Oil fuels India-Russia trade to almost 12x in a decade even as defence deals decline

Russia India trade ties have deepened

India and Russia have become increasingly intertwined in trade over the past decade, even as the decades-old defence partnership has seen a relative decline, according to a Moneycontrol analysis.

While Russia continues to account for a third of India’s defence imports - down from over 50 percent two decades ago - its share in India’s overall trade has grown substantially. Overall trade between the two countries has surged nearly twelve-fold between 2015 and 2024, rising to $72 billion in 2024 from $6.1 billion in 2015. This figure far exceeds the $30 billion target both nations had set in 2015.

The expansion in trade has been driven largely by a sharp rise in imports, particularly crude oil.

Between 2015 and 2024, India’s exports to Russia grew three-fold to $4.8 billion, while imports jumped fifteen-fold to $67.2 billion. A large part of this surge can be attributed to India’s energy purchase, with oil import alone soaring nearly 500 times to reach $55 billion in 2024. Oil now accounts for 83 percent of India’s total import from Russia, up from just 2.5 percent in 2015. By contrast, non-oil import rose by a more modest 2.6 times during the same period.

As bilateral trade expanded, its composition too has evolved. Capital goods now make up a third of India’s exports to Russia - double their 17.5 percent share in 2015 - while the proportion of consumer goods, agricultural products, and raw materials has declined. Conversely, India’s imports of capital goods from Russia have dropped significantly, from 2.3 percent of total imports in 2015 to just 0.3 percent in 2024.

Economic cooperation between the two countries has extended beyond trade. Russian investment in India has grown by 30 percent since FY15. Foreign Direct Investment from Russia increased to $1.3 billion in 2024 compared with just $1 billion a decade ago. However, Russia’s ranking as a source of FDI has fallen, and it is now India’s 30th-largest FDI partner, down from 19th in 2015.

As Russian President Vladimir Putin prepares for an upcoming visit to India, Moscow has proposed a renewed push to deepen defence cooperation.