What Does the Russia-Ukraine War Mean for India in the Long Term?
Jagannath P. Panda
This article was originally posted on TRENDS Research and Advisory’s website, you can find the article here.
Russia’s aggressive attack on Ukraine has ignited one of the worst battles in Europe since World War II. The so-called “special military operation” against Ukraine, which has been ongoing for almost eight months, has been steadily hampered by the global economic, geopolitical, and humanitarian problems already caused by the COVID-19 epidemic. An important aspect of Russia’s geopolitical conflict with the West has been its ability to win varying degrees of support or maintain silence in the Global South. Along with authoritarian nations like China, Iran, and North Korea, Russia has maintained positive ties with India, a sizable democracy and ally of the West. In this context, what are the long-term implications of the catastrophic war on the relationship between Russia and India? How does that affect India’s attempts to communicate with Europe? And is India positioned to gain from Europe’s waning fascination with China?
Russian President Vladimir Putin’s “unprovoked and unjustified” full-scale land, sea, and air attacks have violated not only Ukraine’s territorial integrity and sovereignty but also the United Nations (UN) Charter. It has led to immediate and immense loss of lives and livelihood, infrastructure damage, food insecurity, energy insecurity, supply chain disruptions, and the destabilization of world order marked by increased ideology-based polarization (democracies versus autocracies), as well as a divide between the Global South and the West. After nearly eight months of the so-called “special military operation” in Ukraine, the toll on global economic, geopolitical, and humanitarian crises, which were already impacted by the COVID-19 pandemic, has been consistently rising.
As one of the most disruptive conflicts witnessed in Europe since World War II (WWII), the human and material cost of the war will only keep growing as Russia continues to pursue its long war of attrition – with Putin escalating the war by ordering Russia’s first public mobilization since WWII and warning about the future use of nuclear options (calling the threat “not a bluff”). At the same time, these tactics are in part aimed at covering the significant Russian military casualties and Ukraine’s successful military counter-offensive, but are largely a political move eyeing to capitalize on war-weary Europe, which is battling with high inflation and an energy crisis, and gain an upper hand if and when negotiations start.
Notably, a crucial aspect of Russia’s geopolitical war against the West has been its ability to drum up varying levels of support or maintain silence in the Global South. For example, Russia has managed to sustain its rapport with not just the authoritarian states of China, Iran, and North Korea, or China-dominated blocs like BRICS (Brazil, Russia, India, China, South Africa) and the Shanghai Cooperation Organization (SCO), but also with India – the world’s largest democracy and Russia’s crucial multilateral partner. The reasons are manifold and include effective use of Russian propaganda networks to exploit the existing divisions in the developed versus developing world; the historical tilt toward non-alignment; and importantly, dogged pursuit of national interests owing to long-standing ties and dependencies on Russian energy, arms, and food grains.
Amid the ramifications of this catastrophic war, what are the long-term implications for the Russia-India relationship? How will India’s outreach in Europe be impacted? And will India be able to capitalize on China’s loss of allure in Europe?
Humanitarian, economic, and political repercussions: A brief overview
- About 14 million people have been displaced with warnings of Ukraine imminently “freefalling” into poverty.
- As of mid-October, the Office of the High Commissioner for Human Rights recorded 15,908 civilian casualties, though the actual figure could be significantly higher.
- The Independent International Commission of Inquiry on Ukraine has concluded that an array of war crimes as well as violations of human rights and international humanitarian law, have been committed in Ukraine.
- Due to food and fertilizer shortages, vulnerable populations in underdeveloped countries, already severely hit by climate change, drought, or instability, are the worst-affected.
- Attacks on, or near, nuclear sites like the embattled Zaporizhzhia nuclear power plant are liable to have catastrophic consequences.
- As per the Organization for Economic Cooperation and Development (OECD) estimates, the war will cost the global economy about US$2.8 trillion.
- Acts of sabotage against critical civilian infrastructure (e.g., Nord Stream pipelines) have added to Europe’s energy and economic woes, apart from having potential security implications because of the vulnerabilities of critical systems.
- Surging inflation, shortages and sharp rises in food and energy prices, and disrupted supply chains have weakened household spending and undermined global markets, not just in Europe.
- Defense funding across major countries is likely to go up as a deterrence measure against not just Russia but also China – the US, Japan, France, and Germany have already scaled up budgets. This has strengthened concerns of an arms race in the Indo-Pacific, especially following the 20th Communist Party of China (CCP) Congress wherein Xi Jinping’s record coronation and loyalty promotions have sealed the region’s fate.
