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Environment

Amidst Russian War in Ukraine, India’s New Arctic Policy Spotlights a Region in Turmoil

The announcement of India’s Arctic Policy, against a background of conflict and climate change, is a potential game-changer in Arctic geopolitics.

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India’s release of its year-long pending Arctic policy, entitled ‘India and the Arctic: Building a Partnership for Sustainable Development’, has drawn considerable global attention amid growing strategic engagements in the Arctic region in the wake of Russia’s invasion of Ukraine. It has come at a time when the major powers in the Arctic Council have turned against its current chairperson, Russia, which has been charged with violating basic principles of international law in Ukraine, a country of strategic importance for Europe in terms of its connectivity with other neighbouring regions, including the Arctic.

More importantly, all the major member countries in the Arctic Council have expressed their displeasure over India’s silence on the Russian invasion and its ‘new quiet diplomacy’ in the international fora. Added to their anguish is India’s decision to import oil from Russia, which has been facing international sanctions for its attack on Ukraine. In this regard, India understands that Russia, which has faced sanctions on vital sectors such as energy, can be relied on for its own energy needs in the midst of the war, despite the escalating global oil price.

The March 2022 announcement of India’s Arctic Policy (IAP), in that sense, is a potential game-changer in the geopolitics of the region. However, India also knows that all is not well with the emerging Arctic dispensation, with NATO reasserting itself in the region, Russia consolidating its position and China seeking to realise its long-term dream of a ‘Polar Silk Road’ in collaboration with Russia.

Scientific and technological contours

Plausibly, India has vital stakes in the Arctic region, as an active player here and as an observer in the Arctic Council. However, in terms of scientific engagement and development collaborations with its partners, its Arctic policy has far broader implications.

IAP was initially notified as a draft policy a year ago, and the final policy document comes as a reiteration of the original script. IAP could reasonably be placed within its ‘science diplomacy’, given the ambit of its techno-scientific power. India has a large scientific community, and robust scientific and technical human resources. There has also been a notable improvement in India’s R&D expenditure and science and technology publications, as recorded by the Ministry of Science and Technology.

The IAP stands on six pillars:

“strengthening India’s scientific research and cooperation; climate and environmental protection; economic and human development, transportation and connectivity; governance and international cooperation; and national capacity building in the Arctic region.”

The policy document says that IAP can be implemented in collaboration with multiple stakeholders, such as academia, the research community, businesses and industry. It aims to reinforce “national capabilities and competencies in science and exploration, climate and environmental protection, and maritime and economic cooperation with the Arctic region.”

The policy also seeks to strengthen institutional and human resource capacities with the involvement of different stakeholders. IAP is designed as a comprehensive policy matrix that will help formulate “analysis, prediction, and coordinated policymaking on the implications of ice melting in the Arctic on India’s economic, military, and strategic interests related to global shipping routes, energy security, and exploitation of mineral wealth.”

Unlike the draft document, IAP has an additional section for “climate and environmental protection”, which underlines how climate change is critical for the agro-climatic conditions of countries like India, whose food security depends significantly on ecosystem stability.

There are, of course, several areas of collaboration between polar studies and the study of the Himalaya. It is expected that Arctic research will support the scientific community in analysing the melting rates of the third pole – the Himalayan glaciers. The National Centre for Polar and Ocean Research has itself noted that “the process of glacier retreat has been significantly enhanced in both the regions.” Thus, IAP is expected to facilitate comparative scientific studies of the Arctic and the Himalaya.

Representative image of the Himalaya. Photo: Mamun Srizon/Unsplash

Geopolitical challenges, economic opportunities 

IAP also seeks to deepen India’s cooperation with countries of the Arctic region under various Arctic fora, including as the Arctic Council. However, in the emerging global situation, it would be a challenging task before India to increase its participation given the complex issues associated with Russia.

India knows that Arctic governance is very sensitive in the current geopolitical milieu. The region itself is governed by several national domestic laws, bilateral agreements, global treaties and conventions and customary laws for the indigenous peoples. Thus, the Arctic states’ “respective sovereign jurisdictions as well as areas beyond national jurisdiction” need to be viewed within the framework of international and national regulations. This is, of course, a contested area where the Western powers in the Arctic Council challenged Russia’s extra-territorial claims in the name of its long northern coastlines.    

India is one of 13 nations holding ‘Observer’ status in the Arctic Council, an intergovernmental forum established in 1996 that deals with issues of the Arctic governments and the indigenous people of the region.  It is here that the Ukraine war has a direct impact on the geopolitics of the Arctic. The eight-member Arctic Council has five NATO members: Canada, Denmark, Iceland, Norway and the US.

Following the Russian invasion of Ukraine, seven of the eight Arctic states declared that they would ‘pause’ the work of the Council. In a joint statement, the seven Arctic states also condemned Russia’s “unprovoked invasion” of Ukraine and underscored “the grave impediments to international cooperation, including in the Arctic.”

