By Sanjeev Oak

The renewed talk in Washington of tightening secondary sanctions on countries trading with Russia has revived concerns over India’s oil dependence. Yet, India’s energy strategy reflects not defiance but a calibrated pursuit of security, stability, and diversification in an increasingly fragmented global energy landscape.

The United States has signaled its intent to enforce secondary sanctions more stringently against entities facilitating Russian oil exports above the G7 price cap. The move, designed to curb Moscow’s revenue streams, extends the sanctions’ reach to non-U.S. firms engaging indirectly with Russian suppliers.

While the measure is not specifically targeted at India, it has implications for countries that have expanded purchases of Russian crude since 2022. India’s refiners — notably Indian Oil Corporation, Bharat Petroleum, and Reliance Industries — have benefited from discounted imports that have helped stabilize domestic fuel prices and control inflation.

India’s Energy Imperative

India’s energy dependence is substantial. The country imports nearly 85 per cent of its crude oil requirement, making affordability and reliability central to policy design. Russian supplies, which rose from less than 2 per cent of total imports in 2021 to nearly 40 per cent in 2023, provided crucial cost relief amid global volatility.

The fiscal benefits were tangible. Cheaper Russian crude translated into savings estimated at over $3 billion annually, contributing to macroeconomic stability. This underlines why India views energy policy primarily through the lens of economic security, not alignment politics.

“Energy policy is not a geopolitical instrument; it is an instrument of development,” a senior official recently remarked.

Sanctions and Sovereignty

India’s position on sanctions has remained consistent. New Delhi recognizes only those measures endorsed by the United Nations Security Council. Unilateral restrictions, it argues, lack legitimacy under international law.

Moreover, the effectiveness of the G7 price cap itself is being questioned. Russia has reoriented its export channels toward non-Western buyers, often using alternative shipping and insurance arrangements beyond the control of Western regulators.

In this evolving framework, India’s energy trade continues under lawful commercial arrangements, supported by rupee-based settlements and greater engagement with the UAE, Saudi Arabia, and African producers.

Policy Diversification as Shield

The Government’s long-term energy planning has already accounted for such external risks. India is investing heavily in refining capacity — expected to reach 260 million tonnes by 2026 — and expanding strategic reserves. Concurrently, initiatives to source oil from Latin America and Africa, coupled with a gradual push toward renewables, are building a structural buffer against geopolitical shocks.

The Reserve Bank’s move to facilitate trade in local currencies and the growing acceptance of the rupee in select transactions further insulate Indian trade flows from the financial reach of Western sanctions.

A Changing Global Energy Order

India’s position also reflects a broader trend across the Global South. Countries such as Indonesia, Brazil, and South Africa are increasingly prioritizing energy autonomy over adherence to geopolitical expectations. The fragmentation of energy markets has eroded the leverage once held by a few dominant players — whether OPEC or Western financial institutions.

In this sense, India’s approach represents adaptation rather than confrontation. It demonstrates how emerging economies are rebalancing between affordability, sovereignty, and environmental transition in a multipolar order.

A Policy of Resilient Pragmatism

Secondary sanctions, if implemented aggressively, could complicate India’s commercial engagements but are unlikely to alter its fundamental policy direction. New Delhi’s approach remains rooted in pragmatic diversification and long-term stability.

India’s challenge is to maintain this balance — ensuring that strategic autonomy in energy does not translate into vulnerability elsewhere, whether in trade, finance, or diplomacy.

The test, as always, will lie in policy coherence: securing affordable energy while sustaining global partnerships without compromising sovereignty.