India’s Oil Import Bill May Rise by ₹96,000 Cr if it Stops Russian Oil Imports: Report
India, one of the world’s largest oil importers, may face a significant increase in its annual crude oil import costs if it stops importing Russian oil in response to the threat of penalties from the US government. According to analysts, the cost could rise by $9-11 billion (₹78,000-96,000 crore) if India decides to halt its Russian oil imports.
The US government has threatened to penalize Indian exports if the country continues to import Russian oil, which constitutes 35-40% of India’s oil imports. This comes as the European Union (EU) has also slapped sanctions on India’s second-largest refinery, Reliance Industries, for allegedly violating the EU’s sanctions on Russia.
India’s reliance on Russian oil has increased significantly since the Russia-Ukraine war began. Before the conflict, Russian oil imports accounted for a mere 0.2% of India’s total oil imports. However, with global oil prices soaring and Western countries imposing sanctions on Russian oil exports, India has been forced to rely more heavily on Russian oil to meet its energy demands.
The Indian government has been under pressure to reduce its dependence on Russian oil, with many experts warning that the country’s energy security is at risk. However, the government has been cautious in its approach, reluctant to take a decisive stance that could lead to a significant increase in oil prices or disrupt the country’s energy supply.
The US government’s threat to penalize Indian exports has added a new layer of complexity to the situation. While the US has been vocal in its criticism of India’s continued oil imports from Russia, Indian officials have maintained that the country’s energy needs cannot be met solely by domestic production.
India’s oil import bill has already been rising steadily over the past few years, driven by increasing global oil prices and a growing demand for energy. In 2020-21, India’s oil import bill stood at $83.5 billion (₹714,000 crore), up from $55.6 billion (₹484,000 crore) in 2019-20.
The potential increase in India’s oil import bill if it stops importing Russian oil could have significant implications for the country’s economy. The Indian rupee has already weakened significantly against the US dollar in recent months, and a further increase in oil prices could lead to a depreciation of the rupee and a widening of the trade deficit.
The Indian government is likely to face significant pressure from both domestic and international stakeholders to reduce its dependence on Russian oil. However, the country’s energy security and economic stability are likely to remain the priority, with any decision on Russian oil imports being carefully weighed against the potential risks and consequences.
In conclusion, India’s oil import bill may rise by ₹96,000 crore if it stops importing Russian oil, according to analysts. The threat of penalties from the US government and the EU’s sanctions on Indian refineries have added a new layer of complexity to the situation, with the Indian government facing significant pressure to reduce its dependence on Russian oil. However, the country’s energy security and economic stability are likely to remain the priority, with any decision on Russian oil imports being carefully weighed against the potential risks and consequences.
