Indian Prime Minister Narendra Modi’s state visit to the United States was deemed a success. He received a warm welcome from Congress and had a pleasant visit to the White House, which culminated in a state dinner. During the visit, Modi and President Joe Biden announced various deals that would enhance the security and technology ties between the two nations. However, there is one pressing issue that remains unaddressed.
On the day Modi arrived in Washington, Reuters reported that Indian imports of Russian crude oil had reached a new high in May. While Modi and Biden expressed their commitment to the clean energy transition in a joint statement, the reality is that India’s growing energy needs are being met by fossil fuels from Russia. Furthermore, the revenues generated from this import are being used by President Vladimir Putin to finance the ongoing Ukraine war.
It is crucial for the United States to prioritize addressing India’s reliance on Russian energy. The US is the main donor to the Ukrainian side of the war and one of the world’s largest energy producers. Merely imposing sanctions on Russian energy exports, as the US and EU have done, does not prohibit Indian fuel imports. In fact, the Biden administration has even encouraged such imports to stabilize domestic energy prices. India has also taken advantage of a provision in EU regulations to sell Russian energy products as if they were produced in India, profiting from selling to Europe while Putin wages war.
Putin has shown a willingness to use energy as leverage to coerce Modi into supporting Russia on Ukraine. Last month, he threatened to withhold energy contracts unless India opposed the potential blacklisting of Russia. The United States has turned a blind eye to this issue, leaving Modi vulnerable to Putin’s energy blackmail, even as Biden hosts him at the White House. Instead of imposing punitive sanctions, Washington should adopt a supportively collaborative approach with New Delhi.
A crucial step would be to coordinate with India to ensure a reliable supply of energy imports from the US and other allied producers. The Trump administration moved in this direction by ending significant reduction exceptions for Iranian oil in 2018. Unfortunately, the Biden administration’s refusal to offer such coordination has led India to resume sanctions-busting activities with Iran. To change course, the US must act as an energy superpower with abundant resources, facilitating a strategic partnership with India.
There are broader implications at play here. In the escalating rivalry between the US and China, India could become a vital ally in Southeast Asia. India, the world’s largest democracy and soon-to-be largest country, possesses a substantial labor force, a developing industrial sector, and a strong military. However, India cannot be a partner to the US on China while maintaining a partnership with Russia on energy. The alignment between Russia and China is growing, as both Putin and Xi openly celebrate their close engagement and their hostility towards the US. Modi recognizes this and recently halted talks on a rupee-ruble trading platform due to the ruble’s exposure to the Chinese yuan.
For India to decisively break ties with Russia on energy, the US must demonstrate proactive energy policy. Unfortunately, this issue was not addressed during Modi’s visit to Washington this week. Failing to resolve the Russian energy issue could undermine the progress made between the US and India. Pretending that Modi can simultaneously align with Russia and the US is not advantageous for India. If the Biden administration continues to disregard the energy issue due to its climate agenda, it falls upon India’s supporters in Congress to address it for the benefit of both nations.
In conclusion, while Prime Minister Modi’s state visit to the US was successful in many aspects, the unresolved issue of Indian reliance on Russian energy remains a significant failure. To ensure progress is not hindered, it is imperative for the US to prioritize addressing this issue and adopt a supportive, collaborative approach with India. By coordinating energy imports and demonstrating a proactive energy policy, the US can help India break ties with Russia and strengthen their partnership in the face of shared challenges.
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