The Russia-Ukraine war and the stringent sanctions on Russia by the West have thrown up more opportunities for India’s businesses than earlier anticipated.
Defence production and maintenance, shipbuilding and oil refining are three areas where Indian firms are already beneficiaries or have at least received enquiries from potential importers.
India’s petroleum products exports, which surged 161% in FY22 to $67.5 billion, partly driven by a rise in prices, will get a further fillip in the current year with several European countries resorting to India to source refined products from Russia’s Urals crude, which is out of bounds for them.
Currently, discounted Russian crude allows private Indian refiners Reliance and Nayara to realise over $15-$18 per barrel from the export of refined products to Europe and the US. This compares with $7-$9 per barrel in March-April when the majority of discounts were taken by traders.
Among the top importers of oil products products from India last fiscal, only Netherlands figured from Europe, while the bulk of the shipments were to Singapore, the US, Australia, South Korea and Indonesia.
According to sources, hit by supply disruptions, Russia’s defence companies have approached Indian firms seeking to buy various components for naval shipbuilding and defence equipment. These firms are also looking to recruit Indians as the exit of skilled shipbuilding professionals, post the breakout of war, has created a manpower shortage.
Some European companies, which purchased defence and shipbuilding articles from Russia, now want India to assemble these products and supply them. Further, firms from Africa and South East Asia, which have conventionally been reliant on Russian defence platforms, now want India to provide the maintenance repair and operations (MRO) services for such equipment. Several Indian firms have been approached by original equipment manufacturers from Russia and Europe for joint venture participation.
The firms have agreed to give the technology support needed for creating manufacturing and assembling facilities in India. Russian industry is also keen to participate in the civil mercantile marine area to build platforms and ships for the Inland Waterways Authority projects — National Waterways-I from Varanasi to Paradip and other infrastructure building activities.