India and Russia economic relationship

India and Russia share a longstanding relationship in various spheres, including economic cooperation. Since the Soviet era, India and Russia have maintained cordial ties and have collaborated on various fields such as defence, space, science and technology, culture, and education. The economic cooperation between the two nations has also grown significantly over the years. In this blog, we will delve deeper into the economic relationship between India and Russia.

Trade Relations:

India and Russia have had a balanced trade relationship over the years. The bilateral trade between the two countries reached $9.4 billion in 2019. India’s major exports to Russia include pharmaceuticals, tea, coffee, machinery, and equipment, while Russia exports oil and gas, diamonds, and fertilisers. However, the bilateral trade between the two nations is much below its potential, and both nations are working towards increasing the trade volume.

Investments:

Russian companies have invested heavily in the Indian economy. For instance, in 2020, Rosneft, a Russian oil company, acquired a 49% stake in Essar Oil, an Indian oil and gas company, for $13 billion. Russian investments in the Indian economy span across various sectors such as energy, steel, infrastructure, fertilisers, and defence. Similarly, Indian companies have also invested in Russia, with ONGC Videsh, an Indian state-owned company, acquiring a stake in Rosneft’s Vankor oil field.

Defence and Security:

India and Russia have a strong defence and security partnership that dates back to the Soviet era. India is the largest importer of Russian arms, with 58% of its arms imports coming from Russia. Both nations have collaborated on various defence projects such as the BrahMos cruise missile, Fifth-generation Fighter Aircraft (FGFA), and the Sukhoi Su-30MKI aircraft. Russia is also a strategic partner for India in the United Nations Security Council and other international forums.

Challenges and Opportunities:

Despite the strong economic ties between India and Russia, there are some challenges that both nations face. Firstly, the bilateral trade volume between the two nations is much below its potential, and both nations are working towards increasing it. Secondly, the Western sanctions against Russia have affected the Indian economy’s ties with Russia, particularly in the energy sector.

However, there are also several opportunities for both nations. Firstly, India and Russia are members of BRICS, and they have collaborated on various initiatives such as the New Development Bank and the Contingent Reserve Arrangement. Secondly, India and Russia have launched the International North-South Transport Corridor project, which will improve trade and connectivity between India, Russia, and other countries. Lastly, both nations are exploring opportunities for collaboration in emerging sectors such as space, digital technologies, and artificial intelligence.

Conclusion:

The economic relationship between India and Russia has come a long way since the Soviet era. The two nations have maintained cordial ties, and their cooperation in various fields has grown over the years. However, there is still room for improvement, particularly in increasing the bilateral trade volume. The opportunities for collaboration between India and Russia are immense, and both nations need to work towards realising their potential for mutual benefit