Trade and economic cooperation

The expansion of Russia-India trade, economic and investment cooperation between remains one of the key priorities in the context of further promotion of the special and privileged strategic partnership.

The main mechanism for expanding Russian-Indian ties in this area is the Intergovernmental Russian-Indian Commission on Trade, Economic, Scientific, Technical and Cultural Cooperation, the 24th meeting of which was held on April 18, 2023 under the chairmanship of the Deputy Prime Minister of the Russian Federation – Minister of Industry and trade of the Russian Federation Denis Manturov and the Minister of External Affairs of India Dr S.Jaishankar. There is constant substantive interaction within the framework of specialized working groups on the implementation of bilateral industry projects, as well as the search for new promising areas of cooperation.

Among the priority tasks for the further expansion of trade, economic and investment cooperation there remain the issues of developing alternative logistics routes, new ways of banking with an emphasis on expanding the use of national currencies in mutual settlements, interfacing national payment systems, insurance, diversification and achieving a balance in bilateral trade, primarily by increasing the supply of popular products from India.

According to the Ministry of Commerce and Industry of India, at the end of 2023, bilateral trade turnover amounted to USD 65 billion, increasing 1.8 times compared to 2022. Russian exports reached USD 60.9 billion (+79.1%), supplies of Indian goods increased to USD 4.1 billion (+41.4%). Russia is India's fourth largest trading partner (after the USA, China and the UAE), while in terms of volume of imported products it ranks the second (after China).

The structure of Russian exports to India is dominated by mineral fuels, chemical products, precious stones and metals, food products. The basis of Indian exports are chemical products and medicines, machinery, equipment, electronics, and agricultural goods.

According to expert estimates, accumulated Indian investments in Russia and Russian investments in India amount to about USD 15 billion on each side. At the summit in New Delhi in December 2021, the leaders of the two countries confirmed the goal of increasing their volume to USD 50 billion.

To stimulate mutual trade, work continues on liberalization of the customs regime, including an agreement on mutual recognition of authorized economic operator institutions. Preparations are underway for the conclusion of an agreement on a free trade zone between the Eurasian Economic Union and India and an updated bilateral intergovernmental agreement on the protection of investments.

Energy sector remains the main direction of the Russian-Indian economic partnership. In the state of Tamil Nadu, Units 1 and 2 of the Kudankulam Nuclear Power Plant are successfully operating, supplying electricity to Indian consumers. The construction of the second (Units 3 and 4) and third stages (Units 5 and 6) of the NPP continues as planned. Negotiations are underway on the construction of a Russian-designed nuclear power plant with a VVER-1200 reactor unit at the new site.

Bilateral cooperation in the oil and gas sector is steadily developing. In 2017, a deal was closed to acquire 98% of the shares of the Indian oil company Essar Oil Ltd. (renamed as Nayara Energy Limited) by PJSC NK Rosneft and an international consortium of investors. Indian oil companies participate in such Russian projects as Imperial Energy, Vankorneft, Taas-Yuryakh and Sakhalin-1.

An important driver for the development of trade and economic relations is industrial partnership. Joint projects in the chemical industry, metallurgy, railway engineering, electronics industry, and mining industry, including within the framework of the “Make in India” program, are at an active stage of implementation. Russian and Indian IT companies interact in a wide range of areas, including telecommunications, cybersecurity, smart city technologies and artificial intelligence.

Russian-Indian interregional ties are actively developing, which contain significant potential for qualitative growth in the volume of mutual trade and investment. 

Russian and Indian organizations take an active part in exhibition and congress events of investment and economic orientation held in the two countries, such as the SPIEF, EEF, “Vibrant Gujarat”, etc.