As the war in Ukraine enters its second week, reports of Russia’s advances and Ukrainian defense success vary by media agencies and countries. The United States and its allies have imposed the most stringent package of sanctions on Russia, unprecedented enough that the involvement of America’s allies has widened. India’s position on sanctions is that these sanctions violate international law unless approved by the United Nations. This approach seems strange today, when sanctions on countries have become weapons of diplomacy, when the emphasis is on the economic advantage of the strong over the weak. Now there are secondary sanctions, under which a third country can also be punished because it is taking someone’s side. To be punished like this is indeed the prerogative of a strong country.
Since the annexation of Crimea in 2014, the US and its allies have imposed a number of sanctions on Russia for violations of international law. Visa restrictions, asset confiscations, region and technology specific restrictions were also in place, and trade in dollars and euros was also capped. Of course, over the years they limited the growth of the Russian economy, but could not bring Russia to its knees. The main reason for this is the heavy global dependence on Russian hydrocarbons and other commodities, so despite the embargo, there was ample scope for trade and investment in Russia to protect Western economies from major side effects.
More attention is still being paid to military attacks, horrific images of civilians trapped in double-sided firefights, people fleeing war zones and hiding to escape bombings. It appears to be strangling Russia’s economy by blocking Russia’s access to its own central bank reserves, as well as taking measures to oust Russia’s major banks from Western financial markets and cutting Russia out of the global banking system. Multinational oil companies have announced to withdraw their investment of billions of dollars from Russia. Foreign shipping, logistics, technology and manufacturing companies have postponed their trade with Russia. America and Europe will target the assets of Russian oligarchs under their jurisdiction. There is also a lot of toughness with Russia on the technology front.
However, it is a historical fact that sanctions seldom deter an arch-rival. But such restrictions definitely reduce the economic and military power over time. Such sanctions are also like double-edged swords, which cause pain even to the countries that impose sanctions. But mind you, the consolidated political pressure and economic sanctions go far beyond the normal, this is a deep ‘surgical strike’ aimed at achieving immediate results. Now the question is whether and how soon can the purpose of Western sanctions be covered or fulfilled?
The purpose of the war for Vladimir Putin is the demilitarization of Ukraine, but what this will ultimately lead to is not disclosed. Broadly speaking, an acceptable outcome for Russia could be an agreement that guarantees the neutrality of Ukraine and the non-deployment of NATO troops and weapons within Russia’s territory. However, the US and its allies have not yet disclosed the final nature of their sanctions. He hopes that the economic disruption and dissatisfaction created by strong external pressure will force President Putin on his way. Some might even expect a wave of protests to oust Putin. This is the minimum objective for NATO to withdraw Russian troops from Ukraine. NATO countries would also like to guarantee the security of countries around Russia, including Ukraine. They would naturally want Russia to come to the fore as soon as possible, to justify the need for sanctions. Meanwhile, the economies of NATO countries will increasingly feel the pain. Globally the prices of things will increase. By the way, US President Joe Biden has announced that the US and 30 other countries will release 60 million barrels of oil from strategic reserves around the world to reduce oil prices, which is about 60 percent of a day’s global oil consumption.
The situation, as it appears, is hopeless, so a window can be created for compromise between Russian action and the strong West’s response. Russia’s negotiating power will be determined by military results and domestic flexibility; The position of the West will depend on how long it can bear the pain of sanctions. The agreement that emerges will be just a general ointment on existing wounds or will the underlying problems be addressed in depth. This is an open question today, when the framework of European security is broken. Now no doubt, India will be naturally affected by the rise in prices of many commodities due to war and sanctions. However, our bilateral economic relations with Russia will be less affected. India opposed the sanctions imposed on Russia after 2014, but for a number of reasons our businesses in the Russian markets were at limited risk. The bilateral monetary arrangement has kept defense cooperation between the two countries intact and India also faces the threat of sanctions due to US law, the Countering America’s Adversaries Through Sanctions Act (CAATSA).
It is certain that due to the persistence of tension for a long time, the pressure on India to take one side will increase. So far India has not done so only because the geopolitical situation connects India to all the heroes of war in different ways. It will remain so even after the current bad situation improves.
(These are the author’s own views)