India could buy Russian oil above the price cap if...: FM Nirmala Sitharaman
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New Delhi, Apr 17: India will explore buying Russian crude oil near or past the price cap set by the G-7 as it navigates external risks it sees as the biggest economic threat. “Yes, because otherwise, I’ll end up paying far more than what I can afford,” Finance Minister Nirmala Sitharaman said in an interview in Washington when asked if India would continue importing Russian oil beyond the $60-a-barrel price cap. “We have a large population and we also, therefore, have to look at prices that will be affordable for us.”
The stance underscores the pressing need in the country of 1.4 billion people to curb inflation and spur growth amid a surprise output cut by OPEC+ and Western sanctions to rein in Russia’s oil revenue following the invasion of Ukraine. India, along with China, has emerged as one of the key buyers of Russian crude. It is now India’s top supplier, above Iraq and Saudi Arabia.
The South Asian nation needs to constantly look for the “best deal” since it imports almost 80% of its crude oil requirements, Sitharaman said. “For us, it is a very critical input for the economy.” The impact of OPEC+’s output cut fuel prices and “the spillover of all the decisions” related to Russia’s war in Ukraine are “the two main things which I think I’d be more worried about than anything internal,” she said. While Indian officials in the past said that the country was unlikely to breach sanctions on Russia, including the price cap, the stance seems to have changed after OPEC+’s recent decision. “I think we should look at it more with humanity in mind,” Sitharaman said when asked about these sanctions. “I hope the intent is not to hurt economies that have nothing to do with the war.” She added that the “unintended consequences” of these measures should not be borne by the global south.
She also said possible recessions in the US or other developed countries could drag India by hurting exports, particularly manufacturing.