When Vladimir Putin meets Prime Minister Narendra Modi this week, the stakes are likely higher than usual. Will India choose cheaper oil over a trade deal with the US, or will it find a way to balance the two sides?
We will have to wait and watch what New Delhi chooses to do when walking the fine line between the two-country diplomacy.
The upcoming Modi-Putin meeting that will be held on December 4-5 may provide India an opportunity to revisit the Russian oil equation, particularly with the heads of sanctioned Russian energy giants accompanying the Russian leader. While it’s uncertain what will be the outcome of this much-anticipated meeting, the posturing from the Kremlin hints at Team Putin taking the oil and the US challenge head-on, with maybe bigger and better deals.
According to an industry source with direct knowledge of the visit, Putin’s delegation will include the chief executives of major Russian entities such as state lender Sberbank, arms exporter Rosoboronexport, and the heads of sanctioned oil companies Rosneft and Gazprom Neft.
As per the report in Reuters citing sources close to the matter, Moscow is expected to seek India’s support in securing spare parts and technical equipment for its oil operations, as Western sanctions have cut off access to key suppliers.
The Indian government official also said New Delhi is likely to push for the restoration of ONGC Videsh Ltd’s 20% stake in the Sakhalin-1 project in Russia’s Far East.
Kremlin Press Secretary Dmitry Peskov added another layer to the conversation, calling the US tariffs on India a “bilateral issue” that does not concern Russia. He said Moscow’s priority is expanding trade volumes with India and that Putin’s visit will serve as a precursor to boosting Indian exports to Russia. On energy sanctions, Peskov labelled them “illegal,” acknowledging they have caused disruptions in Russian oil trade but insisting that any dip in volumes will be temporary and ultimately overcome.
Harsh Pant, head of foreign policy studies at the Observer Research Foundation told Reuters that recent US-Russia talks on ending the Ukraine war may give Indian officials more diplomatic room to engage Moscow.
“A large part of the trading relationship was based on energy, which is now losing traction under the threat of sanctions from the United States,” Pant said. “And at the end of the day, only defence remains, which continues to bind the two together.”
Defence Remains the Strongest Link in India-Russia Ties
Unlike crude oil purchases, India has no plans to scale back defence cooperation with Moscow, Defence Secretary Rajesh Kumar Singh said last week, noting that New Delhi still depends heavily on Russian support for several key military platforms.
Russian-made Sukhoi-30 jets form the backbone of India’s 29 fighter squadrons, and Moscow has also offered its most advanced aircraft, the Su-57 – a proposal expected to come up during this week’s talks, according to two Indian officials familiar with the matter. India has not yet decided on the jet, the officials said, requesting anonymity.
Singh added that India is also likely to discuss additional units of the S-400 air defence system. India currently operates three units, with two more pending delivery under a 2018 agreement.