NEW DELHI: The United States has warned India of “consequences” if it conducted rupee-rouble trade with Russia, or buy oil from the country much of the western bloc has placed under crippling sanctions, reports said on Thursday.
“There will be consequences for any country, including India, that conducts local currency transactions through Russia’s central bank or constructs a payment mechanism that subverts or circumvents the United States’ sanctions against Russia,” The Hindu said, quoting remarks in New Delhi by visiting US Deputy National Security Advisor for International Economics Daleep Singh. Mr Singh was in New Delhi hours before Russian Foreign Minister Sergey Lavrov landed.
In a first for the US administration, Mr Singh also publicly stated that India must not expect that Russia, as a “junior partner” of China, would assist India if there were more incursions along the Line of Actual Control, The Hindu said.
“I come here in a spirit of friendship to explain the mechanisms of our sanctions, the importance of joining us, to express a shared resolve and to advance shared interests. And yes, there are consequences to countries that actively attempt to circumvent or backfill the sanctions,” Mr Singh told journalists between his official meetings.
“We are very keen for all countries, especially our allies and partners, not to create mechanisms that prop up the [Russian] rouble, and those that attempt to undermine the dollar based financial system,” he said in reply to a question from The Hindu.
This week, officials of the Bank of Russia, the country’s central bank, met Reserve Bank of India officials to discuss alternative payment mechanisms and routing through banks that are immune to international sanctions, and India’s External Affairs Minister S. Jaishankar told parliament that a special inter-ministerial group led by the finance ministry had been tasked with resolving the payment issues for import and export with Russia caused by the sanctions.
When asked how India’s ties with Russia could affect its partnership with the US in the Quad, Mr Singh, according to The Hindu, said there was a “shared recognition in the Quad that China is a strategic threat to a free, open and secure Indo-Pacific.”
“Russia is going to be the junior partner in this relationship with China. And the more leverage that China gains over Russia, the less favourable that is for India, I don’t think anyone would believe that if China once again breached the Line of Actual Control, that Russia will come running to India’s defence,” he observed.
Singh declined to comment on what the “consequences” he referred to were, and whether the US would consider India’s purchase of the S-400 missile system from Russia, which has used a “rupee-rouble” alternate payment mechanism thus far, as eligible for the new sanctions as well as previous sanctions under the CAATSA (Countering America’s Adversaries Through Sanctions Act).
He would rather keep those discussions with the government “private”, he added.
While Mr Singh’s message was put more plainly, his words mirror comments by European Union and German officials in Delhi this week, who said that India must not take “economic advantage” of western sanctions, nor seek to dilute them during the war.
Published in Dawn, April 1st, 2022