Explained | What is the status of India’s oil, defence purchases from Russia?

How is India circumventing the sanctions route to ensure supplies are not stopped? What is in the pipeline? 

The story so far: The last two weeks saw a flurry of visits by senior officials from the West to convince India not to undermine sanctions on Russia by opting for payments in national currencies as also not to increase purchase of discounted oil from Russia. On Friday, Russian Foreign Minister Sergey Lavrov was in New Delhi, the first high-level visit since the start of the Russian offensive in Ukraine.

“We have started buying Russian oil and have bought at least three to four days of supply,” Finance Minister Nirmala Sitharaman said on Friday. Mr. Lavrov reiterated that Russia is moving ahead with the use of national currencies in lieu of dollar payments with both India and China and these efforts would be “intensified”.

“I have no doubt that a way would be found to bypass the artificial impediments which illegal unilateral sanctions by the West create. This relates also to the area of military and technical cooperation. We have no doubt that the solution would be found and respective ministries are working,” Mr. Lavrov said, addressing a press conference after bilateral talks with his Indian counterpart S. Jaishankar.

The developments came a day after the U.S. Deputy National Security Adviser for International Economics Daleep Singh warned of “consequences” to countries that actively attempt to circumvent or backfill the sanctions.

In sharp comments on Thursday during a conversation with visiting U.K. Foreign Secretary Liz Truss, Mr. Jaishankar termed it a “campaign” against India for buying Russian oil at discounted prices while European countries remain the biggest buyers of oil and gas from Russia despite their announcements to scale it down.

India and Russia have been working on streamlining payments through the rupee-rouble mechanism circumventing the SWIFT system and the dollar route. Towards this, earlier in the week, a team from Russia’s central bank met officials from the Reserve Bank of India to iron out issues and identify banks that have no exposure to the Western sanctions through which payments can be made. Mr. Jaishankar informed Parliament recently that a special inter-ministerial group led by the Finance Ministry has been tasked with resolving payment issues for trade with Russia.

According to Reuters, India bought at least 13 million barrels of Russian oil since the Ukraine war began on February 24, a steep rise from last year, when India bought 16 million barrels of Russian oil in all of 2021.