2023 marks a year of unprecedented economic collaboration between Russia and India, unfolding against a backdrop of geopolitical shifts. Data from Indian customs reveals a remarkable increase in trade volumes between these two nations, reaching $54.7 billion from January to October. This surge, doubling the figure from the previous year, positions Russia as India’s fourth-largest trading partner and its second-most essential supplier, following the United States.
The trade balance is notably skewed in Russia’s favor, with exports to India valued at $51.4 billion, contrasted by India’s exports to Russia at $3.3 billion. Concurrently, India’s trade with the United States witnessed a decrease to $99.9 billion, a 9% drop.
This growing economic partnership follows Russia’s entry into India’s top five trading partners in 2022, with bilateral turnover then reaching $38.4 billion, largely fueled by energy trade. This trajectory aligns with the mutual goal of both nations to expand bilateral investment and trade.
Several mechanisms support this growth, including the Russia-India Inter-Governmental Commission on Trade, Economic, Scientific, Technological, and Cultural Cooperation. Another significant initiative, led by Russia’s Ministry of Economic Development and India’s Ministry of Commerce and Industry, focuses on removing trade, economic, and investment barriers.
A pivotal development in this partnership is the exploration of the ‘rupee-rouble transfer’ route for mutual payment settlements, aimed at minimizing costs, time, and risks. This initiative stems from the need for alternatives in light of strained Russia-US relations since the 2014 Ukraine crisis and the intensification of tensions in 2022.
Facing global sanctions for nearly a decade, Russia has been actively seeking ways to lower its reliance on the US dollar in world trade. The Russia-India economic bond in 2023 symbolizes a significant shift in global trade patterns, emphasizing the dynamic nature of international relations and the evolving landscape of 21st-century global alliances.
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