The United States has banned Russian oil imports, the United Kingdom has mentioned it would section them out by the tip of the yr, and the European Union has mentioned it would work to scale back its dependence on Russian oil and fuel over the following few years. What does this imply for India? India imports little or no of its oil (round 1.7% by some estimates) from Russia; however it’s depending on imports from West Asia, and as oil costs improve, and extra nations search to purchase oil from the identical consumers, India may discover itself in a bind. Already, its budgetary math is shot, and it’s only a matter of time earlier than inflation spikes (except the nation decides on drastic measures to handle the state of affairs).
As a rustic depending on imported oil — round 75% of its annual demand comes from outdoors — India’s immediate- and medium-term response will resolve its financial trajectory. In the short-term, India ought to push for long-term provide contracts with Russia on the discounted charges that Moscow has proven it’s open to providing. Irrespective of the optics of doing this, it’s in our self-interest to take action. Done instantly, and well, this may increasingly even insulate the financial system from the bruising it appears set for in 2022-23. But even because it does this, India ought to speed up its spectacular renewables push, maybe bringing ahead deadlines. For occasion, can the goal of assembly 50% of the vitality necessities from renewables by 2030 be met by 2028 or 2029? Or is it potential to make that quantity 60% by 2031 and 75% by 2032? These might look like unattainable targets now, however they’re achievable — and extra importantly, will assist India handle the optics of signing long-term provide contracts with Russia for reasonable crude. Between the local weather disaster and Russia’s ongoing invasion of Ukraine, India has superb causes to double down on renewables.
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