Russia became chair of the Council in May 2021, and even as its role was challenged, the agitated members sought to halt all working group meetings in view of the country’s “flagrant” territorial aggression. A similar issue had happened earlier: after the Russian annexation of Crimea in 2014, they were not permitted to attend any Arctic meetings on security. Anyhow,  in response to the new situation, Russia warned that any temporary freeze would “inevitably lead to the accumulation of the risks and challenges to soft security in the region”.

Meanwhile, even as the West imposed sanctions on Russia, a few major oil investors issued a statement that they would be withdrawing from projects with Russia, including in the Arctic. British Petroleum announced that it would exit its shareholding in Russia’s Rosneft and that its involvement with the state-owned enterprise could not continue. This will certainly affect Russia’s Vostok oil project in the Arctic.

Norway’s international energy firm, Equinor, declared that it will stop new investments in Russia and will exit joint ventures. Shell also announced its intention to exit its joint ventures with Gazprom and related entities, including its stakes in the Sakhalin II liquefied natural gas facility, its 50% stake in the Salym Petroleum Development and the Gydan energy venture. It also announced that it would end its involvement in the Nord Stream 2 pipeline project.

A similar announcement came from ExxonMobil, one of the world’s largest energy providers, which has stakes in the Sakhalin I project on behalf of an international consortium of Japanese, Indian and Russian companies. Norges Bank Investment Management, Trafigura and TotalEnergies are the other major firms that have decided to halt Arctic-related projects.

With major stakeholders, such as Rosneft, withdrawing from Russia, India’s state-run Oil India Ltd. (OIL) is now in trouble. Actually, India was planning to invest in Novatek’s Arctic LNG 2 project as part of its energy profile expansion. Russia also lost a major deal when Germany blocked the Nord Stream 2 Baltic Sea gas pipeline project, constructed to boost the flow of Arctic Russian gas directly to Germany.

While Ukraine saw it as an “existential threat” insofar as it would relieve Moscow’s dependence on Ukraine, the US feared that the project would reinforce Moscow’s influence over Europe, with Russia providing 40% of the EU’s total gas supply.

Evidently, India is in a strategic dilemma as to how to get on well with several pending projects that it has inked recently. For example, an MoU was signed between NITI Aayog and the Ministry for Development of the Russian Far East and Arctic on September 4, 2019, with a view to boosting “the strategic partnership between India and Russia by strengthening cooperation in trade, economics and investment.”

The agreement sought to “prepare a programme for the development of the Russian Far East and Arctic region for 2020-25”.

Similarly, India and Russia were exploring the possibilities of the joint development of hydrocarbons on the Arctic shelf and Russia’s Far East. Reports indicated that the sides were mainly focused on energy cooperation, and exports of Russian hydrocarbons to India were expanding, with the two countries’ mutual interest in the implementation of joint LNG projects persisting.

India’s energy ties with Russia have grown in significance over the years. During Vladimir Putin’s visit to India a few years back, both Russia and India had pledged to collaborate in oil and gas projects in Russia, including Russia’s Arctic shelf, and on the shores of Pechora and Okhotsk Seas. It was reported that Russia was already supplying India with Arctic liquefied natural gas, while in 2017 Rosneft bought a 49% share of India’s Essar Oil Ltd.

It was interpreted at the time that these deals were part of “a quid pro quo in return for India’s defiance of US sanctions and a signature on contracts to acquire Russia’s S-400 air defence system in agreements totalling $5.5 billion. The extent of bilateral energy deals had already reached a figure of $23 billion, including $13 billion for the shares of Essar Oil, and $10 billion Indian investment in Russian energy firms.”

In October 2018, Stephen Blank noted that Russia had long sought Indian equity investment in Russian energy firms, especially in the expensive Arctic region, while India, whose energy requirements were immense and growing, had substantially upgraded its quest for influence in the region. He said that “these deals admirably meet both sides’ needs for energy sources and customers in difficult circumstances (e.g. given US sanctions on Russia, and India’s constant problems in ensuring energy security).”

Blank further said that “these sales confirm to all observers that India continues to act as an independent, unattached major power even if its ties to the US continue to grow in scale and scope. India’s gamble that it can escape legislatively mandated US sanctions due to these deals is probably warranted precisely because of its independent status and ability to attract sellers from all over the globe.”

Evidently, Moscow’s long-standing partnership with New Delhi has always made Russia “inclined to solicit Indian investment in the Arctic and other energy holdings.”

A view shows a well head and a drilling rig in the Yarakta Oil Field, owned by Irkutsk Oil Company (INK), in Irkutsk Region, Russia March 11, 2019. Photo: Reuters/Vasily Fedosenko

Myth of ‘Arctic exceptionalism’

Chelsea Harvey wrote in Scientific American earlier this month that “Russia’s invasion of Ukraine could spill into the polar region and potentially affect science and security.” He said that “recent events expose the myth of ‘Arctic exceptionalism’ – the idea that the Arctic is impervious to, or at least isolated from, the conflicts plaguing the rest of the world.”

