How Russia tries to gas itself with China and India
China promises closer ties with Russia on energy. Meanwhile, Moscow, in difficulty due to Western sanctions, has presented India with a list of products and components it hopes to buy. All the details
"China is ready to work with Russia to form a closer partnership on energy cooperation," which represents "an important cornerstone of practical cooperation" between the two nations. These are the words of Chinese President Xi Jinping, expressed in a letter to the fourth China-Russia Energy Business Forum and reported by Xinhua , the country's official news agency.
Although stingy with details, the statement suggests a further deepening of hydrocarbon trading relations between Moscow and Beijing, which have intensified since the beginning of the war against Ukraine and which have allowed the Kremlin to mitigate the impact of Western sanctions.
THE SALE OF HYDROCARBONS BETWEEN RUSSIA AND CHINA
China is in fact one of the main buyers of Russian gas and oil: the volumes of supplies have more than doubled compared to a year ago, reaching a value of 10.2 billion dollars last October. The increase in imports was favored by the discounts that Russia applies to its crude oil to keep it competitive and compensate for the risks of the sale, given the sanctions.
RUSSIA'S DEMAND TO INDIA
Another country that has taken advantage of the discounts to boost imports of Russian oil is India, which is thus helping the Kremlin offset part of the decline in sales to Europe, historically its main market.
– Read also: Are India and China nullifying sanctions on Russian oil?
Nonetheless, Russia is in trouble: even if Western sanctions have not caused the immediate collapse of its economy, they are creating major supply problems for technologies and industrial components. To keep essential sectors running, the Kremlin then sent India a list of more than five hundred products – mainly parts for cars, planes and trains – which it intends to buy. Reuters has seen a provisional version, which does not contain information on quantities, for example.
It seems that New Delhi wants to proceed with the supply of the components required to reduce the growing trade deficit with Moscow. However, some Indian companies have expressed caution, fearing fines.
WHAT'S IN THE LIST
Russian airlines do not have enough parts on hand to maintain their aircraft, almost all of which are foreign-made; the same situation of shortage is experienced by the automotive industry, as foreign manufacturers have left the country.
The fourteen-page long list of required items includes pistons for car engines, oil pumps, ignition coils, bumpers, seat belts, aircraft landing gear components, power and communication systems, life jackets, aviation tires, paper and fabric making materials.
THE PROBLEMS OF THE METAL INDUSTRY
Aside from airlines and automakers, Russian metals companies – including nickel and palladium giant Nornickel – have also said they are having difficulty sourcing foreign machinery, spare parts, materials and technology due to the sanctions. and that this situation is having repercussions on their future development plans.
Indeed, in the list presented to India, there are about two hundred metallurgical products.
HOW IS INDIA-RUSSIA TRADE GOING?
Russia is India's fourth-largest market for pharmaceutical products, but bilateral trade leans sharply in favor of the former: Moscow has been India's main arms supplier for decades; he sells them large quantities of fertilizers and – especially since the beginning of the invasion of Ukraine – of hydrocarbons.
Between 24 February and 20 November, Indian imports from Russia almost quintupled, reaching 29 billion dollars, against 6 billion in the same period of 2021. Exports, on the other hand, decreased: from 2.4 billion in February-November 2021 to 1.9 billion.
THE GOAL OF THE GOVERNMENT AND THE FEARS OF THE COMPANIES
A government source in New Delhi told Reuters that India aims to boost exports to Russia to $10 billion within months by supplying the products on the list.
However, the agency has registered a certain hesitation to proceed by Indian companies, who fear running into Western sanctions. Indian credit institutions would also prefer not to engage in direct rupee transactions with Russian entities, for the same reason.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/russia-cina-india-energia-componenti/ on Wed, 30 Nov 2022 10:09:15 +0000.