The recent visit by Russian President Vladimir Putin to India was widely publicized across several countries and received considerable global attention. The warmth with which President Putin was welcomed by Prime Minister Narendra Modi has been particularly noted, prompting policy planners in many nations to study the implications of this cordial relationship for the world economy and global political climate. It is well known that India–Russia relations have stood on a strong foundation for several decades and have endured the test of time. This stands in sharp contrast to India’s relations with the United States, which have fluctuated under different U.S. administrations.
While the European Union and the United Kingdom continue their efforts to isolate Russia politically and restrict its economy—particularly its crude oil and gas sales—India has significantly helped Russia overcome these challenges by purchasing several billion barrels of Russian crude oil, despite displeasure from the EU and the United States. Notably, India has remained firm even in the face of President Trump’s imposition of a 50% tariff on Indian exports to the U.S. and his insistence that India stop buying Russian oil. This principled stance has been well recognized and appreciated by President Putin.
India has quietly built an annual trade relationship exceeding $60 billion with Russia, which has enabled the Indian economy to remain stable and maintain its growth trajectory despite ongoing confrontations between Russia and Western nations. By purchasing Russian crude oil at competitive prices, India has been able to keep inflation in check and ensure uninterrupted industrial operations.
Technology exchange in areas such as fertilizers, critical minerals, and small modular nuclear reactors is also a notable aspect of India–Russia cooperation. The strategic importance of developing sea and land transport corridors between the two countries is another significant highlight, as is collaboration in building ships capable of navigating the Arctic region.
India imports large quantities of crude oil, and sourcing oil from Russia at competitive rates has benefited both nations. However, India faces an impending energy challenge due to its heavy dependence on imported crude oil, which currently amounts to around 250 million tonnes per year—meeting 85% of the country’s needs. India also imports about 40 billion cubic metres of natural gas annually, representing roughly 50% of its total requirement.
With India’s steadily growing economy, the demand for crude oil and natural gas—both essential sources of energy and feedstock—is expected to increase by around 7% per year. Domestic production is unlikely to grow significantly in the foreseeable future, meaning import dependence will continue to rise. Consequently, the Indian economy remains vulnerable to global price fluctuations in oil and gas, which are beyond India’s control. A serious economic crisis could unfold at any time if global prices surge for prolonged periods due to conflicts or other disruptions.
There is a clear realization that India must find alternative, environmentally friendly sources of energy that do not contribute to global warming while reducing import dependence on crude oil and natural gas. Coal, despite its abundance in India, is not eco-friendly and exacerbates the climate crisis. One viable solution is to expand nuclear power generation. Russia is supporting India in this regard through the establishment of six nuclear power plants in Kudankulam, Tamil Nadu, two of which are already operational. The third and fourth units are expected to be commissioned by December 2027. Meanwhile, the 500 MWe Prototype Fast Breeder Reactor at Kalpakkam, whose construction began in October 2004, is now 97.90% complete. Nonetheless, nuclear power alone will not be sufficient to meet India’s vast energy requirements and can only partially reduce the country’s dependence on imported oil and gas.
Methanol is a chemical of high relevance to India’s needs. It serves as a feedstock for producing derivatives such as ethylene and propylene—which are currently manufactured from crude oil and natural gas—and is also used in large quantities domestically. Additionally, methanol can serve as a clean energy source, either directly or through its derivative dimethyl ether (DME), which can substitute for LPG.
In short, methanol has the potential to replace crude oil and natural gas to a significant extent, both as a feedstock and as a fuel, thereby reducing India’s heavy import dependence. However, India currently faces a shortage of methanol and remains highly import-dependent, with several domestic methanol projects idled due to poor price competitiveness. Limited natural gas availability within India further constrains domestic methanol production.
The ideal solution is to produce methanol in Russia, where natural gas is abundant, and transport the methanol to India. The Government of India could enter into an agreement with the Russian government to establish large methanol production facilities in Russia, operated by Indian companies. Russia, facing strained relations with the EU and the UK, needs alternative markets for its natural gas, making such collaboration mutually beneficial. Setting up large-scale methanol production in Russia and transporting the output to India would be a win-win arrangement for both nations.
Despite the many agreements signed during President Putin’s recent visit to India, the methanol project was not discussed. This omission represents a missed opportunity for India, suggesting that Indian delegates failed to raise this critical subject during the discussions. Nevertheless, given the strong fundamentals of the India–Russia relationship, the Indian government should pursue this proposal with Russia, where it is likely to receive support and encouragement.
It is essential for India to protect itself from potential energy crises arising from high import dependence and volatile global prices of crude oil and natural gas. Promoting a methanol-based economy—by ensuring the availability of large quantities of methanol, producing its various derivatives domestically, and using methanol as fuel—will help stabilize the Indian economy and industrial sector. A shift toward a methanol economy is not merely an option but a necessity for India.
