Foreign Secretary Vikram Misri said on Monday that the Indian government would continue to prioritise the interests of Indian consumers as far as the question of energy sourcing is concerned.
"You are aware that India is a net importer in the oil and gas sector. We are a developing economy. We have to be conscious about our resource availability. Naturally, when you are dependent to the extent of 80-85% on an imported resource, you have to have concerns about the possibility of inflation driven by energy cost," Misri told a briefing at the Ministry of External Affairs (MEA) headquarters in New Delhi, while responding to a question concerning Russian oil imports amid increasing US pressure on India.
So, it is not surprising therefore that our foremost priority is to safeguard the interests of Indian consumers, insofar as energy is concerned. Really, to ensure that they receive adequate energy at the right price and through reliable and secure supplies. And our import policy insofar as energy is concerned is therefore driven entirely by these objectives, the Indian Foreign Secretary explained.
The secondmost senior Indian diplomat highlighted that the global economy has faced "significant uncertainties" in recent years, which have had a major impact on the stability of global energy markets.
"India certainly, I would imagine a lot of countries, around the world, if not every country, have shared and common interests in ensuring stable energy prices and secure supplies," Misri said.
He explained that India had diversified its crude supplier base to around 40 countries in recent years.
"I would underline that India is not just one of the largest consumers of energy but it also plays an important role as a stabilising factor in global energy markets. That's one reason why we import energy from multiple sources. As I mentioned earlier, the key drivers of our energy policy are adequate availability, fair pricing and reliability of supplies. We are neither dependent on any single source for this nor do we intend to be. And it is natural for a mix of sources to vary from time to time, depending on objective market conditions," the Indian diplomat stated.
Our approach is to maintain multiple sources of supply and diversify them as appropriate to ensure stability. Therefore, I would say the more diversified we are in this area, the more secure we are, he said.
Further, Misri pointed out that it was the oil companies which were mainly responsible for energy sourcing decisions, be it in the public sector or private entities.
"And they make decisions based on market conditions, they assess availability at any given point in time, they assess risks, they assess costs in this process and obviously all of these companies also have their own internal accountability-related processes to look at and certain fiduciary responsibilities in the market," the Foreign Secretary said.
Misri said that energy sourcing decisions by these companies involved a "complex matrix of issues" that should be taken into account, which included the critical financial and logistical factors.
"I expect what you will continue to see in this sector is business choices being made based on these considerations that I have outlined. So, what I can firmly and confidently say is that whether it is the government or be it our businesses, at the end of the day, national interest will be the guiding factor for us in our choices," the Indian Foreign Secretary stated.
Misri's detailed comment comes against the backdrop of concerns in India in the wake of the India-US Joint Statement announcing a framework for an Interim Agreement and the US President Donald Trump's Executive Order concerning India's Russian oil imports. Both the documents were released on Saturday.
The Executive Order claimed that India has "committed to stop directly or indirectly importing Russian Federation oil" and would purchase US energy products. While withdrawing the 25% tariff on India over its purchases of Russian oil, the US order warned that the Trump administration could reimpose the tariff on India if it resumed its imports of Russian oil.
Indian Commerce Minister Piyush Goyal has said that India-US trade deal has "nothing to do" with oil.
The Indian government hasn't confirmed the US President's claim as of Monday, something which Foreign Secretary Misri didn't confirm in his statement today either.