- The war is also fueling the rate of cyberattacks targeting critical infrastructure as well as increased technological innovation in state-sponsored hybrid warfare, which will impact future conflicts.
Long-term impact on India’s interests with Russia
Despite Prime Minister Modi’s apparent indictment of Russia (“Now is not the time for war”) during the SCO meeting, India’s fundamental strategic position on the Ukrainian war, comprising hedging, neutrality, stress on dialogue, and abstentions in international forums, including at the UNSC, has not altered by much. India also does not appear to support the Western sanctions against Russia, primarily because of their impact on the India-Russia oil and arms trade.
India’s bilateral trade with Russia reached an all-time high of about US$18,229 million during April-August (2022-23), largely due to a significant uptick in the import of oil and fertilizers. India is not keen to embrace the cap on Russian oil exports endorsed by the Group of Seven (G7) in September to reduce Russia’s wartime revenue. However, India recently agreeing to mull over the proposal is a slight change from its earlier dismissal of the price cap in defense of its energy security needs. As a result of India’s unapologetic steadfast ties with Russia, India is facing stringent criticism by the West for “negating” the transatlantic countermeasures against Russia and indirectly funding Russia’s war.
Diversifying oil trade
Nonetheless, the longer the war stretches, the worse its economic and political impact will be on India. Importantly, the upsurge in oil trade with Russia is a short-term solution to India’s long-term requirements. The strengthened Western sanctions regime will shrink India’s options further, especially as the question of India as a responsible emerging power evading the moral onus becomes more compelling.
For now, India is particularly concerned about the impact on its energy industry’s tie-ups with Russian counterparts. For example, Indian state-owned firms such as ONGC Videsh, Bharat Petroresources, Indian Oil Corporation, and Oil India have invested US$16 billion in Russia, including in the Far East and East Siberia; and sanctions like import bans may constrain future cash flow generating capacity.
Geopolitically, India has to take into account Russia’s growing ties with China and the already unstable border situation with both China and Pakistan. Washington’s US$450 million F-16 fighter jet deal with Pakistan has only made matters worse. Therefore, the decision to join the US-led oil cap coalition will be influenced by the regional geopolitics along with Russia’s ultimatum on revoking oil supply to price cap supporter states, which would in turn push prices higher.
In addition, India’s next steps will also be affected by the decision of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to slash oil production by 2 million barrels a day to boost prices. The US has called the move “short sighted” and accused the group of colluding with Russia, in view of the “riskier” (e.g., increase in market volatility and a backfiring of the original G7 reasoning) impact on the G7-proposed price cap agreement. India has accepted the OPEC cut as the bloc’s “sovereign” decision, but has warned of “intended and unintended” consequences.
Further, against such a disruptive scenario, India – which imports nearly 85 percent of its fuel requirements – has already accelerated its efforts to diversify its crude oil import sources (e.g., Brazil, Guyana, Gabon, Colombia, and Canada as alternatives) following the Ukraine war-induced energy security crisis. India has also signed long-term pacts with Columbia and Brazil, and stepped up domestic exploration and production of oil and gas.
Revising defense imports
Similarly, India has been diversifying its arms import sources to reduce dependency on Russia, which accounted for 66.5 per cent of India’s arms imports during 2000-2020. However, India is still heavily dependent on Russian-made or designed equipment – from submarines to fighter aircraft. India has also signed a US$681 million deal with Russia to jointly manufacture AK-203 assault rifles under Modi’s “Make in India” initiative, and a US$3 billion deal to lease another nuclear-powered attack submarine (Chakra III) for a period of 10 years (expected delivery by 2025). Importantly, India has already received the first unit of the five Russian-made S-400 air defense systems (the second has been delayed due to the war) per the controversial US$5 billion arms deal with Russia, which could trigger US sanctions at a time when Washington is decidedly tough on support to Russia.
Nonetheless, over the last few years there has been an overall drop in imports from Russia due to Russia’s complex and lengthy procurement processes, India’s diversification attempts to reduce the chances of being used as leverage, and its ambitious self-reliance plans to produce its own major arms. As a result, India has revitalized defense deals with multiple partners like the US, Japan, Israel, Australia, Vietnam, and France in recent years.
