Historically, oil has not played a significant role in the trade relationship between India and Russia, with the commodity ranking low on the list of trade items. However, the war in Ukraine and the subsequent global events have dramatically shifted this dynamic, propelling oil to the forefront of their trade relations. During his visit to Moscow earlier this week, the Prime Minister acknowledged that Russia’s support has been instrumental in helping India provide fuel for its large population, especially as other countries grapple with energy shortages. Modi also emphasized that the oil trade between India and Russia has contributed to global energy market stability.
Between April 2022 and May 2024, Indian refiners likely saved at least $10.5 billion in foreign exchange by significantly increasing purchases of discounted Russian crude oil after the Ukraine conflict began. With Western countries reducing their imports of Russian oil in response to the February 2022 invasion of Ukraine, Moscow offered substantial discounts on its crude oil. Indian refiners took advantage of these offers, making Russia—once a minor player in India’s oil trade—now New Delhi’s largest oil supplier. This surge in oil imports has also elevated Russia into India’s top trade partners.
India has had to carefully navigate its relationship with Russia, facing criticism from Western nations for allegedly helping finance Russia’s war in Ukraine by increasing its oil imports. However, India has consistently maintained that as the third-largest consumer of crude oil globally, with an import dependency of over 85%, ensuring energy security and affordability is a top priority. The Indian government has emphasized its role in stabilizing the global oil market by continuing to purchase Russian oil, which Western nations have largely boycotted. Modi’s recent remarks in Moscow are viewed as a reaffirmation of India’s long-standing position.
According to data from the Directorate General of Commercial Intelligence and Statistics (DGCIS), India’s total oil imports for 2023-24 (FY24) amounted to $139.86 billion. If Indian refiners had paid the average price per barrel from other suppliers instead of the discounted Russian rates, the total oil import bill would have been $145.29 billion, which is $5.43 billion higher. Similarly, for FY23, India’s oil import bill totaled $162.21 billion. Had Russian oil been priced at the same average as other suppliers, it would have increased by $4.87 billion. In the first two months of FY25, Indian refiners saved approximately $235 million on Russian oil imports alone.
Question 1: What is the main reason for the shift in India’s oil trade relationship with Russia?
A) Russia has always been India’s largest oil supplier.
B) India increased its imports of discounted Russian crude oil after the Ukraine conflict began.
C) India has reduced its oil imports due to global energy shortages.
D) The Indian government has banned the purchase of oil from Western countries.
Question 2: Which of the following, if true, would weaken the argument that India’s purchase of Russian oil contributes to global energy market stability?
A) Other major oil-consuming nations continue to boycott Russian oil, leading to supply shortages.
B) India has diversified its oil imports by purchasing crude oil from several different countries.
C) India’s oil imports from Russia are expected to decrease in the coming fiscal year due to rising prices.
D) Indian oil refineries are facing technical issues, reducing their refining capacity.
Question 3: What assumption underlies India’s justification for continuing to import Russian oil despite Western criticism?
A) Western nations will eventually resume purchasing oil from Russia.
B) India is the largest consumer of crude oil in the world and can dictate global oil prices.
C) Russian oil is of higher quality compared to oil from other suppliers.
D) Ensuring energy security and affordability for India outweighs the geopolitical concerns surrounding the Ukraine conflict.
Question 4: What inference can be drawn from the data provided about India’s oil imports for FY23 and FY24?
A) Russian oil has significantly reduced India’s overall oil import costs compared to other suppliers.
B) India’s oil import bill has increased substantially due to purchasing Russian oil at discounted prices.
C) The total volume of India’s oil imports decreased between FY23 and FY24.
D) India’s energy dependency has shifted from oil to renewable energy sources.
Question 5: Which of the following is a strong argument supporting India’s decision to continue purchasing discounted Russian oil?
A) Indian refiners have developed a new technology that allows them to refine oil more efficiently.
B) India’s oil consumption is expected to decline over the next decade, reducing its reliance on imports.
C) The purchase of discounted Russian oil helps India save billions in foreign exchange, which strengthens its economic stability.
D) Indian citizens have expressed their support for the government’s oil trade policies.
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