These shipments, including urea and nitrogen-based fertilizers, come on top of record imports of discounted Russian oil. While the Persian Gulf countries remain India’s top crude oil suppliers, India bought about 1 million barrels a day from Russia in July, a sharp increase since the start of the year, according to Bloomberg News. Government data shows India spent $3.7 billion on Russian oil between January and May, more than 350 percent more than the same period last year.
As sanctions mount over Ukraine war, Russia turns to India to buy oil and weapons
As the war in Ukraine continues, so does the challenge Western countries face to stop Russian President Vladimir Putin’s military campaign without hurting the world’s poorest. UN Secretary-General António Guterres recently warned that vulnerable countries would be on the brink of famine without Russian food and fertilizers.
“There is no option,” agricultural expert Devinder Sharma said of India’s increased fertilizer imports from Russia. “Agricultural production will be under pressure without sufficient fertilizers.”
Unlike oil, fertilizer is not included in the US sanctions imposed on Russia over the invasion.
For India, the rice crop in the monsoon season is critical after a scorching heat wave in March damaged the country’s main wheat crop and reduced yields. With food supplies depleted and the climate uncertain, India banned wheat exports this year, saying food security was “at risk”.
The country has shied away from joining the Western coalition lined up against Russia, initially because of its reliance on Moscow for weapons and now because of concerns over energy and food security.
India’s imports of Russian coal and sunflower oil have also risen. Overall, Russia has become the 10th largest source of imports to India, according to data from the Indian Ministry of Trade and Industry, much higher than in previous years. Until May, India imported $8.3 billion worth of goods from Russia, almost three times as much as in the same period last year.
Indian officials have criticized what they describe as the West’s ambiguity about doing business with Russia, noting that Europe continues to buy crude oil and natural gas from Moscow. “The new package of [European] sanctions are designed with the well-being of the people in mind,” Indian Foreign Minister S. Jaishankar said in June. “People need to understand that if you can be considerate of yourself, you can certainly be considerate of others.”
While local production of urea, India’s most widely used fertilizer, can cover most of India’s needs, the country is dependent on imports of raw materials for potassium, nitrogen and phosphate fertilizers. India turned to Russian shipments after its largest fertilizer supplier, China, imposed restrictions on fertilizer exports last year to protect its own farmers amid rising domestic prices.
Russia has also restricted total fertilizer exports since last year, but continues to supply India. A report in the Indian Express newspaper suggested that Russian fertilizers were available cheaper than market prices. Officials from the Ministry of Chemistry and Fertilizers did not respond to a request for comment.
The challenge for the authorities in India is twofold: to ensure sufficient supply to farmers and to keep fertilizer affordable. An industry expert who spoke on condition of anonymity due to the sensitivity of the case said: fertilizer on the open market sold three times as much last year.
Fertilizer crisis brings gains and pain as Ukraine fallout deepens
India is in a difficult position as it relies on fertilizer imports at a time of high world prices, said Manjari Chatterjee Miller, senior fellow for South Asia at the Council on Foreign Affairs.
She said the Biden administration has so far had “remarkable understanding” of India’s stance on oil and other imports from Russia and that the issue is unlikely to harm relations 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 cost of deepening their partnership is too high. But that seems unlikely,” she says.
India is not the only developing country facing such difficult choices. Brazil depends on fertilizer imports for its valuable soy crop, and a fifth of its supplies come from Russia, according to the publication Quartz.
Brazil’s ambassador to Russia said the two countries had managed to circumvent the logistical and payment difficulties of sanctions and Brazil received shipments of Russian fertilizers, according to a report by Russia’s Tass news agency in June.
“Because we have excellent relations with Russia in terms of trade and supplies [of fertilizers] continue, I see no reason to look for them elsewhere. We continue to receive fertilizers from Russia,” said the ambassador, Rodrigo de Lima Baena Soares, according to the Tass report.
Russia holds 400 passenger planes hostage in global sanctions fight
Sanctions researcher Edoardo Saravalle, formerly of the Center for a New American Security, said it would be necessary to offer alternative sources of imports if countries, including India, do not want to turn to Russia.
While some countries have continued to trade with Russia, economic isolation has taken its toll. A recent study by researchers at Yale University, using trade and shipping data, suggests that international sanctions and the withdrawal of companies from Russia have seriously damaged the country’s economy.
Russia’s position as an exporter of raw materials has “deteriorated irrevocably”, it struggles to import parts and technology from “reluctant trading partners”, and domestic production has “completely ground to a halt”, the study concludes.
Saravalle said sanctions have been effective in hurting Russia, even if they did not stop the war in Ukraine.
“You’ll never reach a full blockade,” Saravalle said. “We are still in the early stages of this conflict. The sanctions against Iran were the product of years of build-up.”