Building a Balanced Future: India–Russia Trade—At a Crossroads

Building a Balanced Future: India–Russia Trade—At a Crossroads

Introduction

During his recent visit to Moscow, India's External Affairs Minister S. Jaishankar sounded a clarion call: the trade imbalance between India and Russia demands urgent attention. As India leans heavily on Russian energy imports, the imbalance has worsened, prompting bold steps toward a more equitable partnership.

1. The Root of the Imbalance: Energy Imports

• Trade Deficit Skyrockets: India's imports of Russian oil have notably surged, pushing the trade deficit with Russia to approximately $58.9 billion, largely driven by energy imports. 

• Strategic Dependence: Even though the volume of trade has increased over the years, it's heavily skewed in Russia's favour—a growing concern that financial and diplomatic stakeholders cannot ignore. 

2. Jaishankar’s Agenda: Addressing the Imbalance

• A Call for Urgency: At the 26th India–Russia Intergovernmental Commission for Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC‑TEC), Jaishankar stressed that the imbalance must be tackled immediately. 

• Promoting Indian Exports: He advocated for boosting exports from India—especially in agriculture and pharmaceuticals—to mitigate the deficit.

3. Proposals to Level the Playing Field

To reduce disparity and foster balanced economic ties, a number of strategic measures have been suggested:

• Remove Non‑Tariff and Regulatory Barriers: Streamline trade by addressing obstacles in access, logistics, payments, and insurance. 

• Promote Settlement in National Currencies: Reduce dependency on foreign currencies by settling bilateral trade in rupees and rubles. 

• Expand Export Footprint: Capitalize on India’s strengths—especially in agri-products and pharmaceuticals—to enhance the value and range of exports to Russia. 

• Explore Joint Energy Ventures: As Russian FM Lavrov noted, both countries have mutual interests in deeper energy collaboration, including extraction projects in Russia's Far East and Arctic regions. 

• Launch FTA Talks with EAEU: India and the Russia-led Eurasian Economic Union (EAEU) have agreed to initiate Free Trade Agreement negotiations—an important step toward diversified trade beyond oil. 

4. Geopolitical Undercurrents

• US Tariffs and Trade Pressure: The U.S. has imposed a 50% tariff on Indian goods—largely in response to India's continued Russian oil imports—which has reinforced India's pivot toward stronger trade ties with Russia and its partners. 

• Russia’s Solidarity: In Moscow, Russian officials affirmed their intent to expand trade with India despite Western pressures. Their messaging emphasized the resilience and depth of the bilateral relationship. 

• Strategic Offset: These developments underscore how trade ties are evolving not just economically, but also as instruments of strategic diplomacy. 

5. What Lies Ahead?

The roadmap for more balanced India–Russia trade could include:

• Diversifying sectors of exchange by nurturing Indian exports across pharmaceuticals, agriculture, and tech.

• Fast-tracking FTA talks with the EAEU to reduce dependency on oil-centric trade.

• Encouraging joint ventures in energy and infrastructure to deepen economic integration.

• Institutionalizing rupee–rouble settlements to protect against global currency volatility.

• Setting the target trade volume goal of $100 billion by 2030—recognizing that current trends, if balanced, make it achievable. 

Conclusion

India and Russia stand at a pivotal moment. Their strengthened partnership—tested by geopolitical headwinds and trade imbalances—can evolve into a more harmonized and resilient economic alliance. As Jaishankar highlighted, pursuing fair, diverse, and strategic trade opportunities isn't just good economics—it’s the blueprint for a robust, future-ready partnership.