In recent years, Prime Minister Narendra Modi, External Affairs Minister S Jaishankar, and Foreign Secretary Harsh Vardhan Shringla have forcefully expressed India’s commitment to a rules-based international order. Now sovereignty and territorial integrity of Ukraine has been violated by Russia, but so far India is only ‘disturbed’ by developments, and abstained in the United Nations Security Council resolution against Russia.
So long as Russia and the West were only engaged in a geopolitical posturing, ambivalence by India was understandable. After all, India has a time-tested and trusted partnership with Russia. Its military is still heavily dependent on Russian imports. Similarly, ties with the United States and Europe have now become strong, particularly in the context of assertive China and India-China tensions.
Russia may have reasons to worry about NATO expansion in its neighbourhood. Its concerns about the Russian-speaking population in the Donbas region could be genuine. The US may have orchestrated Ukraine’s orange revolutions in 2004, and helped maidan revolution in 2014. So, Moscow’s attempt to assert its role in the European security architecture is also understandable. This, however, does not give Russia an authority to declare two of Ukraine’s provinces, Donetsk and Luhansk independent republics, and attempt regime change through direct military intervention and war.
Many of the defence purchases from Russia, including the S-400 missiles, are crucial for India’s military modernisation. Still, India cannot continue to take an ambivalent position for very long. A large number of its own young citizens have been put at risk by Russian action. Russia may have praised India’s stand, but many in the US and Europe are disappointed. After all, India cannot keep on repeating rules-based order in the Indo-Pacific and avoid taking a position when the same rules are violated by a friendly country.
To cripple the Russian economy, the West has announced a comprehensive set of sanctions. These include removal of selected banks from the SWIFT system, and restricting use of $630 billion foreign exchange reserves by the Russian Central Bank. Sanctions are also announced against its high-tech industries and oligarchs. These measures are to cripple the Russian economy, accelerate the Ruble’s slide, and what European Commission President Ursula von der Leyen said, “paralyze the assets of Russia's central bank” and “block Russian imports and exports”. The EU sanctions are targeted towards financial, energy and transport sectors, export controls, and visa policy. For the first time ever, the EU will also provide €500 million military aid to Ukraine.
Though former Russian President Dmitry Medvedev might have said that sanctions “would not change a thing”, it will start hurting Russia soon. They will also surely affect its economic ties with its main partners, including with Europe and India. Sanctions will also hurt Europe as it has a $200+ billion trade with Russia, and is heavily dependent on Russian gas and oil. Despite this mutual dependence, sanctions are announced and Germany has halted operationalisation of the Nord Stream 2 gas pipeline. Many of these sanctions are likely to continue even if Russia is able to implement its regime change project in Ukraine. This is likely to re-orient Russia further towards China.
India-Russia trade is only about $10 billion a year. But major defence deals are in the pipeline. Due to the Ukraine war, stock markets are volatile and oil prices are hovering around $100 per barrel. Depending on how the SWIFT cut-off is implemented, it could affect energy and metal markets as well as Indian pharmaceuticals, mobile phones, and tea-coffee exports to Russia. As India and Russia have a long history of trading in local currencies, they may work out a bilateral mechanism, but some disruptions are likely. Since we also import a large part of our sunflower oil from Ukraine, there could be supply disruptions.
India is in a difficult situation. Strategic and economic consequences of the Russia-Ukraine war will be felt over years on our relations with Russia and the West. Being in the UNSC, New Delhi also has to take positions on developments immediately. As the situation unfolds, India may not be able to ‘abstain’ for very long. There is a clear violation of basic principles of a rules-based order, which India champions. Moreover, India’s long-term strategic and economic objectives are likely to be more in line with democracies in the West, and in the developing world rather than with an alliance of autocrats led by China.
Gulshan Sachdeva is Professor at the Centre for European Studies and & Coordinator, Jean Monnet Centre of Excellence, Jawaharlal Nehru University. Views are personal, and do not represent the stand of this publication.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
