India’s Ukraine – Russia Dilemma DEEPens
As the Russian offensive in Ukraine enters the 27th Day, India which has focused on evacuation of large number of students who had been caught in the war fighting now faces the dilemma of voting in the UN General Assembly which is expected to resume the Special Session on Ukraine on March 23.
While India was hopeful that key strategic partner Russia and Ukraine will negotiate to achieve a cease fire, there are no signs of the same even as Russian progress on multiple axis in the North and North East – Kyiv and Kharkiv-Sumi axes appears to have been stalled due to heavy Ukrainian resistance and inability to penetrate the urban maze of these cities and towns despite use of heavy artillery and missiles.
On the other hand, one of the Russian campaign objectives in Ukraine was to establish a land corridor from the Donbass region which includes the Luhansk and the Donetsk People’s Republic “self declared,” and accepted as such by Russian parliament - Dumas to Crimea.
There are indications that a narrow land corridor may have been achieved except for the large urban complex of Mariupol which continues to resist.
This may provide a scope for compromise but only just so.
Read more at Russian Campaign Objectives and Outcomes – March 22
Russian combat power to wage a long war of attrition in Ukraine should not be doubted wherein massive air, missile and artillery strikes will be undertaken which will result in destruction of towns and cities and cause heavy human casualties which even today are extensive.
In case the Ukraine war stretches out into a long drawn out insurgency with US and EU sanctions likely to be tightened India’s dilemma will be DEEP - Defence, Energy, Economy and Policy – foreign are the four factors which will prove challenging for India.
Here is a review-
Between the United States Department of State and Department of Commerce the latter has issued list of 91 companies which also includes some of the companies listed by the State Department and some companies based in countries such as Estonia and Singapore - Russia’s defence industrial complex is under sanctions.
India’s extensive dependence on the Russia for military technical support is well documented and may not need elaboration.
Read More on Power of Information War.
While there are limited stocks of ancillaries and spares as well as ammunition to sustain the Indian armed forces, in the case of a prolonged Ukraine war with persistent sanctions, there will be a challenge of sustaining operational readiness beyond estimated period of six to eight months.
Energy and Economy
The indirect impact of the Ukraine war is on oil and gas prices which are continuing to scale new highs with troughs in between.
As per Commodity Control.com the price of WTI oil is $ 112.19 per barrel on March 21. India’s Economic Survey 2021 - 22 is based on the oil price being $ 70-75 per barrel.
Business Standard reports that a $ 10 per barrel increase in oil price will raise the inflation by roughly 49 basis points and the fiscal deficit by 43 basis points as percentage of GDP.
The overall impact of the same on inflation can thus be gauged at a time when economic recovery post COVID 19 Omicron wave is catching momentum
Wily nilly India is forced to seek alternate measures such as buying oil from Russia at discounted rates.
On reports of India buying crude from Russia at a discounted rate, Shri Arindam Bagchi, Indian Ministry of External Affairs Official Spokesperson responded in a media conference on March 17th saying that, “India does import most of its oil requirements. So it's met by imports. So, we are always exploring all possibilities in global energy markets, because of this situation that we face of importing our oil requirement. I don't think Russia has been a major supplier. But as regards the specific query, I think it was implicit in both of them of imports of energy from Russia. Let me just highlight that a number of countries are doing so, especially in Europe, and for the moment I'll leave it at that”.
See Ukraine Geopolitical Impact on India of Oil Imports
As India leans on to Russia for cheaper oil imports with a discount, there is flak from, the United States even though energy imports have not been directly sanctioned by the US.
Another link to the economy is US sanctions on the Russian banking and financial networks. Sberbank, Russia’s largest financial institution, including 25 subsidiaries, VTB Bank including 20 subsidiaries, Bank Otkritie, Sovcombank OJSC, and Novikombank- and 34 subsidiaries, Russian Direct Investment Fund, Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation are under US sanctions.
Ensuring financial flows to Russia in terms of payments for imports of weapons and energy for instance will remain a challenge though not insurmountable.
Finally, the biggest dilemma is on the P or the Foreign Policy front.
UN General Assembly is expected to resume Special Session on Ukraine on March 23. India will have to cast a vote where humanitarian considerations, violation of the UN charter and rule of law will come into direct conflict with that of national interest in ensuring strategic partnership with Russia.
So far India has stuck to the guns so to say and while raising issues mentioned above has not directly named Russia as the aggressor.
Yet pressure on India is expected to have increased from the US and other QUAD members.
On March 21 -second bilateral summit of QUAD members happened a day apart with Australia after Japan indicating seriousness with which the grouping seeks to take the agenda forward.
One of the main issues of discussion between the Indian and the Australian prime minister has been Ukraine where some differences seem apparent.
The two leaders have expressed concern over the conflict and the humanitarian situation in Ukraine, they agreed that the conflict in Europe should not divert the Quad countries’ focus from the Indo-Pacific with the Australian PM underlining need to ensure what is happening in Ukraine never occurs in the Indo-Pacific.
Importantly the Australian Prime Minister has openly brought out Russia’s “unlawful invasion” and importance of holding Russia to account.
India continued to remain ambiguous on the Russian role in the conflict and has not called out Moscow so far. This is creating a long term reputational risk for India.
See Ukraine Crisis – India Long Term Reputational Risk
How far India will be able to sustain a policy to support Russia now remains to be seen?
Indeed, just as most of the World, India hoped firstly that the Russia Ukraine crisis never happened secondly that there will be early closure but now that the Ukraine War is dragging into a long counter insurgency with high lethality, India’s dilemma is definitely DEEPening.