Amidst ongoing geopolitical tensions between Russia and the West, the world’s largest country has strategically expanded its economic ties with Asia, including India.
Recent data from Indian customs reveals a significant surge in trade between Russia and India, reaching $54.7 billion from January to October 2023, doubling the figure from the same period the previous year.
Over the ten months of 2023, Russia exported goods valued at $51.4 billion to India, while India supplied Russia with products amounting to $3.3 billion. This surge has solidified Russia as India’s fourth-largest trading partner and second-most crucial supplier, following the United States. India’s trade with the United States decreased by nine percent to $99.9 billion during the same period.
In 2022, Russia entered the list of India’s top five trading partners for the first time, with bilateral turnover reaching $38.4 billion, primarily driven by energy trade. The enhanced trade and economic cooperation between India and Russia align with the joint goal of both nations to increase bilateral investment and trade.
To facilitate this growth, several institutionalized mechanisms have been established, including the Russia-India Inter-Governmental Commission on Trade, Economic, Scientific, Technological, and Cultural Cooperation. Additionally, a permanent mechanism, initiated by Russia’s Ministry of Economic Development and India’s Ministry of Commerce and Industry, aims to eliminate trade, economic, and investment barriers.
In efforts to strengthen economic cooperation further, discussions are underway between India and Russia to explore the “rupee-rouble transfer” route for mutual settlement of payments, aiming to reduce costs, time, and risks associated with payments.
Discussions over the rupee-rouble route began as relations between Russia and the US deteriorated following the crisis in Ukraine in 2014, worsening in 2022 when Russia launched what it termed a “special military operation” in Ukraine. Consequently, Russia’s economy has operated under international sanctions for the last nine years. Since then, Russia has adopted various measures to reduce its dependence on the US dollar.
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