India is the world's largest democracy with more than 1.3 billion inhabitants. We are
talking about an ally of the United States, an increasingly important
ally. And perhaps that is why during the Shanghai Cooperation Organization forum,
Indian Prime Minister Narendra Modi reproached Putin for his intervention in Ukraine.
(Indian PM Modi tells Russia's Putin now 'is not an era of war' – Reuters)
At the same time, however, on a day-to-day basis,
India has not joined the sanctions against Russia. And what’s more, take note of this.
N1(India's Russian oil imports jump over 50 times since April. Business-Standard)
(India imports 50 times more Russian oil since April)
You heard correctly! As soon as the Russian invasion of Ukraine began,
India started buying Russian oil like there was no tomorrow... and we're not talking
about a slight increase: almost 50 times more dinosaur juice than they were importing before.
Obviously, India is not the only country that has ignored economic sanctions.
Remember that oil is the basis of the Russian economy. If all countries stopped buying oil
from Russia, they would struggle to be able to continue the war in Ukraine.
In other words, the fact that India has bought so much oil from Russia,
virtually overnight... could be a real lifeline for Moscow…
Or maybe not? But do you know what is the most curious thing of all? That despite all this,
India continues to strengthen its ties with the United States,
you don’t believe me? Well, pay attention. N2(US Seeking Increased Arms Sales With India
Amid Russian Sanctions. – The Defense Post) I know, your heads have exploded, haven't they?
To give you an idea, since the Ukraine War started, Joe Biden has met twice with his
Indian counterpart: Narendra Modi. And in both cases, Biden has said the same thing:
"Oh, Narendra Modi... Buying oil from Russia is so bad! Do you think it's nice? Don't you
see what Putin is doing in Ukraine? I think it's so wrong! But go ahead,
here’s $500 million so you can buy guns... But you don't deserve it!"
Literally: The United States is preparing a $500 million military aid package for India.
(US Seeks to Wean India From Russia Weapons With Arms-Aid Package
N3 Potential $500 million deal would put India near Israel, Egypt
India is the largest buyer of Russian made military hardware. – Bloomberg)
And all this, despite the fact that India is ignoring the sanctions against Russia.
And the question is, why is India supporting Russia in this war? Could India really save
the Russian economy from Western sanctions? And more importantly, why, despite all this,
does the US continue to collaborate with India on such important things as defense?
Today we are going to answer these questions but first... let's look at a bit of history.
(TITLE1: BETWEEN TWO WORLDS) Since 1955, India has belonged to
the third world. Literally. The term "third world" came into use at the Bandung conference in 1955.
At this conference, all the countries that did not want to take sides in the Cold War came together.
If the capitalist bloc was the first world, the communist bloc the second world... they would be
the third world. On this list were countries like Indonesia, Yugoslavia and... India!
Think about it: after independence, India had a hybrid system between the two big blocs.
Politically, India is a liberal democracy like any other Western country. However,
from an economic point of view, India is far from capitalism. In many cases,
they have even had five-year plans. In other words, it was a country fated to
be on good terms with the two blocs. What’s more, unlike the West,
the Soviet Union was always on India's side on key issues for India. For example, in all UN votes,
they have always supported India in its conflict with Pakistan over Kashmir.
In this respect, the United States has a much more ambivalent position. And what
about India's nuclear program? In 1974, India made the first test of its nuclear bomb. The
United States responded with economic sanctions. Russia, however, began supplying India with heavy
water and nuclear advice. But wait a minute because
it's not just about diplomacy! We are also talking about weapons.
And, believe me, this is the fundamental pillar of India-Russia friendship.
To give you an idea, as of 2016, 69% of India's arms imports came from Mother Russia.
Naturally, as a good non-aligned country,
New Delhi has also purchased arms from other countries, including the United States. However,
its main supplier by far is Russia. And why, you may ask?
Well, the main reason is... Because they are cheaper! Plain and simple:
Russian weaponry may have many flaws... but as far as price is concerned, it is super competitive.
And as you can imagine, we are not only talking about weapons but also about parts
to repair them. Eighty percent of the Indian arsenal's spare parts come from Russia.
And the list goes on. We can also talk about the energy sector. Yes, it
is true, India hardly uses gas in its energy mix. Only 6% of India's electricity comes from gas.
