EU concerned as goods 'made in India' from Russian crude oil flood Euro market
The influx of Russia-derived petroleum items defeats EU sanctions meant to reduce Moscow's ability to fund its war on Ukraine, says EU trade commissioner
The European Union voiced concerns on Saturday, 26 August, over a "rapid" rise in refined petroleum products made by Indian manufacturers from Russian crude oil finding their way to the European market. The EU said this defeats the purpose of its sanctions against Moscow, aimed at reducing its ability to finance the war with Ukraine.
EU executive vice-president and commissioner for trade Valdis Dombrovskis said products processed from Russian crude oil are arriving in the European market in "large quantities", and the supernational organisation is considering how to deal with it.
Here in India currently, with a much-anticipated free trade agreement (FTA) perhaps riding on it, the trade commissioner's comments reflected perhaps a shadow of both the carrot and the stick in reference to Indo–EU relations, in addition to unveiled censure of Russia's trade policies during its war on Ukraine.
In an interaction with a small group of journalists, Dombrovskis said Russia was using its energy supplies and food as "tools of "war and manipulation" to continue its attack on Ukraine, citing Russia's withdrawal from the Black Sea grain initiative and blocking of Ukraine's export of food grain to the world market as examples.
On its own trade ties with India, the trade commissioner said the EU is looking to significantly expand its economic engagement with New Delhi.
"The EU is India's second largest trading partner, accounting for some 120 billion euro worth of trading last year, which is 10.8 per cent of total Indian trade.
"And India is the EU's 10th largest trading partner, accounting for 2 per cent of EU total trade. But at the same time, we see that there is still lots of untapped potential," he said.
Dombrovskis said the EU is looking to make sure that its trade and investment cooperation with India becomes "much more intense".
Comparing the mutual dependencies, it does seem like India could stand to be the loser should some of those measures the EU is contemplating extend to Indian-produced but Russia-derived goods.
It is surely significant that Dombrovskis said, while acknowledging the "conflictual geopolitical situation", that in this context, "the value of trust and reliability has increased substantially".
Referring to Russia's instrumentalisation of its energy supplies and now food as "weapons of war and manipulation," the EU trade commissioner continued to say, "There is no such thing as just goods or political trade (any more)."
"So it's all linked together, trade matters, geopolitics. But also friendships matter. So that's why the EU–India strategic partnership is so important," he said.
The unspoken question here seemed to be how much India values this 'friendship', against its amity with (and dependence on) Russia.
Since Russia's invasion of Ukraine in February 2022, Western powers have imposed a series of sanctions on Moscow, including a price cap on Russian oil by G7-plus nations, in order to reduce its ability to finance the war on Ukraine.
Notwithstanding the restrictions, India's procurement of discounted crude oil from Russia has witnessed a major upswing in the last year.
"We are obviously aware that a number of countries, including China and India, have not joined those sanctions. We are aware that Russia is actively seeking alternative markets for the lost European market," Dombrovskis said.
The EU trade commissioner said this in answer to a question on India's increasing trade relations with Russia, especially its procurement of discounted Russian crude oil.
"We indeed see new trade patterns emerging — some issues [and] new developments which we are currently assessing. For example, what we see is now a rapid increase of refined oil products 'imports' in the EU from India," said Dombrovskis.
"But if they are made with Russian oil, in a sense it defies the purpose [of] the EU, as a Western democratic world, to reduce Russia's ability to wage the civil war," he continued, adding that it required reflection on the part of the European nations.
Dombrovskis said the series of sanctions that were imposed against Russia included the export of oil and oil products because energy supply is Russia's "biggest source" of revenue.
"We want to reduce Russia's ability to finance the war," he said.
And that big goal — shared by a number of its prominent and preferred trade partners, including individual nations such as France and UK — may require India to reconsider its policy of 'friendship' across the divide that is the Ukraine war.
With PTI inputs