India and Russia are forging ahead with ambitious plans to significantly increase bilateral trade, targeting $100 billion by 2030. This initiative involves creating a framework to boost Indian exports to Russia, capitalizing on the complementary nature of both economies.
Currently, India's exports to Russia stand at approximately $1.7 billion, while Russia's imports in key sectors like engineering, pharmaceuticals, agriculture, and chemicals total $37.4 billion. This disparity highlights a substantial opportunity for Indian businesses to expand their presence in the Russian market and reduce India's $59 billion trade deficit with Russia.
To achieve the $100 billion target, India has identified roughly 300 high-potential export products. These products span critical sectors where India possesses a competitive advantage. Engineering goods represent a significant area for growth. India's current engineering exports to Russia are around $90 million, while Russia's import demand in this sector is $2.7 billion. Pharmaceuticals also offer considerable potential, with India supplying $546 million against Russia's $9.7 billion import demand, particularly for generics and active pharmaceutical ingredients (APIs). Similarly, in chemicals and plastics, Indian exports amount to $135 million, while Russia's demand reaches $2.06 billion. Agriculture and allied products present another strong avenue for growth, with India exporting $452 million of these items to Russia, while the global import demand for similar products in Russia stands at $3.9 billion.
Beyond these core sectors, textiles, leather, handicrafts, processed foods, and light engineering also hold considerable promise. Electronics and textiles currently capture less than 1 percent of the Russian market, but strong distribution networks could help Indian exporters scale significantly. India's labor-competitive manufacturing and cost advantages, combined with Russia's growing consumer demand and diversification away from China, make these sectors attractive for expansion.
The focus on increasing exports in these identified sectors is expected to play a crucial role in narrowing India's existing trade deficit with Russia. Russia currently supplies nearly 21% of India's total oil imports, solidifying its position as a critical energy partner. With Russia seeking to diversify its import sources away from China, Indian firms have a significant opportunity to increase exports through improved logistics, financing, and market access. Simplified and predictable mechanisms are being created for business. Discussions have also commenced on a Free Trade Agreement between India and the Eurasian Economic Union.
