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South Asia Brief: Russian Oil Shipment Arrives in Pakistan
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Welcome to Foreign Policy’s South Asia Brief.
Welcome to Foreign Policy’s South Asia Brief.
The highlights this week: The first Russian crude oil shipment arrives in Pakistan after a deal between the countries, Cyclone Biparjoy approaches India and Pakistan, and Sri Lanka shows signs of economic recovery.
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Pakistan Receives Russian Oil Shipment
A Russian cargo ship delivered barrels of crude oil to Karachi, Pakistan, last Sunday. It was the first shipment in a deal struck in April to send 100,000 metric tons of Russian crude to the country, more than a year into cash-strapped Russia’s war in Ukraine.
The agreement highlights a surge in cooperation between Russia and Pakistan as the special relationship between Russia and India experiences some challenges. It is also indicative of how countries in the global south are seeking to balance relations with Moscow and the West in the wake of the war in Ukraine.
Russia-Pakistan ties frayed during the Cold War as Islamabad aligned with Washington. The relationship picked up during the later years of the U.S.-led war in Afghanistan as their interests converged around counterterrorism and reconciliation with the Taliban. When former Pakistani Prime Minister Imran Khan visited Moscow at the moment Russia invaded Ukraine in 2022, energy was already on the agenda.
Pakistan’s current government has also seemed open to energy deals with Russia. It initially described the April deal as a trial run, but this week Pakistan’s petroleum minister said that it aims to fill one-third of its oil import needs with Russian crude. (Historically, Pakistan has imported much of its oil from Saudi Arabia and the United Arab Emirates.)
And Moscow has laid on the charm: On Monday, Russian Foreign Minister Sergei Lavrov marked 75 years of bilateral relations with an effusive speech, concluding in Urdu: “Long live Pakistan-Russia ties.”
Russia is also deepening ties with China, resulting in scaled-up Russian arms shipments to Beijing—and raising concerns in New Delhi that Moscow could scale back military cooperation under Chinese pressure.
However, it’s premature to speak of a reconfiguration in Russia’s relations with Pakistan—or India. The energy cooperation between Moscow and Islamabad is significant, but it may not be sustainable. Pakistan is in the middle of an economic crisis, which calls into question its ability to finance the cost of refining Russian crude oil. Experts in Pakistan fear that the imports won’t bring down already-high domestic petrol prices.
Pakistan also doesn’t want to antagonize the United States, which wields strong influence over global financial institutions. Islamabad likely won’t agree to oil deals with Moscow that exceed the price cap agreed upon by Western countries, as it could trigger U.S. sanctions. Then there are geopolitical concerns. Pakistan wants to project itself as neutral toward Russia and Ukraine and has reportedly sent small arms to Kyiv. Some energy imports from Russia balance the scales, but too many shipments could tip them over.
Meanwhile, India and the United States have begun implementing foundational defense deals that strengthen communication and intelligence-sharing. In New Delhi last week, U.S. Defense Secretary Lloyd Austin discussed fast-tracking technology transfers. This comes as Russian missile defense shipments to India have been delayed amid the war in Ukraine, boosting U.S. officials’ arguments that cash-strapped Russia will eventually start to look like an unreliable security partner for India.
For now, though, India remains firmly committed to its partnership with Russia. Even as it increases defense cooperation with Washington, New Delhi is not fully convinced that Western partners can supply it with the military equipment that it has long received from Moscow, especially at comparable prices. India could argue that Russian arms shipments strengthen its capacity to deter China, as long as Beijing doesn’t sway Moscow to curb the sales.
Both India and Pakistan continue to balance relations with Russia and the West. So does nearby Bangladesh, which has blocked dozens of U.S.-sanctioned ships while conducting other transactions with Russia in Chinese currency. This all reflects a pattern across the global south, where Russia still enjoys influence—even as countries seek commercial cooperation with the West.
What We’re Following
Storm approaches India, Pakistan. A large cyclone is expected to make landfall on the coasts of India and Pakistan on Thursday. The areas projected to suffer the most impact from Cyclone Biparjoy are the ports of Karachi, Pakistan, and Mundra and Kandla in the Indian state of Gujarat. The storm, which is equivalent to a Category 2 hurricane, already produced heavy winds and rain earlier this week, resulting in seven deaths in Gujarat.
Gujarat is home to a large oil refining facility operated by Reliance Industries, and the company suspended exports from at least one port in the state due to the storm. India’s largest coal import terminal is also located at the Mundra port. India and Pakistan’s governments have each announced evacuation efforts for vulnerable communities.
