India will back the price cap on Russian crude oil proposed by the United States only if supplies of oil from countries like Iran and Venezuela are assured, according to reports.
India is dependent on imported crude to meet over 85 per cent of its fuel requirements.
A situation in which open market prices rise due to uncertain and restricted supplies while a limit is imposed on cheaper sources would be unacceptable to India.
“How can discussion on cap happen when supply sources are restricted?” a government official was quoted by the Economic Times as saying.
“You can talk about a cap after Venezuela and Iran supplies are available in the market,” the official added.
During his visit to India earlier last month, US deputy treasury secretary Wally Adeyemo said that the Biden administration has invited India to join the Russia oil price cap coalition to reduce Moscow’s earnings from crude.
Adeyemo also claimed that India has shown “great interest” in the price cap proposal since it aligns with the objective of keeping energy rates lower for domestic consumers.
“If India is part of the coalition, it can have a say in deciding the price cap,” he had said in New Delhi.
On Friday (2 September), the G7 nations’ finance ministers agreed to impose the limit, deciding to work out its details later.
The G7 proposal to cap the price of Russian oil comes at a time when China and India scaled their crude purchases at discounted rates from Russia following the Kremlin’s invasion of Ukraine.