US Sanctions on Russian Oil Trade a Threat to India's Economic Stability: Expert

The US Treasury sanctions targetting entities flouting the G7 Price Cap on Russian oil pose a threat to India's economic stability, a geopolitical expert has told Sputnik India.

"India needs a steady flow of reasonably priced oil. Our domestic manufacturing and our power projects depend on a steady supply of oil. Having steady source of oil imports are also important to keep domestic inflation under check. So, there is no doubt, whatsoever, that we need Russian oil," remarked Brigadier V Mahalingam, an Indian Army veteran and analyst.

Russia has consistently ranked as the top supplier of oil to India since last year, accounting for 30-40 percent of New Delhi's overall oil imports.

Mahalingam stressed that Russian oil imports were all the more significant in view of the turbulent global economic situation, with the International Monetary Fund (IMF) trimming growth forecasts for "developing Asia" for the 2024-25 fiscal.

The IMF has projected India to grow at 6.5 percent in the coming financial year, lower than New Delhi's own forecast of 7 percent Gross Domestic Product (GDP) growth.

India's retail inflation exceeded 7.7 percent in the immediate aftermath of Ukraine crisis in 2022, which was an eight-year high. The retail inflation has since stabilised, with the Ministry of Statistics and Programme Implementation reporting a retail inflation of 5.10 percent in January.

Retail prices for petrol in India have remained stable since mid-2022 despite a global volatility in the energy market caused by G7 economies turning to Middle-East suppliers after banning Russian energy imports.

Senior Indian ministers, from External Affairs Minister S Jaishankar, Finance Minister Nirmala Sitharaman to Petroleum Minister Hardeep Singh Puri, have acknowledged the role of Russian oil imports in stabilising domestic inflation as well as international oil markets.

In fact, managing India's domestic inflation and petrol prices have been touted as a major achievement of Prime Minister Narendra Modi by the Bhartiya Janata Party (BJP) as he seeks a third term in upcoming elections.

"So, Russian oil imports are critical for India's to stabilise its economy," Mahalingam stated.

'No Way India Should Buckle Under US Pressure'

Mahalingam asserted that there was no way India should buckle under the US coercion or pressure, noting that Washington had a vested interest in checking India's economic rise.

"India is on the threshold of becoming the world's third-largest economy. The US is aware of that. The US has a vested interest in checking India's growing economic stature. The US' actions risk making energy imports more expensive for India by scaring away importers, which would ultimately lead to an increase in manufacturing costs and domestic inflation," he reckoned.

He characterised India's stance on Ukraine conflict as correct, underscoring that Russia has never harmed or come in the way of Indian interests.

"India has maintained a very positive and a neutral stance towards the Ukraine conflict. In fact, I won't characterise India's position as neutral but rather a correct stance based on facts... There is no way India should shift its policy on Ukraine to be in line US' demands," the Indian Army veteran said.

The Army veteran noted that the western sanctions against Russia have affected European Union (EU) the most, in the form of lowered growth projections and rising inflations.

"On the other hand, the US has captured almost half of Europe's natural gas market," Mahalingam highlighted.

He accused the US of propping up "artificial enemies" in different regions to serve its geopolitical interest of maintaining global hegemony.

"The US' policy has been to prop up an enemy and lobby other countries to work together against that enemy. In Europe, the US has portrayed Russia as an enemy. In East Asia, China has been portrayed as the enemy," Mahalingam said, adding that Ukraine has just turned into a "tool" of American geopolitical interests.

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