India’s Russia exports in Feb up 25% to hit pre-Ukraine war level
2 min read 20 Mar 2023, 11:50 PM ISTRussia’s invasion of Ukraine in February 2022 disrupted trade in the Black Sea region and caused a near-collapse in exports to Russia
PremiumIndia’s exports to Russia have exceeded the levels before the war outbreak in Ukraine, even as the conflict in Europe drags down global trade growth.
Led by engineering goods, drugs and pharmaceuticals, and organic and inorganic chemicals, India’s exports to Russia in February surged 25% from the preceding month to touch $337.58 million, commerce ministry data showed.
Russia’s invasion of Ukraine in February 2022 disrupted trade in the Black Sea region and caused a near-collapse in exports to Russia, a key market for Indian pharma, engineering and tea exporters. In March 2022, exports slumped to a record low of $69.2 million from $325.12 million in February 2022.
In the year that followed, India’s export mix to Russia underwent significant changes.
Before the war, engineering goods, electronics goods and drugs and pharmaceuticals accounted for over 60% of the total exports to Russia; these have since slipped below 50% as Russia began buying more agricultural commodities from India.
Between February 2022 and February 2023, agricultural exports to Russia rose from $37.24 million to $48.80 million, seafood exports from $4.04 million to $8.48 million, and coffee exports from $4 million to about $7 million.
However, imports from Russia continue to surge thanks to India’s appetite for cheap oil, making Russia its top source of oil in January.
India’s imports of Russian oil jumped to a record 1.4 million barrels per day (bpd) in January, up 10% from December.
Russia is currently the top oil seller to New Delhi, followed by Iraq and Saudi Arabia. Russia’s share in India’s total oil imports has jumped to 27% from 2% prior to the war and is expected to grow further.
An all-time favourite among China’s private refiners, seaborne Russian ESPO (Eastern Siberia Pacific Ocean) blend crude oil is starting to attract buyers in India, a trend that could intensify competition between two of Asia’s top oil importers, S&P Global Commodity Insights said.
The 4,188km-long ESPO oil pipeline exports crude oil from Russia to the Asian Pacific markets of Japan, China and Korea.
Although Indian refiners have remained tight-lipped about their recent ESPO deals, talk of multiple import deals being sealed by both private and state-run refiners in the country has already lifted premiums for the grade, S&P added.
“India’s renewed buying of ESPO, which is low sulfur, is largely attributed to balancing the refinery crude mix to maintain high refinery throughput and manage the intermediate stocks and ullage positions, so that refinery throughput doesn’t get affected," Sumit Ritolia, senior South Asia oil analyst at S&P Global Commodity Insights, said as per a report.
