge price from India.
Crude Imports From Russia Break OPEC Monopoly
Against this backdrop, he insisted, India was saying that it was beneficial for it to purchase oil from Iran and Russia.
"However, previously we have seen that the governments had been under pressure from the US on the issue of importing oil from Iran and Russia," Mahajan said.
The Indian economist explained that New Delhi has a long-standing relationship with Moscow, and once Western countries imposed economic sanctions on Russia following the Ukraine conflict, India began buying oil from the Eurasian nation.
Oil reserves in the world and the Middle East
© Sputnik
Meanwhile, Mahajan opined that the new arrangement of Rupee payment, apart from the changing geopolitical landscape, made New Delhi more inclined to purchase crude from Moscow.
Robust Oil Trade Serves Both India & Russia
Mahajan stressed that the cooperation has been mutually beneficial to both India and Russia as Moscow found a reliable partner for its crude and New Delhi could pay in local currency and at the same time get a good deal on price.
He reckoned that it was a win-win situation for both nations, particularly for New Delhi as India can't afford to have a scarcity of oil.
"There's no reason, India should have a scarcity of petroleum, but the only issue here is the price. Therefore, if we can get it at a lower price, obviously it is a big plus for us," Mahajan expressed.
According to him, International sources of oil are important for India given that it is the third largest importer of crude. But the price plays an important role in deciding from where it imports oil.
Mahajan pointed out that the Indian government has been making advance purchases from foreign suppliers as the country has a stable demand for oil products.
Additionally, policy planners know what would be the demand two months or six months down the line and hence, they make advance purchases and through that try to minimize the effects of price escalation if there are any.
High-Five For Modi's Oil Import Policy
In the case of Russia the price has always been lower than the market price and the stable supplies of oil and that too at a discount from Moscow has been a boon for India, Mahajan affirmed.
"To a great extent, the Modi government's handling of energy supplies amid volatile oil prices globally has boosted his standing and approval ratings at home," the academic commented.
Russian President Vladimir Putin, right, and Indian Prime Minister Narendra Modi pose for a photo prior to their talks on a sideline of the Shanghai Cooperation Organization summit in Bishkek, Kyrgyzstan, June 13, 2019
© Grigory Sysoyev
Mahajan argued that India has been paying a higher price for crude most of the time. Though the supplies of crude were available at a lower price from Iran earlier, the previous Congress-led government couldn't pass on the benefits to ordinary Indians at the time.
He remarked that because at that time, the Indian government never wanted to offend the US. On the other hand, the Narendra Modi government has been following an independent foreign policy and has not bothered about what America or the Western bloc says, which has done wonders for the Indian economy.
When India Shines, West Fails
Mahajan said that, unlike most European economies that are battling record inflation, India has been successful in keeping food inflation under check, thanks to the various initiatives taken by the federal government.
"As far as energy inflation is concerned, with the help of our strong and independent foreign policy, India could buy oil from Russia, allowing us to keep the prices of petroleum under control," he mentioned.
Meanwhile, Narendra Taneja, the chairman of the Independent Energy Policy Institute in Delhi was of the view that energy in general, and oil in particular, is the foundation of the global economy. Therefore, stable oil supplies are crucial, especially for energy-deficit countries, like India, Japan, and many others in Asia.
Why Do Global Oil Prices Matter to Ordinary Indians?
Taneja contended that India imports roughly 87 percent of its total requirement of crude oil from different countries.
Every Indian consumes oil in one form or another -- be it petrol, diesel, kerosene, or liquefied petroleum gas. Hence, the prices of oil matter to every ordinary citizen.
Like Mahajan, Taneja praised the Indian government's crude import policy, highlighting that Prime Minister Modi has kept the nation's ordinary citizens in mind while purchasing oil at lower than market prices.
"The Prime Minister Modi government has handled all oil imports brilliantly, based solely on economics and nothing else. This approach has served the Indian economy and the ordinary Indian consumer very well," Taneja concluded.
22 August 2023, 21:12
