US wants India to join coalition on Russia oil price cap

The US on Friday pressed India to join a coalition seeking to impose a price cap on Russian oil aimed at squeezing revenue streams for Moscow and softening the global energy prices.

US Deputy Secretary of Treasury Wally Adeyemo, who is on a three-day visit to India, discussed with policy makers about economic relations between the two nations as well as measures to limit earning of Russia post its invasion of Ukraine.

India snapped up discounted Russian oil that was shunned by buyers of Europe and other places post Russia's invasion of Ukraine. India has been guarded in its criticism of Moscow.

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With oil prices surging past $100/barrel mark, the US along with other G7 nations is looking at imposing some sort of price cap on Russian oil.

Adeyemo said energy and foodgrain trade by Russia has been kept out of sanctions and nations like India were free to enter into deals using any currency, including local currency.

The war has disrupted the global supply chain which has resulted in rising prices of crude oil and some food products.

"Indian policy makers are interested in learning more about joining the global price cap coalition to keep Russian fuel prices in check as it is aligned with India's objective of lowering energy prices fro consumer," Adeyemo said during an interaction with media here.

"We think that objective is aligned with our objective, which is to reduce Russia's revenue. So we're providing them with information. We're going to continue the conversation with them," he added.

The G7 countries are inclined towards having a price ceiling on Russian oil.

On the other hand, Russia is discussing cheap long-term oil deals with Asian buyers in an attempt to counter the G7 bid to cap export prices.

Adeyemo said there is no decision on the final price but it should take into account that the oil production does not become unviable for Russia.

However, it would reduce revenues earned from export of oil by Moscow.

"It is in the best interest of our people to get energy but also to deny Russia revenues that they can use to prop up their economy and the further the war in Ukraine. Our goal ultimately is to try and build out a coalition that is going to join us in implementing the price cap," he said.

Earlier in the day, Adeyemo met Finance Minister Nirmala Sitharaman and among other topics, they discussed about Indo-Pacific Economic Framework and India's G20 Presidency.

India will hold the Presidency of the G20 from December 1, 2022 to November 30, 2023. India will host the G20 summit next year.

G20 is the premier forum for international economic cooperation that plays an important role in global economic governance.

"During my conversation with the Finance Minister, we did talk about the Indo Pacific Economic Framework that the President Joe Biden and Prime Minister Modi have agreed to," Adeyemo said.

There were also discussions about supply chains and climate change and how does the US and India can do more to build supply chain resiliency, he said.

With regard to clean technology, Adeyemo said both the US and India have scope for technology transfer and collaboration.

Stressing that America sees India as one of the premier partners, he said that US financial firms are looking at India increasingly as a investment destination.