However, in 2019 the Indian government and the Russian state-owned company ROSATOM reached
an agreement of intent to build at least six new nuclear reactors. At the moment,
the Russian company is building the fifth and sixth reactors at the Kudankulam power plant,
one of the country's main power plants.
In other words: relations between India and Russia have always been very close. In fact,
6 out of 10 Indians support their government maintaining ties with Moscow... despite
the war. Now, are we talking about committed support... or simply economic interest? Well,
let's take a look at that right now. T2(ONE STEP EAST, TWO STEPS WEST)
In 2014, Narendra Modi became the Prime Minister of India. But who is Narendra
Modi? What is his ideology? You could say that Modi is a populist leader,
very nationalist and absolutely popular among his citizens.
To give you an idea, his party holds more than 60% of the seats in the
lower house. And what ideology does this man profess? Well, to summarize,
we could say that Modi's program is based on 3 pillars: on the one hand we have
ultra-nationalism. Next to Narendra Modi, Donald Trump would look like a tree-hugging greenie.
The second pillar of his government is technocracy: Modi came to power with the
promise of ending India's hyper-bureaucratization. Well... let’s just say the results are debatable.
However, the third pillar of the Modi government is none other than... Closer ties with the West!
And, believe me, in this regard, Narendra Modi's diplomacy has been quite enlightened.
Despite being more Trumpist than Trump himself,
Modi was a personal friend of Barack Obama's. What's more, Obama went so far
as to write a profile for TIME magazine where he seemed to declare undying love for the man.
Not surprisingly, during the Trump administration, New Delhi and Washington got along flawlessly.
And you will say... but beyond the words, what does it mean to "get closer to the West"? Well,
among other things, it means making all kinds of security alliances.
It’s very simple: to defend itself against one of India's greatest adversaries. Who am I
talking about? Pakistan? NO! Another much more powerful and much more fearsome one: China.
That explains, for instance, why INDIA is part of the QUAD: a strategic alliance that
includes the United States, Australia, Japan and India. But... once again, we are not only
talking about diplomacy: we are also talking about facts. More specifically... weaponry!
Let's be clear: Russian weapons are cheap because they miss more than an amusement
park shotgun. If you have any doubts, just take a look at Ukraine or watch the
VisualPolitik video dedicated to the Russian military industrial complex.
As you can imagine, with such a flawed arsenal, it is difficult to deter an
increasingly powerful China. India needs to be able to call on Western weaponry. And,
believe me... in this regard, Modi is not wasting any time. Take a look at this chart.
To give you an idea; prior to 2016, almost 70% of arms imports came from Russia. Now
they are less than 30%. France is already selling them RAFALE and MIRAGE fighter jets.
And I know what you're all thinking: Didn't we say that US weapons are very expensive? Yes, they
are. They are very expensive. And India doesn't have that kind of money, so what's the solution?
The solution consists, for example, in creating joint ventures with Indian companies. That is,
an American manufacturer signs an agreement with an Indian manufacturer to work together to produce
an aircraft with many cost savings and while perhaps more limited than the US versions, much
more effective in any case than the Russian ones. So, what is the problem with this type of
agreement? The problem is that India is still a highly centralized country:
the arms industry is dominated by hyper-bureaucratized state-owned giants.
Companies such as Hindustan Aeronautics Limited. And that explains why, in 2020, Modi opened the
door to foreign investment, which can now have up to 74% ownership of an arms company. And,
believe me, this measure is already starting to take effect. Listen up.
N4(Lockheed Martin and Tata Advanced Systems signed a landmark agreement
affirming the companies intend to join hands to produce the F-16 Block 70 in India.)
However... Changing your entire arsenal is something that cannot be done overnight.
Russia remains crucial to India in both defense and energy. And that is why Modi
has decided not to sanction Russia. Is it a good idea, is it a bad idea?
We on VisualPolitik certainly can't applaud him. But one thing is certain,
India is gaining a lot out of the situation. N5(India attempts to diversify energy sources
with cheap Russian oil. Asia Nikkei) To give you an idea, BEFORE the war, Russia
accounted for only 0.5% of India’s oil supply. Now it is more than 10%. In April 2021, India bought
about 22,500 barrels of Russian oil per day. In April 2022, the figure was over 680,000.
