India mulls boosting exports to Russia with focus on electronics, engineering goods

Russian President Putin with PM Modi

The Indian government is looking at ways to spur exports to Russia following a pledge between the two nations to increase bilateral trade to over $100 billion by 2030, during Prime Minister Narendra Modi's recent visit to Moscow.

"We are looking at a set of commodities such as engineering and electronic goods where there can be more exports to Russia as well as continue imports of oil from Moscow," Commerce Secretary Sunil Barthwal said on July 15.

Total trade between India and Russia was worth $65.69 billion in FY24, registering a growth of 33.1 percent on-year.

The efforts to increase Indian exports to Russia come at a time when India's widening trade gap with Moscow has become a cause for concern.

Though India's exports to Russia saw a significant growth of 35.4 percent on-year in FY24, higher than imports from Moscow at 32.9 percent, the gap between outbound and inbound shipments narrates a different story.

The trade gap between the two nations widened by 33.8 percent to $57.5 billion in FY24 over the previous fiscal.

This is primarily due to an increase in the purchase of Russian oil while New Delhi has little to offer in terms of exports that could match up to crude from Moscow in volumes as well as value terms.

After the outbreak of the war in Ukraine, India stepped up crude oil imports from Moscow since they were offering heavy discounts. As a result, Russia now occupies the top spot as India's energy supplier, leaving behind traditional providers like Iraq and Saudi Arabia.

Barthwal further said that India has requested Russia to make changes to some "non-tariff barriers" to boost Indian exports, which is expected to consequently help rupee-rouble trade that has failed to take off.

Another visit between the two countries to enhance bilateral trade is expected soon, Barthwal said.

In a joint statement following the 22nd Annual Bilateral Summit last week between Russian President Vladimir Putin and Modi in Moscow, both sides reiterated their commitment to bolstering the special and privileged strategic partnership. They aimed to intensify bilateral interaction by promoting trade and economic cooperation.

The two nations outlined nine key areas for closer cooperation, including nuclear energy and medicine.

Following this, Putin and Modi instructed the Russian-Indian Intergovernmental Commission on Trade, Economic, Scientific, Technical, and Cultural Cooperation to prioritise and evaluate progress in these identified areas at their upcoming meeting.