New Delhi Prepares for Putin's Visit: Aims for $100 Billion in Trade Amidst Geopolitical Crosscurrents
As Russian President Vladimir Putin prepares to visit India on December 4-5 for the 23rd India-Russia Annual Summit, both nations are setting ambitious goals to deepen their economic partnership, targeting $100 billion in bilateral trade by 2030. This visit, Putin's first since December 2021, occurs amidst a complex global landscape marked by geopolitical tensions and economic realignments, particularly concerning the ongoing conflict in Ukraine and its impact on international trade.
The summit agenda is extensive, encompassing discussions on energy, defense, trade, and investment, as well as grassroots engagement. A key focus will be addressing challenges that impede trade and economic cooperation between the two countries. Both countries aim to review the progress of cooperation, strengthen their "special and privileged strategic partnership," and exchange views on regional and global issues of mutual interest.
Trade and Economic Ties
Bilateral trade between India and Russia reached a record high of $68.7 billion in the fiscal year 2024-25, a nearly six-fold increase compared to pre-pandemic levels. While this growth is significant, a trade imbalance persists, with India's exports at $4.88 billion and imports from Russia at $63.84 billion. A major portion of India's imports consist of crude oil, petroleum products, fertilizers, and other raw materials. To address this imbalance, Russia is considering measures to provide Indian companies with greater access to its markets, aiming to boost Indian exports of machinery, telecom equipment, chemicals, food, and pharmaceuticals.
Both countries have set a target of $50 billion in bilateral investments by 2025. As of October 2023, Indian investments in Russia were estimated at $16 billion, while Russian investments in India totaled around $20 billion. Key sectors for Russian investment in India include oil and gas, petrochemicals, banking, railways, and steel.
India and the Russia-led Eurasian Economic Union (EAEU) are also set to begin formal negotiations for a Free Trade Agreement (FTA). The FTA aims to create new markets for Indian businesses, particularly micro, small, and medium enterprises (MSMEs), farmers, and fishermen.
Energy Cooperation
Energy has emerged as a cornerstone of the India-Russia partnership, with Russia becoming India's largest crude oil source since 2022. Despite sanctions and pressure from the United States, India has continued to import Russian oil, citing national interests and economic necessity. However, due to increased US pressure and new Western sanctions on Russian companies, India is expected to reduce its Russian oil imports by approximately 50% in December 2025. To compensate, India plans to increase investments in Russia's energy sector, including LNG agreements and coking coal purchases.
Defense and Strategic Partnership
Despite evolving geopolitical dynamics, defense cooperation remains a crucial aspect of the India-Russia relationship. A four-member delegation from the Russian Land Forces recently visited India to enhance bilateral defense cooperation. The Russian State Duma is also preparing to ratify the Reciprocal Exchange of Logistics Agreement (RELOS) with India, which would allow both countries' armed forces to access each other's bases, ports, and airfields for refueling, maintenance, and logistical support.
During the summit, discussions are expected regarding the potential purchase of the Su-57 fighter jets and the S-500 air defense system. India already operates over 200 Russian fighter jets and several S-400 batteries.
Navigating Global Tensions
President Putin's visit occurs at a time when India is navigating complex relationships with both Russia and the United States. While India has historically relied on Russia for arms and energy, it is also deepening ties with the U.S. and Europe. India's commitment to strategic autonomy is evident in its willingness to maintain its relationship with Russia while also engaging with other global powers. The summit is expected to yield new agreements and initiatives, some of which may be kept under wraps to avoid sanctions. Overall, Putin's visit underscores the resilience and adaptability of the India-Russia partnership amidst a changing world order.
