India seeks to reduce trade deficit with Russia in mutual efforts to push trade ties

New Delhi – India and Russia are looking at ways to deepen trade ties, with Moscow seeing the South Asian country as an alternative market for products facing Western sanctions and New Delhi running a widening trade deficit I would like to reduce

India’s imports from Russia increase fivefold Between April 2022 and February 2023, imports increased to $41.56 billion (S$55.6 billion) compared to the same period last year, mainly due to oil imports, while exports to the country fell by 30%. billion dollars.

Russia, unable to sell oil to the West due to sanctions over the war in Ukraine, sells oil to India and China at discounted prices.

To boost trade, a delegation of 50 Indian business people from agriculture and food processing sector visited Russia for four days from 24th April to look for opportunities in Russia.

Dr Ajay Sahay, Executive Director and Chief Executive Officer, Federation of Exporting Organizations of India, said: The delegation spent four days in Moscow and St. Petersburg.

“The huge trade deficit is a concern, but it is also an opportunity to boost exports dramatically,” said Dr. Sahay. “We need to diversify our exports to cars and auto parts, electronics, medical devices, solar cells, textiles, food, agriculture, etc.,” he said.

Despite deepening ties with the United States and Western countries, India continues to maintain close ties with Russia.

The two countries share a deep defense relationship, with 60% of India’s weapons coming from Russia and India’s need to balance the war against Ukraine.

At the United Nations, India abstained from voting against Russia on many resolutions, but called on Russia to seek a peaceful resolution of its differences and an end to the war in Ukraine.

Still, challenges remain in driving trade amid connectivity issues between the two countries, foreign policy analysts say.

The two sides are in talks to open a maritime corridor between the southern port city of Chennai and Russia’s Pacific port city of Vladivostok.

The route, which has been under construction since 2019, will reduce transit time for cargo by half to 20 days compared to the current route to Russia’s Far East via Europe.

India is also considering transporting goods through the International North-South Transport Corridor, a 7,200km network of rail, highway and sea routes linking Russia and Iran to India.