Notably, amid India’s efforts at indigenization and digitization, the government has opened up foreign direct investment (FDI) up to 74 per cent (automatic route) and up to 100 per cent (government route). Consequently, in an era dominated by critical technologies, India will continue to favor partners that offer “access to modern technology.” Hence, the US, Israel, and the European Union (EU) will have an advantage over Russia.
RIC’s static relevance
India’s and China’s unwitting tacit support of Russia in the Ukraine war has brought the spotlight back on the largely ineffective Russia-India-China (RIC) trilateral. The China-Russia February joint statement included the RIC as part of its multilateral policy agenda to strengthen interactions within regional forums, reiterating its importance to both Russia and China.
Notably, although both China and India have not been overtly interested in expanding cooperation through the RIC because of their obvious hostility, China’s “new era” plans of changing the world order and India’s centrality in the West’s Indo-Pacific strategy have rekindled interest in the format. At the same time, the RIC is unlikely to suddenly revitalize, à la the Quadrilateral Security Dialogue (Quad), but it will continue to plod along through regular high-level official briefings.
Will India’s long-term outreach in Europe be impacted?
While it is true that India’s unapologetic arms and oil trade with Russia has caused widespread consternation among Western strategic circles, India’s essential democratic core, its vote in favor of the Ukrainian President’s participation in the United Nations (thus voting against Russia), and Modi’s recent official questioning of Putin’s war ethic won some brownie points in Europe. Moreover, following the European Commission President Ursula von der Leyen’s optimistic India visit in the midst of the war, which expanded the scope of cooperation including defense, emerging technology, trade, and green energy, belied the strain in bilateral ties projected in the Western media.
The launch of the EU-India Trade and Technology Council (TTC) was the high point, especially as this is India’s first-ever TTC. This will help deepen strategic engagement in a wide array of urgent challenges including resilient supply chains, digitization, climate action, and global health. The EU-India free trade agreement (FTA) is also on a steady negotiation path. Moreover, political and defense ties with member states like France and Germany are on the rise.
Above all, India’s concerted outreach to several European states be it via Modi’s telephonic conversations to multiple nations during the initial days of the war or his trip to Europe in mid-2022 (three-country visit and the second Nordic summit) has indicated India’s intent to maximize on their universal values-based rhetoric (e.g., democratic ideals and equity-centered policies) through practical and developmental cooperation.
A gradual converging stance on China is another commonality. Despite the EU’s current official policy toward China as a partner, competitor, and rival, the EU has been cautiously distancing from China due to (1) its close ties with Russia; (2) concerns over creating unfeasible dependencies in the long run; and (3) an inward-looking Chinese economy, especially under the shadow of the CCP 20th Congress that has strengthened Xi’s ideological hold over all party-state policy matters. China’s foothold is “crumbling” even in economically weak (also politically restive) Central and Eastern Europe (CEE), where China, hoping to gain dividends by stoking European divisions, was once gaining ground with its flagship 16+1 initiative (now 14+1). However, although India seems well-positioned to benefit from China’s declining share in Europe’s calculus, it is still early days for India, whose influence is incomparable with China’s. India is yet to formalize its strategy in the CEE, for example, let alone take advantage of the development vacuum.
As regards India’s ties with Ukraine, India must follow through on its promises of contributing to the peace efforts; at this juncture, it is unlikely that India will suddenly indict Putin for his wrongdoings or alter its policy of not importing cheaper oil. For now, India has dispatched several consignments of humanitarian aid, comprising essential medicines and equipment, to Ukraine.
It is expected for India to play a sizeable role in Ukraine’s post-war reconstruction efforts; the recovery planning process has already started despite the ongoing war. However, the scope and cost of the rebuilding is increasing by the day; as of September, the European Commission, in collaboration with other partners, estimated the cost of reconstruction and recovery in Ukraine at US$349 billion. As the EU’s strategic partner, with long-standing developmental experience in Asia, India would be a credible partner in this huge task. India should also jointly work through multilateral institutions at strengthening the post-war democratic setup in Ukraine.
Overall, whether India – which lacks China’s massive resources or clout – is able to make good on China’s losses and project itself as a veritable partner in the future will depend on India’s ability to capitalize on not only its economic growth but also its growing centrality to the geopolitical dynamics in the wake of the Ukrainian war. An inflexible or defensive stance solely based on Russia’s historically steadfast support of India amid the West’s indifference or Europe’s colonial past, which have often become the reference points for Indian diplomacy this year, would hardly serve India’s foreign policy realpolitik wherein national interest and power projection trump didactic concerns.
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