Russia invaded Ukraine on 24 February 2022, coinciding with Pakistan’s former prime minister Imran Khan’s visit to Moscow. Consequently, in March, diplomats from 22 nations released a joint statement to Pakistan, calling on it to condemn Russia’s invasion by supporting a United Nations General Assembly (UNGA) resolution. However, Pakistan expressed a desire to not be dragged into any particular bloc.
The United Nations Security Council (UNSC), of which Pakistan is not a member, had already rejected a draft resolution the day after the invasion to end the Ukraine crisis. Unsurprisingly, Russia vetoed the resolution, and India was among the three members to abstain. India was thus also called upon by European envoys to take a stronger position on the invasion of Ukraine.
Later on 7 April 2022, India again abstained in the UNGA’s vote to suspend Russia from the Human Rights Council, though this resolution was adopted. India’s permanent representative to the UN, Mr Tirumurti, said that India was abstaining due to “substance and process” reasons, falling short of blaming Russia for the killings of civilians he deplored as “deeply disturbing.” Pakistan was also among the 58 members that abstained, but, unlike India, it did not participate in the debate.
Various commentators have already explained the responses of Pakistan and India through a geopolitical lens. According to Riaz Khokhar, analysts have suggested that the content of Imran Khan’s response to the invasion, resistance to the “with-us-or-against-us diktat,” had an appeal in Islamabad. But Khokhar concludes that this does not necessarily mean that Pakistan will favour autocratic regimes or anti-West policies, but that, in the wake of the withdrawal of the US from Afghanistan, Pakistan wants to align itself with other significant powers in the region, and there is evidence that Russia is the key to security and inter-connectivity in Eurasia.
In an analysis by Rahul Roy-Chaudhury and Emile Hokayem for the International Institute for Strategic Studies, they argue that it was not India’s abstention that was surprising. Rather, it was the expectation throughout the West that India “would join in the international condemnation of Russia” that they considered surprising, given India’s “strategic dependence on Russia, as well as its security priorities in the Indo-Pacific.” They explain that Russia not only accounts for 55% of its arms and spares procurement but that India has also been attempting to limit China’s influence in the region, such as through its improving relationship with the US.
One guaranteed impact of the invasion of Ukraine is that Pakistan and India will have to work around any sanctions that affect their trade relationships.
The economic impact of the invasion on Pakistan and India will be considerable. In terms of trade, both Pakistan and India receive more exports from Russia than Ukraine. The Observatory of Economic Complexity states that, in 2020, Russia exported $699M to Pakistan, with the top product being wheat. After the invasion of Ukraine, Pakistan was also the first country to sign a trade deal with Russia in March, in which Pakistan will import 2MT of wheat and natural gas.
Indian figures released by the Indian Embassy in Moscow stated that bilateral trade with Russia equalled $8.1B from April 2020 to March 2021, with Russian exports amounting to $5.48B. The same briefing stated that “economic cooperation between India and Russia is a key priority for the political leadership of both the countries,” as exemplified by the revised target for $30B of bilateral trade by 2025.
One guaranteed impact of the invasion of Ukraine is that Pakistan and India will have to work around any sanctions that affect their trade relationships. For example, it has been alleged that Russia and India will attempt to undertake back payments via a rupee-rouble mechanism to avoid the financial sanctions imposed by the West to pay for Russian imports.
Another potential impact is that Pakistan and India may have to choose between Russia and the West for economic purposes. Russia has increased its economic involvement in Pakistan over the years, as exemplified by signing an agreement in 2021 to construct a national gas pipeline in Pakistan worth $2.5B, which the former Pakistani government said was going ahead, even after the invasion. This is in contrast to the European Union (EU), which aims to cut its gas imports from Russia by two-thirds in one year.
However, the EU is Pakistan’s largest export destination, and it granted Pakistan the Generalised System of Preference + (GSP+) status in 2014, which permits the removal of tariffs on most EU tariff lines. This status is due to expire in 2023, and Pakistan will have to re-apply and commit to specific conventions to be granted the status. India, by contrast, has only been granted the standard GSP status, which means the “partial or full removal of customs duties on two-thirds of tariff lines.” India will also have to re-apply for this status in 2023.
Whether Pakistan’s and India’s responses will impact their applications is unclear. But, it does appear that the West will seek to incentivise at least India to pursue trade with them over Russia. According to a senior official, the EU has planned to launch talks with India with the goal of securing a new trade deal that reduces India’s reliance on Russia. After the visit of Ursula von der Leyen, the President of the European Commission, to India, they agreed to establish a joint Trade and Technology Council and to resume negotiations for a Free Trade Agreement between India and the EU. Similarly, the US deepened its defence ties, such as through “cyberspace cooperation” and joint military exercises, with India in April in an attempt to reduce its reliance on Russian arms.
Some organisations have already predicted that the invasion will negatively impact Pakistan and India economically. The World Bank stated in April that the war in Ukraine would cause economic growth across South Asia to be slower, an impact exacerbated by the fallout of COVID-19 and ongoing economic challenges. These persistent challenges are, for Pakistan, regionally high energy subsidies and, for India, a recovering labour market and “inflationary pressures.” The World Bank consequently revised its January projection from 7.6% growth in South Asia in 2022 to 6.6%, projected to decrease again to 6.3% in 2023.
It has also been questioned whether Pakistan will be able to secure the larger loan the previous government desired from The International Monetary Fund (IMF) due to its trade deal with Russia if the current government has the same intention. The IMF provides loans to member countries in order to “restore sustainable economic growth,” which appears to be increasingly vital for Pakistan in light of The World Bank’s projections. The IMF has made its support of Ukraine abundantly clear, saying that it is “doing everything it possibly can – as quickly as possible – to help Ukraine,” such as through emergency funding of $1.4B.
Decision-making within the IMF reflects the “relative positions of its member countries in the global economy.” Those countries that have strongly supported Ukraine, such as the US and the UK, have a greater share of IMF votes than Russia, Pakistan and India. Therefore, based on the stance of the IMF itself and the share of votes, the pressure might be exerted on Pakistan to take a tougher stance on Russia if it wants to secure the loan.
To conclude, despite the reaction by Western powers, Pakistan’s and India’s responses to the invasion of Ukraine are not necessarily surprising when looking at the situation through a geopolitical lens. But the invasion will undoubtedly have a significant impact on both countries, who will have to negotiate muddy waters to maintain their economic partnerships with Russia and the West simultaneously in the face of Western pressures and sanctions.