Prioritizing India as Russia’s Trade and Economic Partner

Abstract

The article examines the prerequisites, areas and prospects for expanding and deepening Russian-Indian trade and economic cooperation under drastically changed conditions of international trade for Russia. The growing role of India in international trade, as a consumer and importer of fuels, in the global nuclear power industry, as a generator of megaprojects in the fields of science and technology, manufacturing, infrastructure, and smart cities is shown. Due to the fast growth rates, rapid increase in population and per capita income India will become one of the three largest economies and one of the biggest global markets in the coming decades. The risks to India’s sustainable growth are identified, as well as the reasons for the still low level of bilateral trade, which is substantially below potential. Escalation of anti-Russian sanctions in 2022 has led to a large-scale reorientation of trade flows from the markets of unfriendly countries to neutral countries, including redirection of significant volumes of fuels, fertilizers, sunflower oil, and a number of other goods to the Indian market. A multifold increase in exports to India has made Russia one of its leading exporters, but the resulting higher trade imbalances make it difficult for India to continue financing its imports and conducting bilateral trade settlements. Development and deepening of bilateral cooperation will be facilitated by the expansion of the range of supplied goods; implementation of joint investment projects in areas of mutual interests, including localization of Russian production in the Indian market; cooperation in responding to major challenges for India (digitization, urbanization, space exploration, clean energy, water and environmental problems); joint work on the arrangement of new transport and logistics routes, creation of insurance, payment and settlement mechanisms that are resistant to unfriendly actions. Amid increasing geo-economic fragmentation in the world, the Russian-Indian alliance could ensure that both countries maintain their significance as leading regional and global players.