Narendra Modi met with Russian President Vladimir Putin during the SCO summit in Tianjin on Monday. Their private meeting took place after a photo opportunity where they were seen hugging, before heading to an off-camera meeting. This follows US sanctions against India imposed by former President Trump who increased tariffs for India to 50% – the highest rate ever imposed on any Asian nation. Modi has been steadfast in his support of Russian oil purchases and insists that he will continue buying it as long as it remains affordable. 50% is just a small price to pay when compared to global stability. This meeting comes amidst renewed tension between Russia and Ukraine, with markets reacting to the possibility of increased supply and surplus, while analysts are concerned about potential buyer hesitancy.
The US is under pressure from various sectors including oil companies as it aims to reduce reliance on Russian oil while simultaneously seeking peace through diplomacy with Putin. These tensions have been exacerbated by Trump’s continued sanctions threats against India which has left the international community in a predicament.
Modi, in a display of diplomatic maneuvering, also communicated his support for Ukraine’s peace efforts and plans for talks with Zelensky on the issue before meeting Putin. The meeting between Modi and Putin will be followed by Putin’s visit to India later this year. This signals continued diplomatic engagement. 2023 is proving to be a crucial year in global geopolitics.
The sanctions, however, have not completely dampened the Indian economy. Despite US demands for a reduction in Russian oil purchases, experts believe that India’s stockpile of crude will grow. Meanwhile, the weakening dollar and a U.S. holiday may contribute to a muted but uneasy session on global markets this week. 6% of WTI declined last month, while Brent crude rose with renewed Russian airstrikes on Ukraine.
Despite the increasing geopolitical tensions, India appears poised to weather this storm thanks to its strong economic position and a focus on price over politics. The outcome of these actions will have significant ramifications for global markets and alliances in the years to come.