India and Russia aim for a $100 billion annual bilateral trade by 2030, with significant growth in existing trade volume. They plan to address trade imbalances, enhance cooperation in energy and pharmaceuticals, and diversify trade sectors. Both countries are negotiating a Free Trade Agreement, emphasizing the importance of economic ties alongside traditional partnerships. The expanding economic collaboration reflects a shared commitment to a multipolar world and strategic alliance.
India and Russia are marching towards a shared economic milestone with an ambitious target of achieving a USD 100 billion annual bilateral trade by 2030. External Affairs Minister S. Jaishankar expressed confidence that this objective would be realized well ahead of schedule, emphasizing the increasing significance of their partnership on the global stage.
Despite facing challenges related to logistics and payments, the growth trajectory of trade between India and Russia has been remarkable. Jaishankar acknowledged the existing constraints but remained optimistic, stating that with persistent efforts, the USD 100 billion target could be achieved sooner rather than later.
At the 25th session of the India-Russia Intergovernmental Commission on Trade, Economic, Scientific, Technical, and Cultural Cooperation (IRIGC-TEC), Jaishankar emphasized the complementary nature of the two economies. He highlighted the trust and confidence built over decades that have fueled the steady growth of bilateral trade, which currently stands at approximately USD 66 billion. Jaishankar remarked, “Our economies not only complement each other in various aspects but also benefit from the long-established trust and confidence.”
While celebrating the substantial trade volume, Jaishankar pointed out the need for a more equitable trade balance, necessitating the resolution of current constraints and the facilitation of smoother trade processes. Both countries are dedicated to intensifying their efforts in this regard, including advancing negotiations on a Free Trade Agreement (FTA) between India and the Eurasian Economic Union (EEU). This FTA is expected to play a pivotal role in enhancing trade relations by simplifying procedures and eliminating barriers.
An essential area of cooperation between the two nations lies in energy, with Russia emerging as a major supplier of crude oil, coal, and fertilizers to India. Jaishankar highlighted the increasing importance of Russia's uranium supply for India's nuclear energy sector. Concurrently, India's pharmaceutical industry has positioned itself as a reliable source for Russia, providing affordable medicines.
Exploring potential collaborations in emerging sectors, Jaishankar mentioned the mobility of talent and skills tailored for the Russian market, emphasizing the significance of human resource exchange in fortifying economic bonds. Connectivity initiatives like the International North-South Transport Corridor, the Chennai-Vladivostok Corridor, and the Northern Sea Route play crucial roles in facilitating trade and logistics between the two countries.
The deepening economic cooperation between India and Russia extends beyond energy and pharmaceuticals, with the diversification of trade evident in the export of food products such as sunflower oil and soybean oil from Russia to India, broadening the scope of bilateral exchanges. Jaishankar affirmed India's commitment to streamlining business operations, fostering trade growth across various sectors.
Denis Manturov, Russia's First Deputy Prime Minister, who led the Russian delegation at the IRIGC-TEC session, echoed Jaishankar's sentiments regarding the rapid expansion of bilateral trade. He highlighted a fivefold increase in trade turnover over the last five years, noting that India now ranks as Russia's second-largest foreign economic partner. Trade dynamics have remained positive in 2024, with turnover increasing by 9% in the first eight months compared to 2023.
Manturov emphasized the role of trade diversification in this growth, noting that besides energy sources and fertilizers, the two countries are engaging in a broader range of products, including industrial equipment, components, and pharmaceuticals. Broadening the trade basket is a vital aspect of their bilateral relationship, with both nations committed to further expansion.
Addressing the bilateral trade imbalance, Manturov reiterated Russia's commitment to a comprehensive cooperation roadmap until 2030 to rectify this issue. He highlighted the significance of the Free Trade Agreement between the Eurasian Economic Union (EEU) and India, along with bilateral agreements on services and investments, expected to cater to the needs of both business communities and facilitate trade expansion.
Jaishankar's remarks underlined the broader impact of India-Russia relations in a rapidly evolving global landscape. He emphasized that their relationship extends beyond their borders, resonating in an increasingly multipolar world order. "As two major nations in an increasingly multipolar world, a more substantive relationship between us has a larger resonance," Jaishankar stated, shedding light on the global significance of their partnership.
The deepening economic ties between India and Russia align with broader geopolitical objectives, reflecting their shared commitment to a multipolar world and a steady partnership spanning 75 years. While traditionally focused on defense, nuclear cooperation, and space exploration, the current emphasis on economic ties signals the growing importance of trade and investment as cornerstones of their strategic alliance.
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