The cyclone is the latest reminder of South Asia’s exposure to extreme weather and other effects of climate change. Last month, another large cyclone hit Bangladesh and neighboring Myanmar. The region is also especially vulnerable to coastal weather emergencies because some of its largest cities are located along the coastline: Karachi; Mumbai; Kolkata; and Dhaka, Bangladesh; have a combined population of nearly 70 million people.
Pakistan passes new budget. Pakistan’s government announced its budget for the new fiscal year, which begins July 1, last Friday. This year’s budget is especially important because Pakistan faces one of its worst economic crises in decades—inflation recently approached 40 percent—and it needs to show its commitment to austerity measures so it can unlock new financial assistance from the International Monetary Fund (IMF).
The government’s challenge is to fulfill the IMF’s austerity conditions while ensuring sufficient spending to ease the economic stress on the public. The budget seems to emphasize the latter, which could deliver the government a much-needed political boost ahead of elections—but could also rule out IMF support.
Pakistani Finance Minister Ishaq Dar said the budget’s spending total target will be around $50 billion, but total tax revenue is only projected to be $32 billion. Financial analysts say the new budget does not include paths to the structural reforms sought by the IMF, such as more liberalization and privatization of the economy. The Pakistan Business Council has said the budget makes an IMF agreement “doubtful.”
Sri Lanka eases import limits. Colombo ended import restrictions on 286 items last Sunday amid indications that Sri Lanka is beginning to recover from its devastating economic crisis, which led the country to default on its debts last year. In March, Colombo inked an IMF deal for $2.9 billion in bailout assistance, and in recent months its foreign reserves have replenished. Higher remittances and a surge in tourism revenues have likely helped as well.
Although relative political stability has also returned since then-Sri Lankan President Gotabaya Rajapaksa resigned under pressure last summer, the country remains politically volatile. Last week, hundreds of students protested in Colombo to demand the release of anti-government activists arrested last year; authorities responded with tear gas.
Many Sri Lankans are unhappy with the current government because of its ties to the powerful Rajapaksa family, suggesting true stability may only follow elections scheduled for 2024.
Under the Radar
India’s new parliament building, inaugurated last month, displays a striking map that shows India, Pakistan, Nepal, Bangladesh, Sri Lanka, Myanmar, and part of Afghanistan under the title Akhand Bharat, or “unbroken India.” In other words, the map depicts much of present-day South Asia as part of a unified India.
The idea of Akhand Bharat has long been embraced by India’s Rashtriya Swayamsevak Sangh (RSS), a Hindu nationalist organization with close links to the ruling Bharatiya Janata Party (BJP), as Sushant Singh argued in Foreign Policy last year.
Unsurprisingly, the map inside the parliament building has attracted negative attention from several Indian neighbors. Pakistan lambasted it as “a manifestation of a revisionist and  expansionist mindset.” Bangladesh asked its embassy in India to seek an explanation from New Delhi. And senior opposition leaders in Nepal, including former Prime Minister K.P. Sharma Oli, have criticized the map.
Indian officials insist the map is purely historical and carries no contemporary political connotations. Nepal’s Prime Minister Pushpa Kamal Dahal endorsed this explanation after visiting New Delhi last week. But it won’t appease the critics. Furthermore, at least one Indian official has suggested otherwise: On the day the building opened, the minister for parliamentary affairs, Pralhad Joshi, tweeted a message with a photo of the map that translates to “The resolve is clear—Akhand Bharat.”
The harshest critics of India’s BJP will no doubt see the map as a sign that the party favors the idea of taking its Hindu nationalism beyond India’s current borders.
FP’s Most Read This Week
Regional Voices
Writer Beelam Ramzan argues in the News International that Pakistan is squandering opportunities to strengthen its soft power. “Our multiethnic culture is hostile to others; our political credibility is eroded … the strength of our diplomatic network is waning; the economy is near default; and our foreign policies in the world lack legitimacy and moral authority,” she writes.
In the Kathmandu Post, researchers Ishwari Bhattarai and Kiran Dahal lament that Nepalese members of parliament don’t promote responsible debate. They are “frequently guided by perceptional assertions and arguments during legislative debates,” the researchers argue. “Such assertions and arguments are often unsupported by facts and evidence or ‘incomplete’ information.”
A Dhaka Tribune editorial calls for more youth involvement in Bangladesh’s politics to make the country a more prosperous and equitable place: “It is the youth who will have to be empowered with leadership positions and given the green light to make the sort of choices that the older generations simply were unable to [make].”
Michael Kugelman is the writer of Foreign Policy’s weekly South Asia Brief. He is the director of the South Asia Institute at the Wilson Center in Washington. Twitter: @michaelkugelman
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