Status: 08/04/2022 1:48 p.m
After attacking Ukraine, Russia has become India’s third-largest supplier of coal. Russian oil and fertilizers are also in high demand in India.
Russia is now India’s third largest supplier of coal. India’s coal imports grew by more than a fifth from June to a record 2.06 million tons, according to data released today by Indian consultancy Coalmint. Historically, Russia has been India’s sixth largest supplier of coal, behind Indonesia, South Africa, Australia and the US, with Mozambique and Colombia alternating among the top five countries.
Because of the Ukraine war, the European Union and Japan have imposed a coal embargo on Russia. However, Russia was unimpressed and pointed to a large demand worldwide.
High discounts as an incentive
India is the second largest coal producer, importer and consumer in the world. In the past, the South Asian country has mainly imported coking coal, which is mainly used in the steel industry, from Russia. Australia is the other important supplier here. However, the deep discounts that Russian suppliers have offered Indian customers in recent months have created an incentive to buy more thermal coal.
This is mainly used for power generation. Imports of thermal coal from Russia rose 70.3 percent in July from June to a record 1.29 million tons, while imports of coking coal grew by more than two-thirds to over 280,000 tons.
Imports from Russia multiplied
India believes that the domestic central bank’s recent approval for payments for commodities in the local currency, the rupee, will significantly boost bilateral trade with Russia. Since Russia invaded Ukraine, imports from Russia have increased almost fivefold to more than $15 billion.
Because other Russian goods are also in great demand in India. The Washington Post reports that imports of fertilizers from Russia have risen sharply in recent months. Russia is now India’s top fertilizer supplier, according to Indian government data. The US Treasury Department clarified on July 14 that agricultural products and fertilizers are exempt from US sanctions. Imports of Russian sunflower oil have also risen sharply.
Oil imports increased dramatically
India is also increasingly turning to Russian oil. As the Bloomberg news agency recently reported, Russia is currently delivering around one million barrels (159 liters) per day. According to data provider Refinitiv, Russia shipped just 0.06 million barrels a day to India last year. In January and February this year, for example, India did not import any oil from Russia at all, data from commodities analysis firm Kpler shows.
Oil from Russia is also so interesting for India because the Russian state is granting price reductions, while energy prices on the world market have increased significantly in some cases.
How much is Russia’s economy suffering?
The extent to which the sanctions imposed by the western world are damaging the Russian economy against the background of trade with other regions of the world is currently the subject of widespread debate. A study by the Yale School of Management recently painted a catastrophic picture of the Russian economy. The sanctions imposed by Western states since the beginning of the invasion of Ukraine “not only worked” but “thoroughly paralyzed the Russian economy at all levels.”
Moscow always emphasizes that the sanctions are painful cuts. But they harmed the authors more than the Russian economy.