These shipments, including urea and nitrogen-based fertilizers, come on top of record imports of discounted Russian oil. Although Persian Gulf countries remain India’s top suppliers of crude oil, India in July bought about 1 million barrels a day from Russia, a sharp increase since the beginning of the year, according to Bloomberg News. Government data shows that India spent $3.7 billion on Russian oil between January and May, up more than 350 percent from the same period last year.
As sanctions over Ukraine war mount, Russia turns to India to buy oil and arms
As the war in Ukraine continues, so does the challenge Western countries face in seeking to stop Russian President Vladimir Putin’s military campaign without hurting the poorest in the world. UN Secretary General António Guterres recently warned that vulnerable countries would be on the verge of famine without Russian food and fertilizers.
“There is no option,” agriculture expert Devinder Sharma said of India’s increased fertilizer imports from Russia. “Agricultural production will come under stress without adequate fertilizer supplies.”
Unlike oil, fertilizer is not included in the US sanctions placed on Russia because of the invasion.
For India, this year’s monsoon-season rice crop is crucial after a scorching heat wave in March damaged the country’s staple wheat crop and reduced yields. With food stocks depleted and the climate uncertain, India banned wheat exports this year, saying its food security was “at risk.”
The country has shied away from joining the Western coalition arrayed against Russia, initially because of its dependence on Moscow for weaponry and now because of concerns over energy and food security.
India’s imports of Russian coal and sunflower oil have also jumped. Overall, Russia has become the 10th-largest source of imports to India, according to data from the Indian Ministry of Commerce and Industry, ranking much higher than in previous years. Through May, India imported goods worth $8.3 billion from Russia, nearly triple the value for the same period last year.
Indian officials have slammed what they describe as the West’s doublespeak about doing business with Russia, noting that Europe continues to purchase crude oil and natural gas from Moscow. “The new package of [European] sanctions are designed in a way where consideration has been given to the welfare of its population,” said Indian Foreign Minister S. Jaishankar in June. “People need to understand that if you can be considerate to yourself, surely you can be considerate to others.”
Although the local production of urea, India’s most widely used fertilizer, is able to meet most of India’s needs, the country relies on imports of raw materials for potassium-, nitrogen- and phosphate-based fertilizers. India turned to Russian shipments after its top fertilizer supplier, China, imposed curbs last year on fertilizer exports to protect its own farmers amid soaring domestic prices.
Russia also has limited its overall fertilizer exports since last year but has continued to supply India. A report in the Indian Express newspaper suggested that Russian fertilizer was available at cheaper rates than the market prices. Officials from the Ministry of Chemicals and Fertilizers did not respond to a request for comment.
The challenge for authorities in India is twofold: to ensure adequate supplies for farmers and to keep fertilizer affordable. An industry expert who spoke on the condition of anonymity because of the sensitivity of the matter said fertilizer on the open market was trading at three times its price last year.
Fertilizer crisis delivers profits and pain as Ukraine fallout broadens
India is in a difficult position because it relies on fertilizer imports at a time of high global prices, said Manjari Chatterjee Miller, a senior fellow for South Asia at the Council on Foreign Affairs.
She said that the Biden administration has, so far, been “remarkably understanding” of India’s position on oil and other imports from Russia and that the issue was not likely to damage the relationship between the countries. “In the long run, it will depend on how the Ukraine crisis plays out, and whether India and the United States both decide that the costs of deepening their partnership are too high. But that seems unlikely,” she said.
India is not the only developing country facing such difficult choices. Brazil relies on fertilizer imports for its valuable soy crop, and one-fifth of its supplies come from Russia, according to the publication Quartz.
The Brazilian ambassador to Russia said that the two countries had managed to circumvent the logistical and payment difficulties posed by sanctions and that Brazil was receiving deliveries of Russian fertilizers, according to a report in June by the Russian news agency Tass.
“Since we have excellent relations with Russia in the trade sphere and supplies [of fertilizers] continue, I do not see reasons to look for them in a different place. We continue receiving fertilizers from Russia,” said the ambassador, Rodrigo de Lima Baena Soares, according to the Tass report.
Russia holds 400 passenger jets hostage in global sanctions fight
Sanctions researcher Edoardo Saravalle, formerly of the Center for a New American Security, said it would be necessary to provide alternative sources of imports if countries including India are not to turn to Russia.
Even as some countries have continued to trade with Russia, the economic isolation has taken a toll on it. A recent study by Yale University researchers, using trade and shipping data, suggests that international sanctions and the withdrawal of businesses from Russia have seriously hurt the country’s economy.
Russia’s position as a commodities exporter has “irrevocably deteriorated,” it is struggling to import parts and technology from “hesitant trade partners,” and domestic production has come to a “complete standstill,” the study concludes.
Saravalle said sanctions have been effective in imposing pain on Russia even if they have not brought its war in Ukraine to a stop.
“You’re never going to achieve a full blockade,” Saravalle said. “We’re still in the early stages of this conflict. Iran sanctions were the product of years of buildup.”