A Snapshot Of India-Russia Trade Relations In Fiscal 2024

India and Russia have charted an ambitious path to elevate their bilateral trade by 2030, as discussed in the 22nd annual bilateral summit in Moscow on Tuesday. The discussion was propelled by significant trade flows in the year ended March that underscored both countries' economic interdependence.

The nations aim to boost their bilateral trade to $100 billion by 2030, as per a joint statement issued following the summit. The meeting featured discussions between Prime Minister Narendra Modi and Russian President Vladimir Putin on India and Russia's trade relations, among other significant topics.

Trade between India and Russia was predominantly characterised by Indian imports from Russia, which constituted nearly 94% of the bilateral trade in FY24. The principal import commodities were crude oil, accounting for 76% of Russia's exports to India, with other petroleum products and fertilisers also being significant. Conversely, India's exports to Russia were mainly pharmaceuticals, along with iron and steel.

Here is a snapshot of bilateral trade between India and Russia, with the most traded principal commodities:

India's imports from Russia stood at $61.43 billion during the fiscal ended March 2024, a distant second to Chinese imports. Overall imports from around the world during FY24 stood at $675.43 billion.

The imports were predominantly driven by commodities including:

Crude And Other Petroleum Products: Leading the imports is crude oil, accounting for a substantial $46.5 billion, or 76% of total imports.

Flows on ships signalling destinations in India averaged about 1.75 million barrels a day, down from the revised figure of 1.78 million for the period to June 30. China is Asia's second-largest market for Russian crude, averaging 9,00,000 barrels a day.

Crude imports drastically rose after fiscal 2022, post the full-scale Russian invasion of Ukraine and the subsequent fall in crude prices. India's import of crude in fiscal 2022 had only been 25% of total imports at $2 billion, which rose to 67% at $31 billion in fiscal 2023.

Import of other petroleum products stood at $4.2 billion, which formed a distant second largest import.

Coal, Coke, And Briquettes: Significant imports worth $3.8 billion underscore India's need for these resources to support its energy and industrial sectors.

Fertilisers: Imports of manufactured fertilisers amounted to $2.1 billion, reflecting India's agricultural requirements. The two countries agreed to continue cooperation on the sustainable supply of fertilisers to India, in the recent summit, and emphasised company-to-company long-term contracts within the framework of the Joint India-Russia Committee on Fertilizers, as per their joint statement.

Additional significant imports included vegetable oils, precious stones, project goods, and iron and steel products, reflecting the diversified nature of India's procurement from Russia.

India's exports to Russia totalled approximately $4.26 billion in FY24, against the country's overall exports of $437.11 billion during the period. Here are the drivers for the country's exports.

Pharmaceuticals: India exported drug formulations and biologicals worth $376 million, highlighting its strength in the pharmaceutical sector.

Metals And Minerals: Iron and steel exports amounted to $282 million, indicating India's capacity in metallurgical industries.

Telecommunications Equipment: Valued at $179 million, it demonstrated India's expertise in providing telecommunications solutions.

Marine Products, Ceramics, And Others: Exports in these categories, include processed minerals, marine products, ceramics, and bulk drugs.

The current trade imbalance, where imports from Russia significantly outweigh exports, has prompted both nations to explore avenues for enhancing Indian exports.

To achieve balanced and sustainable bilateral trade, the leaders stressed the need to strengthen industrial cooperation, forge new technological and investment partnerships especially in advanced high-technology areas and finding new avenues and forms of cooperation.

Initiatives discussed include tackling non-tariff barriers, exploring regional free trade agreements, and promoting bilateral trade settlements in national currencies.

New avenues of trade including communication technologies and nuclear energy were a significant discussion in the summit for enhancing bilateral trade for future fiscals.