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Context: 

India has warned against "double standards" in response to a US bill, the Russian Sanctions Act of 2025, which proposes 500% duties on countries that purchase Russian oil, including India.

INDIA'S STANCE ON WESTERN SANCTIONS AND ENERGY SECURITY

Why is the United States proposing sanctions against countries buying Russian oil?

The United States proposes sanctions to exert economic pressure on Russia due to its conflict in Ukraine. The goal is to limit Russia's revenue from oil and gas sales, which funds its military.

The Russian Sanctions Act, 2025  

Key Sanction => Imposing 500% ad valorem duty (a duty based on the value of the goods) on countries that buy, sell, or transfer Russian oil, uranium, natural gas, petroleum products, or petrochemical products.

Presidential Power => Empower U.S. President to waive the duties for a period of six months. 

President Trump's Support => Also threatened imposing 100% secondary tariffs on countries that continue trading in sanctioned Russian products.

How does India officially respond to these potential sanctions and threats?

Ministry of External Affairs (MEA) Stance => MEA spokesperson emphasized, "Securing the energy needs of our people is an overriding priority for us." India makes its energy procurement decisions based on what is available in the global markets and the international circumstances.

Union Petroleum Minister's View => India will "deal" with the sanctions if the USA passes. He highlighted that India has diversified its oil supply sources. Now buys oil from about 40 countries, an increase from 27 countries in the past.  

Why did India accuse the USA for "double standards"?

The Allegation => India argues that while some Western countries criticize India for buying Russian oil, they themselves continue to engage in energy trade with Russia.

Justification:

• EU's Continued Purchases => Despite imposing sanctions on Russia, European Union members continue to purchase Russian oil, Liquefied Natural Gas (LNG), and pipeline gas.
• EU Buying Refined Russian Oil from India => The EU is also a major buyer of processed oil products that originate from Russian crude oil but are refined in India.
  • For example, India's Nayara Energies, which has minority control by Russia's ROSNEFT, processes Russian crude, and its products are then sold to EU countries. This implies that the EU indirectly benefits from Russian oil through Indian refining.
• Russia sells about half its oil exports to China, and about 38% to India (as of February 2025), it exports about 6% to EU countries.

INDIA-RUSSIA TRADE RELATIONS  

How has India and Russia's trade relationship changed over time?

Cold War Era (Before 1991) => India and the Soviet Union established a special payment system, the "Rupee-Rouble mechanism," in 1953. This system allowed them to trade directly using their own currencies, bypassing U.S. dollars.

Post-Soviet Period (1990s-2010s) => India and Russia established a Strategic Partnership Declaration in 2000, which they elevated to a Special and Privileged Strategic Partnership in 2010. This showed their commitment to a deeper relationship.

Current Phase => Bilateral trade grew to over US$65.6 billion in FY 2023-24. India's increased oil imports from Russia largely drive this growth. Both nations aim for a record high of US$100 billion in trade by 2030.

What are the key Items India and Russia trade with each other?

Energy Cooperation

• Crude Oil => India Import about 40% of its crude oil from Russia. India benefits by receiving discounted oil from Russia.
• Nuclear Energy => History of cooperation in nuclear energy. The Kudankulam Nuclear Power Plant in India.
• Other Energy Imports: India also imports significant amounts of coal, liquefied natural gas (LNG), and fertilizers from Russia.

Defense Cooperation => India has purchased advanced systems like the S-400 Triumf air defense system from Russia.

Indian Exports to Russia => Pharmaceuticals (medicines), organic chemicals, electrical machinery, and agricultural products like fish, shrimp, rice, tea, and coffee. India exports high-tech components, filling gaps left by Western companies that exited the Russian market.

Russian Exports to India => Fertilizers, precious stones, metals, machinery, and vegetable oils to India.

What challenges do India and Russia face in their trade relations?

Trade Imbalance => India imports much more from Russia, than it exports. 

• In 2023-24, Indian exports amounted to US$ 4.26 billion while imports from Russia amounted to US$ 61.4 billion.

Western Sanctions and External Pressure => Caution among Indian banks when facilitating transactions with Russia.

Non-Tariff Barriers => Indian exports, especially pharmaceuticals and agricultural products, sometimes face non-tariff barriers in the Russian market.  

Logistics & Connectivity => Full operationalization of the International North-South Transport Corridor (INSTC) is still underway. This multi-modal transport network is designed to improve trade efficiency but its incomplete status impacts speed and cost.

What steps should India take to strengthen its trade relationship with Russia?

Addressing Trade Imbalance => Boost its exports to Russia and ensure sustainable trade flows.

Strengthening Payment Mechanisms => India must develop a reliable local currency trade system to mitigate external pressures.

Enhancing Connectivity => Prioritizing the speedy completion and effective utilization of multi-modal transport corridors like INSTC.

Diversifying and Deepening  => India should explore new sectors for cooperation beyond traditional areas, focusing on technology, innovation, and joint production.

Must Read Articles: 

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About India's Crude Oil Imports Shifted 

About Sanctions And Impact On Economy 

About US Sanctions 4 Indian Firms 

Source: THE HINDU