India is looking to increase its supply of electronics and automobiles to Russia, aiming to strengthen the economic partnership between the two nations. This move comes as Western sanctions have significantly impacted Russia's access to various goods, creating a gap in the market that India is well-positioned to fill.

Since 2022, following heightened geopolitical tensions, many Western companies have withdrawn from the Russian market, leading Russian firms to seek alternative suppliers, particularly from India. Indian companies have capitalized on this opportunity, increasing their presence in sectors such as machinery and electronics. This shift is facilitated by new trade agreements and a smoother settlement system between the two countries, with nearly 90% of transactions being completed within hours.

India has become a vital source for Russia's high-tech component needs, filling the void left by Western businesses. Russian companies are increasingly relying on Indian suppliers for essential components, including electronic equipment, automotive parts, and aircraft parts. The Russian Ministry of Industry and Trade has actively partnered with Indian companies to procure goods previously sourced from the United States and Europe, including electronic modules, communication systems, and engine parts crucial for both military and civilian industries.

The increase in trade has also been supported by Russia's accumulation of Indian Rupees through its oil trade with India. Russia has been utilizing its surplus of Indian rupees, estimated at approximately INR8.5 trillion ($102 billion), to purchase goods that are no longer accessible from the West due to export restrictions.

Several factors contribute to this growing trade relationship. Russia's increasing isolation has forced it to seek alternative suppliers in friendly markets. India, maintaining a neutral stance on the Ukraine conflict, has chosen to deepen its economic ties with Russia rather than openly supporting Western sanctions. This has allowed Indian enterprises to expand their presence in key sectors.

Specifically, Indian companies like Tata Motors, Mahindra & Mahindra, Maruti Suzuki, and Ashok Leyland have significantly increased their export volumes to Russia. Tata Motors has begun supplying commercial vehicles, buses, and heavy-duty trucks adapted for Russia's climate, while Maruti Suzuki is capitalizing on the demand for compact, fuel-efficient vehicles in urban areas. India has also increased exports of auto parts and components, including engines, transmissions, electrical systems, and rubber parts.

Moreover, Indian medical device manufacturers are exploring opportunities to expand their market share in Russia. The Federation of Indian Export Organisations has indicated the potential to triple exports of medical devices to Russia over the next five years, tapping into sectors currently underserved due to Western sanctions.

However, some Indian exporters remain cautious due to the potential for sanctions and the reluctance of banks to process transactions. Despite these challenges, official data from the financial year 2023-24 shows that India's exports to Russia increased by over 35% to $4.3 billion, even as India's overall goods exports declined by more than 3%. Nearly half of the $1.2 billion increase in exports to Russia was attributed to machines and machine parts, including electronics.

Looking ahead, the Indo-Russian automotive partnership is expected to deepen further. Predictions for the near future include a 50% year-on-year increase in Indian auto exports to Russia, the establishment of more R&D centers in Russia by Indian firms, and increased collaboration in electric vehicle (EV) infrastructure and alternative fuels like CNG and hydrogen. Indian companies like Ola Electric and Hero MotoCorp have begun exploring opportunities in Russia for electric two-wheelers and battery swapping technologies.

Furthermore, Russia has expressed its readiness to import more Indian goods affected by US tariffs, aiming to bolster bilateral trade. Despite US pressure, Russia defends India's crude oil procurement, emphasizing their strategic partnership and commitment to resolving challenges.