India, Russia mull boosting trade by 50% by ’30

India is aiming to strengthen its economic ties with Russia, setting an ambitious target of $100 billion in bilateral trade by 2030. This ambitious goal is a 50 per cent increase from the current $66 billion trade volume.

Prime Minister Narendra Modi‘s recent visit to Russia and his discussions with President Vladimir Putin underscored the two nations’ commitment to expanding economic co-operation.

Modi emphasised the importance of diversifying trade between the two countries, focusing on increasing market access for Indian goods in agriculture and industry sectors, as stated by then-Indian Foreign Secretary Vinay Kwatra on July 9.

India aims to address the $57 billion trade deficit and establish a reliable payment mechanism for transactions, said Ajay Srivastava, co-founder of the New Delhi-based think tank Global Trade Research Initiative (GTRI),

In the last financial year, India exported $4.26 billion to Russia and imported $61.43 billion, mainly crude oil and petroleum products, totalling $65.69 billion. This marked a 33 per cent increase from the previous year’s $49.36 billion.

Srivastava highlighted the substantial rise in imports from Russia, leading to a notable trade deficit. The trade deficit surged from $2.8 billion before the conflict to $57.2 billion in the financial year ending in March 2022.

The GTRI report suggests four steps for India to reduce the trade deficit: boost exports to Russia, facilitate trade in local currencies, operationalise the International North-South Transport Corridor, and finalise a free trade agreement with Eurasian Economic Union nations.

India is looking at how it can tap greater export opportunities such as supplying goods that Russia can’t get from other countries due to the sanctions.

“We are also looking at the rupee-ruble trade. … It’s a twin strategy [that] we are working on,” Indian Commerce Secretary Sunil Barthwal told reporters on July 15.

Despite the challenges posed by geopolitical tensions, India and Russia are determined to strengthen their economic ties and explore new avenues for co-operation.

Attribution: Nikkei Asia