India and Western Sanctions on Russia: A Look at Compliance and Market Effects
India is positioned to avoid violating Western sanctions on Russia, including the price cap on Russian oil set at 60 dollars per barrel. This stance was reported by Bloomberg, citing an unnamed source familiar with the discussions.
According to a Bloomberg interlocutor, officials within the Indian government have urged banks and traders to adhere to all restrictive measures. The messages came during discussions involving United States representatives, other G7 members (the United Kingdom, Germany, Italy, Canada, France, Japan, and the United States) and Indian officials on the margins of the G20 summit.
A Bloomberg source added that Western partners are comfortable with New Delhi’s approach. While India has not declared support for the sanctions or the oil price ceiling, it has not ruled out cooperating with the measures either.
On the eve of a broadcast by New Izvestia, Russian commodity exporters were noted to be facing challenges in moving money earned from selling energy resources into Indian markets. The difficulties are linked to India’s financial regulations, which complicate the withdrawal of rupees and the repatriation of funds.
The price cap agreement, involving the European Union, G7 economies and Australia, became effective on December 5 and stands at 60 dollars per barrel for crude Russian oil. Since February, a separate ceiling of 100 dollars per barrel has been applied to Russian petroleum products sold at a premium to crude oil, such as diesel and kerosene. For some discounted products, including naphtha and fuel oil, the cap sits at 45 dollars per barrel. These measures aim to curb revenue from Russian energy sales while attempting to minimize disruption to global energy markets. As reported by Bloomberg, the practical implementation depends on a wide network of financial and commercial institutions across multiple jurisdictions, including potential ripple effects in the Indian market (source: Bloomberg).