Similarly, writing in Foreign Policy, Robbie Gramer and Jack Detsch opined that “Russia’s war in Ukraine has already altered Arctic diplomacy.” With the Arctic Council “thrown into upheaval over Putin’s invasion,” Gramer and Detsch continued, the conflict situation “risks upending all of that, melting away decades of efforts to demilitarise the region from the heyday of the Cold War and focus on scientific, economic, and trade cooperation.”

Following Russia’s invasion of Ukraine, Arctic geopolitics witnessed a surge in big power rivalry, with the US, Russia and China weighing the costs and benefits of employing military and economic power to maintain their hegemony in the region. While the US National Security Strategy sought to upgrade  the Arctic “as a corridor for expanded strategic great power competition between two regions – the Indo-Pacific and Europe,” its new Arctic strategy says that the Army must “organise to win in the Arctic” and that the region represents “an arena of competition, a line of attack in conflict, a vital area holding many … natural resources, and a platform for global power projection.”

Russia’s Arctic policies are enunciated in two major documents: The Foundations of the Russian Federation’s State Policy in the Arctic until 2020 and Beyond, adopted in September 2008; and The Strategy for the Development of the Arctic Zone of the Russian Federation and National Security Efforts for the Period up to 2020, adopted in 2013. Both underline the strategic importance of the Arctic as a major store of natural resources by 2020, and pointed out the security challenges emerging from the enhanced accessibility of the Arctic region.

Similarly, China has lately taken great interest in exploiting the sea lanes, as a non-Arctic state, to access Arctic mineral resources and fishing waters. It also came up with its own Arctic policy in 2018, assuming itself to be a “near-Arctic state” with a major determination in building a ‘Polar Silk Road’.

It is here that both China and Russia have a great interest in developing the ‘Northern Sea Route’ as a new geopolitical circuit connecting with Europe and beyond. China also recently noted that the Polar Silk Road has “gained renewed attention following its rapid growth in supporting regional economy and securing energy supplies amid volatility throughout global supply chains posed by an ongoing pandemic in many parts of the world.”

India also has great interest in the realm of transportation and connectivity, as noted by its Arctic policy. According to India’s IAP, “India ranks third in the list of seafarers supplying nations catering to almost ten per cent of global demand. India’s maritime human resources could contribute towards meeting the growing requirements of the Arctic.”

India is hopeful that ice free conditions in the Arctic could help facilitate the opening of new shipping routes and thereby lower costs and reshape global trade. India also knows that the Arctic is rich with resources, including as much as 13% of the world’s undiscovered oil and 30% of its undiscovered natural gas reserves.

Oil import – bane or boon?

Meanwhile, India’s import of oil from Russia, amid the international sanctions, has garnered criticism from different quarters. Reports said that the state-run Indian Oil Corp. bought 3 million barrels of crude oil from Russia to secure its energy needs, resisting Western pressure to avoid such purchases. Officials claimed that New Delhi could do this as India has not imposed sanctions against buying oil and will be looking to purchase more from Russia despite calls not to from the US and other countries.

The US, Britain and other Western countries were putting a lot of pressure on India to avoid importing Russian oil and gas. There were also reports that Russia was offering a discount on oil purchases of 20%, below the global benchmarks. While these reports keep appearing, White House press secretary Jennifer Psaki said last week that India’s purchases of Russian oil wouldn’t violate US sanctions, but urged India to “think about” where it wants to stand “when history books are written”.

However, experts have already noted that Russia was not a major supplier of crude oil to India, accounting for less than 1% of the country’s requirements and not figuring among the top 10 sources. Instead,  India has been highly dependent on imports from West Asia, with Iraq accounting for 23%, Saudi Arabia 18% and the United Arab Emirates 11%.

There are also reports that India’s imports from the US are also likely to increase by nearly 11% in the current year and that its market share will be around 8%. Given the West’s relative share of India’s oil import volume, they may not be so antagonistic to India’s diversification of oil import regime – as long as their share is maintained at a higher level without any disruption.

The upshot of the emerging scenario is that the Arctic has become geopolitically very sensitive with the Russian invasion of Ukraine, and the region is also “politically warming” far more rapidly than at any time in history. India knows that the situation will get further complicated when major powers like Russia, the US and China transform the Arctic into a geopolitical terrain for security leverage, big business and power projection.

Understandably, India’s Arctic policy is set in a framework of multilateralism with an emphasis on rule-based governance architecture in the region. How this can be realised amid growing big-power rivalry is a real challenge for India’s science diplomacy as well as for its politico-economic multilateral engagements. 

K.M. Seethi is an ICSSR Senior Fellow and an academic advisor to the International Centre for Polar Studies (ICPS), and director, Inter-University Centre for Social Science Research and Extension (IUCSSRE), Mahatma Gandhi University, Kerala.