Sectors like automobile parts and tourism infrastructure remain unexploited despite all-time high bilateral trade
Officials acknowledged during an event held in Moscow on Tuesday the significant increase in bilateral transactions between Russia and India in recent months but noted that trade diversification has yet to materialize.
Russia remains a prominent supplier of hydrocarbons, accounting for over a third of India’s imports, as well as mineral fertilizers, diamonds, and agricultural products.
However, there are various untapped segments for both Russian and Indian exporters, according to Russian Ambassador Denis Alipov, who addressed the 14th Indian-Russian Business Dialogue via video link.
“According to Indian government data, the trade turnover between Russia and India reached $54.7 billion in the first ten months of 2023. Moscow has become one of New Delhi’s top four major trading partners,” Alipov noted.
Citing commerce ministry data, PTI news agency reported that Russia has become India’s second-largest import source during the first seven months of this fiscal year. Imports from Russia increased by 64% to $36 billion in the April-October period, primarily due to higher shipments of crude oil and fertilizer. During the same period last year, imports stood at $22 billion.
Ambassador Alipov suggested that Indian companies explore opportunities in industries such as automotive components, shipbuilding, electronics, consumer retail, and tourism infrastructure. He noted that the Russian market offers favorable prospects in sectors where India has traditionally been a significant player, including pharmaceuticals and IT.
“India can and should use the opportunity to replace those items that Russia used to import from Europe to deal with the trade imbalance, which today stands at over $40 billion. Diversification of trade will help expedite finalizing the talks on a free trade agreement,” he emphasized.
Alipov further underscored the need to enhance mechanisms for mutual settlements and transition to settlements in national currencies, highlighting ongoing dialogues between regulatory bodies in the banking and financial sectors “at a systematic level.”
Despite challenges related to Western sanctions against Russia, the Indian government remains optimistic about expanding cooperation.
“I remain optimistic that bilateral trade will grow by fostering deeper economic ties. We can unlock the potential of further growth, and the key role here is played by business leaders from both sides as well as small and medium enterprises,” said Red Prakash Singh, first secretary and head of the Economic and Commercial Department of the Indian Embassy in Russia. He emphasized that people from both countries should travel more to witness the richness of Russia and India “with their own eyes.”
Sergey Cheremin, the head of Moscow’s Department of Foreign Economic and International Relations, echoed optimism about expanding cooperation with India. He announced Russia’s participation in India’s major trade events next month, including the Vibrant Gujarat Global Summit in Gandhinagar and the Smart Cities India Expo in New Delhi.
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