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India will get a lion’s share of Russia’s coal

Rahul Gupta by Rahul Gupta
18 June 2022
in Geopolitics
Russia coal India
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Special and privileged partnerships between India and Russia are based on foreign policy priorities, historical friendship, and deep mutual trust. Despite being geographically located far away from India, Russia has always provided help in the nation’s critical situations. Although relations were mostly inclined towards military cooperation and capacity building, but the Ukraine war and associated incidents are forcing Russia to establish a different channel of cooperation with India.

India most lucrative market for Russian energy

Recent sanctions on Russia due to its special military operations in Ukraine have affected the overall business of the country. Russia largely earns through its massive source of energy exports like oil, gas, and coal.

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Heavy sanctions from western countries and their allies have affected their energy export business. According to Russian coal miners, sales of thermal coal to Europe declined to about 10-15% from 30% before the Ukraine invasion and it is going to drop even further.

In light of the situation, Russian coal miners are shipping the coal to countries like India. Despite logistical difficulties, Russia is trying to export its coal at a much-discounted price. From the earlier low volume and low price market, India is now proving to be the most lucrative energy market for Russian energy export in this difficult situation.

Read More: The Russian Oilonomics and how Putin outfoxed the Western Sanctions

India securing its energy need

Anything which negatively impacts India in overall progress is the meagre source of energy. Naturally, we have been devoid of fossil fuels due to which about 46.13% of energy consumption of the country is imported from around the world.

So, it becomes very imperative for us to develop an uninterrupted and cheap source of energy from the world. But the crude oil monopoly of the gulf and other oil-exporting countries has often resulted in manufactured price rise and associated international political realignment which provides less room for India to play its diplomatic game.

The Ukraine war is proving to be a boon for India’s energy demand. From gas to oil, and coal to fertilizers, Russia is exporting everything that India needs the most.

Already affected by the Pandemic, India was finding it very difficult to manage its USD 119 billion crude import bills. But the recent discounted crude supply by Russia not only saved billions of dollars but also provided India with an uninterrupted and reliable energy partner in the form of Russia.

The import happened at such a large scale that in about 100 days, Russia accounted for 18% of its crude import, up from the previous 1%, and became the second-largest crude source for India replacing Saudi Arabia.

Read More: India and Russia have their International Transport Corridor Ready

Moreover, the realization of the ambitious International North-South Transport Corridor and the establishment of a regular supply chain from Russia directly from Saint Petersburg to Mumbai via the Caspian Sea and Iran’s Bandar Abbas port will prove to be efficient in the long term.

Earlier impediments of the high logistical cost will turn into a cost-effective trade route, and this time demand exports business will become a permanent destination for Russian goods. Further, the coal and crude export to India will prove to be a win-win situation for both the countries as Russia will get a reliable and trusted partner for its energy export while India will get the uninterrupted energy from an all-weather friend.

 

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Tags: CoalCrude OilEnergy ExportimportsIndiaRussiaUkraine
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