India Should Buy Discounted Russian Oil, Commodities
The Government has estimated that due to the current geopolitical upheavals, India’s import bill is likely to rise by Rs 38000 crores in the fiscal year starting in April.
Therefore it has started looking for cheaper raw materials from wherever it can. Russia and Belarus are our close friends and we need not hesitate for even a second, if they offer oil and fertiliser at cheaper rates.
The cost of Government subsidy programme has already rocketed. The government, which has already doubled its subsidy bill for the fiscal year to the end of March 31, allocated a further 149 billion Indian rupees on Monday.
The government expects the fertiliser subsidy bill to rise by at least 200 billion to 300 billion rupees in the next financial year, from the current estimate of 1.05 trillion rupees.
“If we can get cheaper fertiliser from Russia then we will take that. It would help in easing some fiscal concerns,” one official said.
India should also take up the Russian offer to buy its crude oil and other commodities at discounted prices with payment via a rupee-rouble transactions. This will also help our friend Russia amid tough Western sanctions over Ukraine.
India, which imports 80% of its oil needs, usually buys only about 2% to 3% of its supplies from Russia. But with oil prices up 40% so far this year, the government is looking at increasing this if it can help reduce its rising energy bill.
Russia is the most sanctioned country by the USA and its allies, outranking Iran and North Korea due to its war with Ukraine. This will certainly impact the global economy and may have short term impact on even the Indian economy? We cannot sit idle and let others dictate to us as per their whims and fancies. India Must be ready to defend its National Interest from any predator.
“Russia is offering oil and other commodities at a heavy discount. We will be happy to take that. We have some issues like tanker, insurance cover and oil blends to be resolved. Once we have that we will take the discount offer,” one of the Indian government officials said.
Some international traders have been avoiding Russian oil to avoid becoming entangled in sanctions, but the Indian official said sanctions Can not prevent India importing the fuel. We too can counter SANCTION any one trying to coerce us.
Work was ongoing to set up a rupee-rouble trade mechanism to be used to pay for oil and other goods, the official said. How much oil was on offer or what the discount was is still not known.
Russia has urged what it describes as friendly nations to maintain trade and investment ties. India has longstanding defence ties with Russia and abstained from a vote at the United Nations condemning the invasion, although New Delhi has called for an end to the violence.
Russia’s Surgutneftegas has already allowed Chinese buyers to receive oil without providing letters of credit (LC) payment guarantees in order to bypass sanctions, sources told Reuters.
