India is optimistic about reaching a $100 billion trade volume with Russia well ahead of the 2030 target, despite the need to address ongoing challenges for a more balanced trade relationship, External Affairs Minister S. Jaishankar said on Tuesday.
Speaking at the Intergovernmental Commission on Trade, Economic, Scientific, Technical, and Cultural Cooperation (IGC-TEC) meeting, Jaishankar highlighted the “perceptible progress” made in resolving trade barriers, particularly those related to payments and logistics. However, he noted that more work remains to fully address these issues. Jaishankar was co-chairing the session alongside Denis Manturov, Russia’s First Deputy Prime Minister.
Jaishankar’s comments came on the heels of his earlier remarks at the India-Russia Business Forum in Mumbai, where he emphasized the need to correct the imbalance in bilateral trade. India’s trade deficit with Russia has ballooned to nearly $57 billion, largely due to substantial purchases of Russian crude oil since 2022. In July, the two countries set a target to increase trade to $100 billion by 2030, a goal that Jaishankar believes India will reach much earlier.”
While trade growth is impressive, the goal is to make it more balanced,” Jaishankar said. “This will require addressing existing constraints and facilitating smoother trade flows. Progress in negotiations on the India-Eurasian Economic Union Free Trade Agreement (FTA) will also be key.”
Jaishankar acknowledged that challenges persist, particularly those stemming from Western sanctions on Russia, which have complicated payment systems and logistics. Nevertheless, both sides have made tangible strides in mitigating these issues, with trade now up by 9% in the first eight months of 2024.
Manturov highlighted that two-way trade had increased more than five-fold over the past five years, with India now ranking as Russia’s second-largest trade partner. In addition to Russian oil imports, India exports a variety of goods including agricultural products, industrial equipment, pharmaceuticals, and components.
Both leaders agreed that expanding the trade basket and diversifying imports and exports are crucial to achieving a more balanced trade relationship. The signing of an FTA between India and the Eurasian Economic Union, along with bilateral agreements on services and investments, will play a central role in this process.”
The settlement of trade in local and alternative currencies is approaching 90%, and expanding banking ties between India and Russia is essential,” Manturov said. He also advocated for increasing direct flight connections between the two countries, noting that Russia’s Aeroflot currently operates only 12 weekly flights from Moscow and Ekaterinburg to New Delhi and Goa.
The IGC-TEC meeting saw both sides commit to expediting the programme for economic cooperation through 2030, with a focus on enhancing market access and achieving the $100 billion trade target. Discussions covered a wide range of sectors, including trade, investment, hydrocarbons, nuclear energy, connectivity, agriculture, IT, pharmaceuticals, healthcare, fertilisers, and education.
As India and Russia continue to strengthen their economic ties, both nations are determined to build on the trust and cooperation that have characterized their relationship for many years.
