The recent visit of Russian President Vladimir Putin to India was widely publicized across several countries and has attracted significant global attention. The warmth with which Mr. Putin was received by Prime Minister Narendra Modi was particularly noted, prompting policy planners worldwide to examine the implications of this cordial relationship for the global economy and political climate. India–Russia relations have stood on a strong foundation for decades and have consistently withstood geopolitical shifts. This is in marked contrast to India’s ties with the United States, which have experienced fluctuations under different U.S. administrations.
While the European Union and the United Kingdom, with tacit support from the United States, have sought to isolate Russia politically and restrict its oil and gas exports, India has played a decisive role in helping Russia overcome these obstacles by purchasing billions of barrels of crude oil. This has been done despite clear displeasure from Western powers. Notably, even when President Trump imposed a 50 percent tariff on Indian exports to the United States and insisted that India stop importing Russian oil, India did not yield to the pressure. This firm, principled stand has been recognized and appreciated by President Putin.
India has quietly built an annual trade relationship exceeding USD 60 billion with Russia, which has helped keep its economy stable and supported continued growth despite ongoing confrontations between Russia and the West. By buying Russian crude at competitive prices, India has kept inflation in check and ensured smooth industrial activity. Cooperation in technology—ranging from fertilizers and critical minerals to small modular nuclear reactors—continues to expand. The strategic effort to develop both sea and land transport corridors between the two countries is another significant highlight, as is collaboration in constructing ships capable of navigating the Arctic region.
India’s heavy dependence on imported crude oil and natural gas, however, poses a serious economic risk. The country imports around 250 million tonnes of crude oil annually, meeting nearly 85 percent of its needs, and roughly 40 billion cubic metres of natural gas, covering around half of its requirement. With India’s economy growing steadily, demand for these fuels is expected to rise by around 7 percent annually. Domestic production is unlikely to increase significantly in the foreseeable future, making India increasingly vulnerable to global price fluctuations. Any sharp or prolonged rise in international oil and gas prices—whether due to conflicts or other disruptions—could trigger a serious economic crisis.
There is widespread recognition that India must find alternative energy sources suited to its needs—sources that are environmentally sustainable and do not exacerbate the climate crisis. Coal, though abundantly available in India, is not environmentally acceptable. Nuclear power is a viable eco-friendly option, and Russia has supported India by helping set up six nuclear power units in Kudankulam, Tamil Nadu. Two units are already operational, and the third and fourth are scheduled for commissioning by December 2027. Meanwhile, the 500 MWe Prototype Fast Breeder Reactor at Kalpakkam, also in Tamil Nadu, is nearly complete. However, nuclear power alone cannot meet India’s rapidly growing energy demand, and its contribution to reducing import dependence will remain limited.
Methanol, a crucial chemical and fuel substitute, offers an opportunity India has not sufficiently tapped. It serves as a feedstock for producing ethylene, propylene, and other derivatives currently made from crude oil and natural gas. It can also be used as a fuel, either directly or in the form of dimethyl ether (DME), which can substitute for LPG. Methanol could therefore significantly reduce India’s reliance on crude oil and natural gas both as feedstock and as fuel. Yet India itself faces a shortage of methanol and remains heavily import-dependent. Several domestic methanol plants remain shut due to the high cost of natural gas, which makes locally produced methanol uncompetitive.
The most practical solution for India is to produce methanol in Russia, where natural gas is abundantly available, and transport it to Indian markets. Given Russia’s strained ties with the EU and the UK and its need to find alternative outlets for its natural gas, such a collaboration would be mutually beneficial. The Government of India should negotiate an agreement with Russia to establish large-scale methanol plants operated by Indian companies in Russia and secure long-term methanol supplies for India. Despite numerous agreements signed during President Putin’s recent visit, this crucial proposal was not discussed. The omission represents a missed opportunity, and it appears that the Indian delegation failed to raise the matter.
However, given the strength of India–Russia relations, it is not too late. The Government of India should take up the methanol project with Russia, which is likely to respond positively. As India faces the continued risk of energy shocks due to volatile global oil and gas prices, transitioning toward a methanol-based economy is not merely desirable but necessary. Ensuring the availability of methanol on a large scale and expanding the production of methanol-based derivative products—many of which are currently imported—will help stabilize India’s industrial sector and overall economy. Promoting a methanol economy is an essential strategy for India’s future energy security.
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*Trustee, Nandini Voice for the Deprived, Chennai
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