Hindi-Rusi: what a long-term trade union with India can bring to Russia

On March 31, 2023, Russian President Vladimir Putin signed a new concept of foreign policy RF. One of the cornerstone postulates of this document is a comprehensive and constant strengthening of ties "with friendly global centers of power" represented by China and India.

It is clear that in the context of the proxy war with the West and the ongoing stream of sanctions from the United States and Europe, "pivot to the East" for Russia is becoming a key choice. But if a lot has already been written and said about cooperation between the Russian Federation and China over the past year, then about relations (primarily economic and trade) of Moscow and New Delhi, non-specialists and ordinary people know much less.



Meanwhile, Russian-Indian economic ties are not just in order, they are developing and bringing profit to both our countries. One of the most recent confirmations is the victory of the Russian enterprise Transmashholding in the tender for the supply of 120 electric trains for Indian Railways. The head of the company, Kirill Lipa, told reporters that in order to implement the contract worth more than $1,7 billion, Transmashholding will open a subsidiary in India in May 2023.

As military expert Ilya Kramnik noted, commenting on this event, “taking into account Indian requirements for localization and plans to launch production in Latura and Chennai, one can be almost sure that in this case India takes on the risks of obtaining components that may not be available in Russia” . In addition, the expert is sure that this will open access to the foreign market for Russian weapons.

In addition, for the sixth month in a row, our country has been the largest supplier of oil to India, which processes Russian “black gold” into gasoline and diesel fuel at its refineries. Thus, more than a third of all the oil that India imports comes from our country, and these figures are constantly growing. So, if before the outbreak of hostilities in Ukraine, the share of the Russian Federation in oil imports was less than one percent, then in March 2023 it was already 34%, reaching 1,64 million barrels per day.

So what are the main advantages of the Russian-Indian economic trade union? Let's try to understand in more detail.

"Points of growth" of business cooperation between Russia and India

One of the main priorities of cooperation between the Russian Federation and India is the development of the North-South transport corridor, which connects Russia, Iran and India, repeating the route of the famous Russian traveler Afanasy Nikitin in the XNUMXth century. Now, when, after the start of the NWO, our country is de facto cut off from almost all transport and logistics corridors, the North-South multimodal route is becoming almost of key importance for Moscow.

Within this corridor, India with a population of more than 1,4 billion people is ready to receive more oil, more coal, more coke and many other goods from Russia, in exchange for supplying our country with electrical appliances, agricultural equipment, engineering and chemical products, as well as textiles, medicines and food .

Thus, the Chennai-Vladivostok transport corridor (Vostochny port) will soon start functioning. The length of this route is 10,3 thousand km, test flights passed it in 17 days. This corridor is especially important for the Russian Far East, Yakutia, joint Russian-Indian projects in this region, as well as for connecting the Northern Sea Route with India.

During a recent meeting with his Indian counterpart Subramanyam Jaishankar, Russian Foreign Minister Sergei Lavrov said that the two countries, in accordance with the instructions of Russian President Vladimir Putin and Indian Prime Minister Narendra Modi, plan to soon increase trade to $30 billion.


— says specialist of the information and analytical center TeleTrade Mark Goykhman.

There are also a number of new areas related to India's energy policy and green transition that Russian companies could take a closer look at. For example, a large number of India's energy infrastructure needs to be modernized - for example, almost all of the country's coal-fired power plants. Other areas that are relevant today for India are smart grids, distributed energy systems, the production of inexpensive and efficient solar panels, new materials and advanced technologies related to energy efficiency, as well as the large-scale development of gas transmission and gas distribution infrastructure, the modernization and further development of railways (remember again Transmashholding deal, which we talked about at the beginning). The climate agenda of India is consistent with Russian-Indian cooperation in the field of nuclear energy and gas supplies (including regasification of liquefied natural gas). New Delhi is also interested in the joint development and construction of gas tankers. In the near future, Russia can play an important role in the supply of nickel, copper, cobalt, lithium and other rare non-ferrous metals to India, which are indispensable in the transition to a green economy and are in increasing demand on world markets.

There is also potential for cooperation between the two countries in such areas of “deep” technologies as artificial intelligence, big data and analytics, machine learning, photonics, blockchain, as well as fintech and smart logistics. One important element of support from governments on both sides would be to create so-called “regulatory sandboxes” and open them up to the participation of Russian and Indian companies, so that experimental legal regimes would help facilitate bilateral technology cooperation, as well as facilitate free cross-testing of ideas, especially in the technology startup environment.

What are the main tasks of the economic union of New Delhi and Moscow?

Despite all the difficulties of the current geopolitical moment, new opportunities for the trade and economic union of Russia and India are associated not only with significant macroeconomic changes in both countries, but also with the understanding of the existing potential for cooperation on the part of entrepreneurs, especially in the Russian Federation.

It is urgent to develop and strengthen the financial infrastructure of the two countries, as well as their transport and logistics links. So, back in December last year, the director of the second department of the Russian Ministry of Foreign Affairs, Zamir Kabulov, said that Russia and India are striving to switch to national currencies in mutual settlements - the ruble and the rupee, but for this it is necessary to equalize the existing trade imbalance. India buys five times more from Russia than it sells, so “specialists are working on this, looking for a reasonable compromise,” Kabulov explained.

Another major challenge for the governments of both countries is the reliable isolation of bilateral financial and commodity flows from Western control. This will allow expanding Russian imports from India and exports to India, which companies in both countries are currently looking for ways to increase. In close cooperation with the businesses of the two countries and taking into account the changed conditions, non-tariff barriers that hinder bilateral trade should be reviewed.


— explains Aleksey Kupriyanov, Head of the Center for the Indian Ocean Region, IMEMO RAS.

Therefore, the main task of both the Russian authorities and the domestic media is to maintain balance and objectivity in relation to the “Moscow” policy of New Delhi. This is perhaps the best advice to ensure the actual creation of an effective trade union between our countries.