While India in January was negotiating a deal to ease US tariffs, New Delhi cut purchases of Russian oil, which many saw as a painful concession to US President Donald Trump. But just two months later, Delhi and Moscow are deepening energy cooperation - both sides agree to prepare for Russia to resume direct LNG sales for the first time since Russia's invasion of Ukraine in 2022, Reuters reports, citing two sources, writes UNN.
Details
If India decides to conclude a deal that risks violating Western sanctions, negotiations could be completed in a few weeks, one source said.
Details of the negotiations, which are taking place amid soaring energy prices caused by the US-Israeli attack on Iran, have not been previously reported. An "oral agreement" on negotiations for an LNG deal was reached on March 19 during a meeting between Russian Deputy Energy Minister Pavel Sorokin and Indian Minister of Petroleum and Natural Gas Hardeep Singh Puri in Delhi, sources said.
The two officials also agreed to further increase oil sales to India, which could double from January levels to at least 40% of India's total imports in about a month, three people familiar with their discussions said.
US temporarily unblocked Russian oil sales to India to stabilize the global market06.03.26, 05:37
India has separately told its energy importers to prepare for a resumption of Russian LNG purchases, one source said. Delhi has already approached Washington about a possible waiver of sanctions, according to the source and a second person familiar with the request.
Indian Foreign Ministry spokesman Randhir Jaiswal said last week that Delhi was in talks with several countries to secure energy supplies, including LNG. Indian authorities also said they were buying batches of Russian LNG, which is mainly used for cooking and is not under sanctions.
"India has chosen a course that best served its national interests, based on a long-standing and trusting partnership with Russia," said Ajay Malhotra, India's former ambassador to Moscow. Delhi must now "demand exceptions or compromises as a normal part of negotiations between strategic partners," he added, referring to Washington.
India has become a major buyer of Russian oil, whose price has been significantly reduced since the invasion of Ukraine, which has been a point of contention with the Trump administration. The world's third-largest oil importer and consumer bought nearly $44 billion worth of oil from Moscow last year, playing a vital role in supporting the Kremlin's wartime economy.
India's state-owned refineries began ordering additional purchases of Russian oil hours before the US announced on March 5 a temporary permit for Delhi to buy some sanctioned cargoes. As oil prices continued to rise, Washington further eased restrictions.
Some Indian politicians complained that Delhi cut imports of Russian oil as a concession to the US, according to a government document seen by Reuters.
"India has cut purchases of discounted Russian oil, which could alleviate the situation to some extent," the briefing note on the Middle East crisis, prepared on March 20 for the cabinet secretariat, said.
The document warns that a prolonged interruption of oil supplies from the Middle East will cause a cascade of economic problems, "leading to higher inflation, a weakening currency and rising external debt."
Export growth could fall by 2-4%, the report warns, adding that wholesale inflation could rise by 0.3-0.7%.
Russia, which has maintained friendly relations with India since the Cold War, is using its advantage.
According to one source, any new LNG deal is likely to contain less favorable terms for India compared to the 20-year supply agreement that Indian state-owned company GAIL signed with Russian Gazprom in 2012. "It's a seller's market now," the person said.
Executives of the Russian state-owned power grid company Rosseti, who were in Delhi this month for an industry summit, also offered cooperation with their Indian counterparts in power transmission facilities, mainly in mountainous and remote areas of the country, one source said.
If a deal is reached, it will be Moscow's first step into the Indian power transmission sector.
Russia is also interested in expanding air links with India: Timofey Titarenko, head of Pulkovo Airport in St. Petersburg, told Reuters last week that he is visiting Indian airports and exploring the possibility of increasing the number of direct flights.
The Kremlin's top diplomat, Sergei Lavrov, said at a conference on Indian-Russian relations this week that 96% of trade between the two countries is currently conducted in rupees and rubles.
"The time-tested Russian-Indian friendship is an example of how interstate relations should and can be built - on the basis of equality, mutual trust and respect, and taking into account each other's interests," he said.
According to a senior executive of the Indian branch of the Russian bank Sberbank at a conference in Mumbai in March, rupee-ruble transactions worth up to $1 billion can now be processed in just one day, more than twice as fast as just a few years ago.
Russia ready to reroute oil to India due to Middle East conflict - Reuters04.03.26, 16:44