Ukraine Crisis: India’s Response

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    • Recently, India called for a “peaceful resolution” of the situation (ongoing crisis between Russia and the West ) through “sustained diplomatic efforts” for “long-term peace and stability” in the region and beyond.

    Image Courtesy: Economist, BBC  

    Background

    • Ukraine and Russia share hundreds of years of cultural, linguistic and familial links. 
    • As part of the Soviet Union, Ukraine was the second-most powerful Soviet republic after Russia, and was crucial strategically, economically and culturally. 
    • Ever since Ukraine split from the Soviet Union, both Russia and the West have vied for greater influence in the country in order to keep the balance of power in the region in their favour.
    • Fighting between Ukrainian forces and Russia-backed separatists in eastern Ukraine began after Russia’s 2014 annexation of Ukraine’s the Crimean Peninsula. 
      • It has killed over 14,000 people and devastated Ukraine’s industrial heartland, known as the Donbas.
    • The West lined up against President Vladimir Putin, India had expressed “concern” but also qualified it by talking of “legitimate Russian interests”.

    Current Issue

    • Russia has mobilised more than 100,000 troops near the Ukrainian border, raising fears of war in the region.
    •  Russia has consistently denied that it is planning an attack, but the US and its NATO allies believe that Russia is preparing to head towards a war. 
      • Russia’s history of military action in Ukraine and Georgia worries NATO.
    • Meanwhile, Ukrainian authorities have tried to defuse the situation as tensions escalated.

    Russia’s stand

    • Russia is seeking assurances from the US that Ukraine will not be inducted into NATO. However, the US is not prepared to give any such assurance.
      • NATO would have to agree to halt all membership plans, not just with Ukraine, and scale down its presence in countries like Estonia close to Russia’s borders.
    • Russia stated that the tension is being generated to prevent Europe from collaborating with Russia on the energy front.
      • This statement indicates the underlying tension between the U.S. and Russia over the Nord Stream 2 gas pipeline that is aimed at supplying Russian gas to central Europe.
    • Russia is keeping the tensions high at the Ukraine border in order to get sanctions relief and other concessions from the West.
    • Any kind of military action by the US or EU against Russia would precipitate a major crisis for the whole world and has so far not been mooted by any of the parties involved.

    West’s stand

    • The West is yet to respond to the Russian red lines with regard to the non-expansion of NATO eastwards, non-deployment of offensive weapons near the Russian borders and refusal of provocative military activities.
    • The West has accused Russia of preparing for an imminent invasion, claiming Russia has deployed tens of thousands of troops along Ukraine’s borders.
    • The U.S. pushed back at the Russian proposals, saying it would not negotiate without Europe’s input.
    • For the United States and the European Union, Ukraine is a crucial buffer between Russia and the West. 
      • As tensions with Russia rise, the US and the EU are increasingly determined to keep Ukraine away from Russian control.

    Response of India 

    • During a UNSC meeting in 2021, India signalled its backing for traditional partner Russia on the Ukraine issue.
    • India has advocated political and diplomatic solutions: that protects the legitimate interests of all countries in the region and ensures long term peace and stability in Europe and beyond.
      • The path forward can only be through peaceful dialogue for a lasting solution acceptable to all concerned.
    • India voted against a Ukraine-sponsored resolution in the UN: that condemned alleged human rights violations in Crimea thereby backing old ally Russia on the issue.

    Concerns for India 

    • With key strategic partners on both sides, India cannot afford any hasty moves hurting its vital stakes. 
      • Almost 60 per cent of India’s military supplies are Russian manufactured, which means it cannot afford to alienate Moscow, particularly at a time when Indian and Chinese troops continue to be in a stand-off on the eastern border.
        • India and Russia have signed several important defence agreements, including the S400 missile system and AK-203 assault rifle. 
    • The US and Europe are both important partners from India’s strategic calculus. 
      • Many American platforms have been used for reconnaissance and surveillance along the India-China border. 
        • Winter clothing for 50,000 troops has been sourced from these western strategic partners.
    • Another concern for Delhi is the small Indian community in Ukraine, comprising mostly students in medical colleges. 
      • The Indian Embassy in Ukraine has started collating information on the students as part of preparations for any hostilities. 
    • China Factor :
      • China is also supporting that Ukraine should not become a member of the North Atlantic Treaty Organisation (NATO). 
        • In such a situation, if there is a ban on Russia from the western countries and the US, then China can compensate for it.
          • This will further increase the closeness of China and Russia, which can have a bad effect on the friendship of India and Russia.

    Implications on Oil prices 

    • Crude oil prices have risen sharply since the beginning of the year as a surge in Covid-19 cases around the world owing to the Omicron variant of the novel coronavirus has not lowered demand for crude oil in line with expectations.
    • Geopolitical tension in the Middle East and fresh tensions between Russia and Ukraine are leading to speculations of supply disruptions. 
      • Rising tensions between Russia and Ukraine are leading to a surge in oil prices, with Brent breaching the $90-a-barrel mark overnight for the first time since 2014.
    • Key oil-producing countries have also kept increasing crude oil supplies despite rising demand. 
    • OPEC+ had agreed to sharp cuts in supply in 2020 owing to Covid-induced travel restrictions, but the organisation has been slow to boost production since then
    • Some analysts predict oil prices to hit the $100-110-mark per barrel in the near future as prospects of supply disruptions and rising demand support prices.
      •  If the prices continue to rise, it will put a lot of pressure on both the Central and state governments to review taxes. 

    What is the impact on rising oil prices on Budget and inflation?

    • The Budget for this year has assumed that oil prices will hover around the $65-per-barrel mark. 
    • The rising prices feed into inflation and also increase the amount of LPG and kerosene subsidy the government is required to pay.
    •  However, on the positive side, government revenues on taxes of oil and related products have also been rising over the last two years.
    •  The country’s retail inflation, which is measured by the Consumer Price Index, has already risen to a five-month high of 5.59 per cent in December. 
      • Wholesale price index-based inflation rose to 13.56 per cent during the same month.
    • High inflation will force the government to cut taxes on oil and related products, especially since rising prices are a key factor ahead of upcoming Assembly elections in five states.
    • Oil prices are a big factor in the Budget that will be presented next week and the overall fiscal math of India as it imports more than 85 per cent of its crude requirements. 
    • The oil import bill is already up by more than 70 per cent from last year and it affects the balance of payments adversely. 

    Way Ahead

    • International cooperation is needed to solve the ever-increasing conflict between Russia and Ukraine.
      • Both the countries should restrain from any move leading to escalation of the tension.
    • India has been closely following the developments relating to Ukraine, including the ongoing high-level discussions between Russia and the US. 
    • The Indian embassy in Ukraine has asked all Indian nationals in Ukraine, including students, to register themselves with the mission by January 31 2022 so that there can be effective coordination and swift dissemination of information.
      • The mission also asked Indian nationals to follow the embassy’s website and Twitter and Facebook account for updates.

    Source:IE

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