Why in News?

India has emerged as the largest buyer of Russian oil in 2024, surpassing China.  Strengthening this trade relationship, the newly operational Eastern Maritime Corridor (EMC) between Chennai and Vladivostok has revolutionised trade logistics, reducing shipment times and costs significantly.

This route has become instrumental in boosting the trade of crude oil, coal, and other commodities between the two nations.

What’s in Today’s Article?

• Key Highlights of the Eastern Maritime Corridor
• India’s Crude Oil Imports from Russia
• Strategic and Economic Significance of EMC for India
• Conclusion

Key Highlights of the Eastern Maritime Corridor:

• Reduced transit time and costs:
  • The Chennai-Vladivostok route spans 5,600 nautical miles, reducing transit time to 24 days compared to over 40 days via the traditional St. Petersburg-Mumbai route.
  • Savings are realised in both shipment time and transportation costs, making Russian crude oil more accessible and affordable for India.
• Strategic ports in operation:
  • Vladivostok: Russia's largest Pacific port, situated near the Sino-Russian border, serves as the primary starting point.
  • Indian ports: Major eastern ports like Chennai, Paradip, Visakhapatnam, Tuticorin, Ennore, and Kolkata are utilised for receiving shipments based on cargo type and destination.
• Key commodities traded:
  • Imports from Russia: Crude oil, coal, fertilisers, vegetable oils, and iron and steel dominate both value and quantity metrics.
  • Exports to Russia: Processed minerals, iron and steel, tea, granite, marine products, and processed fruits are leading commodities shipped from India.

India’s Crude Oil Imports from Russia:

• Dominance of the Urals crude grade:
  • India surpassed China as the largest buyer of Russian oil in July 2024.
  • Despite a decline in overall imports in the latter half of the year due to refinery maintenance, imports of Urals crude reached a four-month high in October, accounting for over 75% of Russian oil imports.
• Competitive pricing benefits:
  • India capitalised on discounted Russian crude following Western sanctions post-Ukraine war (February 2022).
  • Although discounts have narrowed, the savings on bulk purchases and reduced shipping costs via the EMC continue to incentivise Indian refiners.

Strategic and Economic Significance of EMC for India:

• Strengthening bilateral ties:
  • The EMC facilitates greater economic engagement, helping balance Moscow’s increasing tilt toward China.
  • A strong trade relationship aligns with India’s broader strategic interests, including its defence reliance on Russia.
• Diversification of energy supplies:
  • With an 85% dependency on oil imports, India’s growing trade with Russia diversifies its energy portfolio.
  • Affordable Russian oil bolsters India’s energy security and economic stability.
• Upcoming diplomatic engagement: Russian President Vladimir Putin is scheduled to visit India in 2025, signaling the importance of this evolving partnership.

Conclusion:

• The operationalisation of the EMC has emerged as a game-changer in India-Russia trade, significantly reducing transit times and costs.
• By leveraging this route, India has solidified its position as a major buyer of Russian crude while diversifying its energy imports.
• Beyond economic gains, the corridor enhances India’s strategic leverage, ensuring deeper engagement with Russia amidst shifting global dynamics.