India is the world’s top buyer of Russian weapons, which it uses to deter aggression from neighbors Pakistan and China — two countries that have long cooperated on defence. While the US had traditionally sought to balance ties between India and Pakistan, which for years was an important partner in Afghanistan, more recently it has courted New Delhi to counter China.
Live updates: Ukraine-Russia conflict
India may look at increasing tax on some goods and services in a step toward moving to a simpler structure with fewer rates, according to people familiar with the matter.
“You have a neighbor, who joins hands with another neighbor, both of whom are against me,” finance minister Nirmala Sitharaman said in an interview in Washington Friday. “In the context of the Russia-Ukraine war, God forbid, if there are alliances created, India has to be strong enough to protect itself.”
Prime Minister Narendra Modi’s government has already conveyed this “unique” geopolitical position to the US, Sitharaman added. A senior US diplomat on Thursday again warned China of sanctions if it offers “material support” for Putin’s war, while also pledging to help India end its dependence on Russian weapons.
“India wants to be friends with the European Union and the Western, free, liberal world, but not as a weak friend that needs desperate help here and there,” Sitharaman said.
“Unless I am strong, given the fact that I am geopolitically located in such an area, how do you expect me to even defend myself?” she said. “Not strong as an aggrandizer or expansionist, but strong to defend our own 1.3 billion people — both politically, strategically and, equally important, economically.”
When asked if India is still looking for an alternate payment mechanism for Russia to overcome sanctions that locked Russia out of the Swift international payments system, Sitharaman said “at the moment there is no transaction of that significance.” She didn’t elaborate.