What does India want from Russia?

London—If there was a prize for the most quotable comment on international relations so far in 2022, Indian Foreign Minister Subrahmanyam Jaishankar would be in the running. Responding to criticism of his country’s neutral stance on the Russia-Ukraine war at a security forum in Slovakia in June, Jaishankar said that “Europe has to grow out of the mindset that Europe’s problems are the world’s problems, but the world’s problems are not Europe’s problems.”

India’s current foreign policy highlights the paradox inherent in the country’s increasing emphasis on “strategic autonomy” as the world fragments into rival power centers: the United States and its alliance system versus China and its major satellite, Russia. The essence of this paradox is that India’s quest for self-reliance—keeping its distance from the principals of Cold War 2.0 and seeking advantage from diverse relationships—entails a multidimensional international engagement.

European politicians painfully weaning their countries off imported Russian energy have criticized India for buying more Russian oil—after Western sanctions reduced its price by about a third relative to the world market price. Indian purchases of Russian crude increased to 1.1 million barrels per day (mbpd) by late July and now account for over one-fifth of Indian oil consumption, compared to just 2 percent last year.

The standard official Indian response is that, despite Europe’s extensive sanctions, the continent’s energy trade with Russia still dwarfs India’s. More tellingly, its purchase of discounted Russian oil is not only cushioning the blow to itself as a poor energy-importing country, but also helping prevent even more economic pain for Europe. If the 4.3 mbpd of crude oil that Russia sold to the West last year (or 6 mbpd including oil products) had no alternative markets like India, the world oil price would be even higher.

Recognizing the importance of keeping Russian oil on the market, the G7 has now come up with an alternative sanctions strategy that could present India with its next big test. Plan A was to combine, by the end of 2022, a partial embargo on direct imports of Russian oil with an attempt to choke off Russian oil exports to third countries by leveraging Western (and especially British) dominance of the global marine insurance market.

Plan B is the so-called “price cap” mechanism that would allow Russia to continue exporting oil but at a set maximum price just enough to cover production costs, thus depriving it of war-financing rent.

Either way, India will be in a pivotal position. It will continue importing substantial quantities of Russian oil at ever cheaper prices. And in the event that such imports weakened Western measures to squeeze Russia’s oil rents, the US would be unlikely to threaten—much less impose—secondary sanctions on India.

The reason for this is clear: A closer security partnership with India has become a vital part of America’s China policy. Specifically, the Quad—an informal security grouping comprising the US, Japan, Australia, and India—has emerged as a cornerstone of US Indo-Pacific strategy, and would not survive if the US sanctioned one of its members.

Of course, the US-India security relationship is mutual, given the live Chinese threat to Indian territory along the Himalayan Line of Actual Control—as the deadly June 2020 border skirmish showed. India thus has an interest in keeping Russia close and not allowing a monolithic and estranged Russia-China Eurasian axis to loom over the Indian subcontinent.

India is playing this multifaceted game adroitly. In defense procurement, it has acquired advanced Russian S-400 air defense systems and agreed to extend until 2031 the licensed local production of Russian weapons. But it has also increased arms purchases from Nato members, notably France.

Moreover, India has ample options for managing broader US sensitivities vis-à-vis Russia. For example, Russia urgently needs to replace industrial inputs that it previously imported from the West. This could provide further opportunities for Indian exports, which are already a third higher than their pre-pandemic level, owing in part to the government’s Atmanirbhar Bharat (“self-reliant India”) stimulus program for manufacturing.

India’s nuanced and multidimensional foreign policy means that the 75th anniversary of Indian independence will coincide with the country achieving significant—and advantageous—geopolitical autonomy. Project Syndicate

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Sushanta Mallick is professor at International Finance at Queen Mary University of London. Brigitte Granville is professor at International Economics and Economic Policy at the same university, and the author of “What Ails France?” (McGill-Queen’s University Press, 2021).