This comes as the first definitive comment from the Ministry of External Affairs on the much-discussed energy sourcing issue.
India’s energy sourcing will be guided by national interest, said Foreign Secretary Vikram Misri on Monday, just days after the framework of an interim trade agreement was released by India and the United States, with the latter claiming that New Delhi has committed to cutting back direct as well as indirect import of Russian oil.
This comes as the first definitive comment from the Ministry of External Affairs on the much-discussed energy sourcing issue. Just a couple of days back, Union Commerce Minister Piyush Goyal, when asked whether India would indeed stop purchasing Russian oil (as claimed by the US), had referred the matter to the MEA.
When asked about the import of Russian oil during a press briefing, Misri emphasised that “the more diversified we are, the more secure we are”. However, he didn’t directly say if India will stop importing Russian oil or continue procuring it — in the wake of US President Donald Trump passing an executive order lifting the 25 percent penalty tariff on India, while warning of punitive action in case Russian oil is purchased.
“India is a net importer in the oil and gas sector. We are a developing economy; we have to be conscious about our resource availability. Naturally, when you are dependent to the extent of 80-85% on an imported resource, you have to have concerns about the possibility of inflation driven by energy costs,” the Foreign Secretary said.
“Our foremost priority is to safeguard the interests of Indian consumers insofar as energy is concerned— to really ensure that they receive adequate energy at the right price and through reliable and secure supplies,” Misri said.
Trump’s executive order said India has “committed to stop directly or indirectly importing Russian Federation oil”, that “it will purchase United States energy products… and has recently committed to a framework with the United States to expand defense cooperation over the next 10 years”.
The 25 per cent penalty tariff stands withdrawn from 12.01 am EST February 7 (10.31 am IST). The order said that the Trump administration has put in place a mechanism to “monitor whether India resumes (buying oil from Russia) directly or indirectly” and that a punitive penalty could be imposed by the US in future.
“In recent years, the global economy has faced significant uncertainties which have had a major impact on the stability of global energy markets,” Misri said, adding, “India is not just one of the largest consumers of energy, but it also plays an important role as a stabilizing factor in global energy markets.”
“That’s one reason why we import energy from multiple sources… the key drivers of our energy policy are adequate availability, fair pricing and reliability of supply. So, we import crude oil from dozens of countries,” said Misri, adding that “India is neither dependent on any single source for this, nor do we intend to be.”
It is natural for the mix of sources to vary from time to time, depending on objective market conditions, the Foreign Secretary said, adding, “Our approach is to maintain multiple sources of supply and diversify them as appropriate to ensure stability. Therefore, I would say that the more diversified we are in this area, the more secure we are.”
However, Misri added that the actual sourcing is done by oil companies. “Oil companies in the public sector, oil companies in the private sector… they make decisions based on market conditions,” he said.
“So, there is a rather complex matrix of issues that these companies have to take into account, which—not to disregard it—also includes very, very important financial and logistical aspects,” he added.
The Foreign Secretary summed up saying: “I can firmly and confidently say that whether it is the government or indeed our business, at the end of the day, national interests will be the guiding factor for us in our choices.”