And the sharpest of you will already be saying... Aha! You see, this is how Russia
can grow despite the sanctions! Right? Instead of selling oil to the Europeans,
now it sells it to the Indians, who have a much larger population, right? Well... no.
In reality, it is New Delhi that has really scored the deal here!
As the United States and Europe have stopped buying dinosaur juice from Russia,
the price has inflated to astronomic levels. At some points, the price of a barrel of Brent has
reached over $120. However, no wealthy country wants to buy oil from Russia.
And that is when India arrives and says "My friend, my comrade, my tovarich...! Don't worry,
I am here to buy oil from you... but since I am practically the only buyer... You will
let me have it at a friendly price, won't you? How about a discount of 30 dollars per barrel?
And Russia has no choice but to jump through the hoops. In other words,
India has been buying oil well below the market price. Put another way: in this business there
is little ideology or friendship and a lot of taking advantage of the situation. Europe was
importing more than 3.1 million Russian barrels a day. This was before the war.
India is buying about 680,000 barrels a day. In other words,
should Europe stop buying oil from Russia completely (which is quite likely),
India will not be able to compensate for the losses. Neither in price nor in quantity.
So now the question is... Why does Biden continue to tighten cooperation with India? Well we're
going to look at that right now. T3(THE STRING OF PEARLS)
Beyond Russia, the biggest threat to Western security is China. And, in this regard, India's
interests could not be more aligned with the West. In this respect, India has a lot to lose.
Just remember that China and India have border disputes of all sorts.
Every few years there is some skirmish on the Himalayan border. But, without a doubt,
the worst threat is... Check out this map. What you are seeing here is the String of
Pearls strategy. That is, a series of ports funded by China and strategically placed to
encircle India if necessary. We are talking about ports in Pakistan, Sri Lanka and Bangladesh.
In theory, these ports are intended for civilian use... But they are paid for
by China! And Pakistan, Sri Lanka and Bangladesh are very weak economies so,
at any given moment, China could pressure them to allow the Chinese navy to operate from them.
For years, China has been exercising what we here on VisualPolitik call
Sugar Daddy diplomacy. We have explained it several times in previous videos. In short:
China can convert those ports to military use very easily.
And that's quite a threat to India's security. That explains all of New Delhi's diplomatic
and military alliances with Washington. So what could India bring to the table to deter China,
you may ask? A lot! One thing in particular: geography. Look at this other map.
What you see here is the Strait of Malacca. One of the epicenters of global trade. More than 70%
of the gas and oil that reaches China passes through here. It would only take cutting the
transit of ships for one day for the Chinese to collapse from one moment to the next.
And which countries could cut this traffic? Exactly! India. And how could they do it? Well,
very simply. See these other islands here? These
are the Andaman and Nicobar Islands. A virtually uninhabited archipelago.
Until a few years ago, these islands were known only to the indigenous tribes that
inhabited them. Now, however, things are changing a lot around there. Listen up.
N6(New naval base in Andamans boosts military posture in Indian Ocean)
And all this explains why the United States is so interested in improving ties with India. In
this respect, what India is doing with Russia is on the back burner. Washington's interest
is that New Delhi has a decent military ready to deter China. Everything else is secondary.
Besides... To what extent is it so crucial for India to buy oil from Russia?
Think about it, at the time of making this video,
the debate with India is about the price cap on Russian oil.
Many G7 countries: that is, the world's largest economies, want to set a maximum price for oil
coming from Russia. For that to work, all the major economies would have to agree. And it
seems that India is not willing to join in. At least, not at the time of making this video.
The question is... Does it really make a big difference? Think about it:
if India is buying oil from Russia, it's because they are ALREADY selling it to
them well below the market price. In other words, cap or no cap on spending,
India is only interested in Siberian dinosaur juice... if they can get it for a bargain price.
Conclusion: for the moment, it does not seem that Washington is very concerned about India doing
business out of the Ukrainian war. The important thing, in this case, is India’s position on China.
And at this point, the questions are:
Do you think India will ever revamp its entire arsenal with Western weapons?
Would it be a good idea to put pressure on India to join the sanctions against Russia?
You can leave your answer in the comments. As always, don't forget that here on VisualPolitik,
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