Context: India accounts for more than 70% of the seaborne supplies of the grade so far this month and China for about 20%. In February 2023, Russia surpassed Saudi Arabia to become the second biggest exporter of crude oil to India in FY23 (Iraq being the first).
Why India and China are demanding Russian Oil?
Because Russian oil is fall cheaper than the western nations’ oil (about $10 cheaper).
Why China is at advantage than India?
Majority of Chinese oil imports comes through the pipeline while for India it is mainly through the sea trade. Pipeline transport reduced the cost of crude oil to China.
Important statistics as per Ministry of Commerce:
- Russia’s share zoomed to second-highest in FY23 from a negligible proportion in the previous years.
- This means that the Kremlin is enjoying stronger revenues despite the West’s attempts to curb funds for Russia’s military operations in Ukraine.
- But the sudden surge in oil imports meant that India’s trade deficit with Russia ballooned in recent years.
- India exports pharma products, crustaceans, tea, coffee and some other products but relatively of much lesser value. And so, India’s trade deficit with Russia has surged in FY23.