India-Russia business bhais? It could finally come to pass

As recently as eight years ago, trade between India and Russia was in single digit billion dollars. This when India’s trade with Washington (then helmed by an abrasive Trump in his first avatar) was 20 times that, and that with feather-ruffling neighbour China at a multiple of ten. Despite being old friends and strategic allies, it had appeared that the economic relations between the Baltic bear and the Himalayan tiger was a story unrealised, a tale that time forgot.

But last year, in an about turn in just a few years, trade between the two countries crossed 68.7 billion dollars, and both believe it is just the tip of the iceberg.

The stars (and stripes) seem to have inadvertently conspired to bring the two eastern heavyweights together for a common cause.

Hours before Russian supremo Vladimir Putin even landed at Palam, India-Russia love was in full bloom across the Indian capital. At the India-Russia forum meeting, commerce minister Piyush Goyal called Russia India’s ‘sukh dukh ka saathi’, meaning ‘a friend through times happy and sad’. Talks and strategies were being frenetically chalked out across New Delhi to sew up more trade deals and chart out a path of increased business cooperation.

Outwardly, it’s all about better economic relations and meeting potential, while the ostensible optic can be read between the lines — in a changing world with its new geo-strategic realities, long lost old friends can be your most reassuring ‘go-to’.

There are two issues with this narrative, though. First, is the fact that for all their friendship treaties and alliance, trade had never really been centrestage — it was almost always about defence tie-ups, buying arms and foreign policy backing.

Secondly, even when trade skyrocketed in recent years, it was virtually one-way. India exported less than 5 billion dollars worth of goods to Russia, while a lion’s share of the trade, 63.8 billion dollars of it, was Russia exporting primarily oil and gas (even if at discounted prices after the Ukraine war and ensuing western sanctions) to India.

This was something Piyush Goyal not-so subtly pointed out on Thursday at the India-Russia Forum, where he said, “India’s share in Russia’s imports is still under 2%—a figure that does not capture the true ambition of our partnership. Our shared focus is to foster more balanced and mutually rewarding trade, aiming to exceed USD 100 billion by 2030, driven by stronger Indian exports.”

Considering that Goyal said this in the presence of Putin’s deputy chief of staff (and said to be the strongman who Putin listens to when it comes to matters of economy) Maxim Oreshkin, for India the strategy seems to be clear — increase trade, and we don’t even mind cocking a snook at the US while at it, but the trade growth has to benefit India as well.

For the Russians, India is a friend worth accommodating for. The Russians are still seething at their alienation from the western world post the Ukraine war — with western businesses from McDonald’s to investors dumping Russia, even while freezing Russian assets and kicking it out of the SWIFT international banking transaction network.

“Russia a good example of how you can exist and thrive despite…sanctions western states used as a weapon,” said Herman Gref, CEO and chairman of the executive board of Sberbank, Russia’s biggest bank, in New Delhi on Thursday evening. “We have adapted completely — replaced all the technology we had from the US and Europe, we are independent and more importantly, we are more competitive than before!”

And shut out of the western ecosystem, Russia has turned to the east — China, the Arabian Gulf, and of course, India. And in a case of being on the same boat, considering India’s uncertainty with its biggest trade partner, the US, the jigsaw fits perfectly, without any puzzle.

For both nations, it is expeditious right now not just to work out more trade, but seen as doing so. After all, one of the pivotal strategies of Trump’s trade tirade has been aimed at stripping Russia of its financial resources needed in fighting the Ukraine war, his irate eyes reaching as far as India’s discounted oil purchases from Moscow, leading to troublesome punitive tariffs on much of India’s goods exports to America.

“The scope of co-operation between India and Russia goes beyond the (western) sanctioned areas,” argues Alexander Stuglev, CEO of Roscongress Foundation, a business body and Russia’s biggest trade events organiser, adding, “Western manufacturers left huge (gap) for new players to come in.”

While India’s paltry exports to the motherland include agricultural products, some machinery and the likes, experts believe there is scope in areas ranging from medical technologies, digital services and AI development (Russia has robust cybersecurity framework in place) etc, not to forget that the country is also open to labour migration for construction and agriculture on a large scale, considering its vast geography and low population.

India, growing rapidly, also needs funds, which Russian investors starved off western markets could provide — it is no coincidence that Russian investors can now dabble in the Nifty, as well as being granted special licence for exporting gold to India. Sberbank is even thinking of investing in Indian government securities, as well as opening educational institutions across India.

For Russia, the alternative to Europe and the US could well be China as well as emerging markets like India, the Arabian Gulf and even Africa. For India, Russia has the resources, and an untapped market brimming with potential. No wonder Goyal gushed later on X, “Together, (India and Russia) are committed to unlocking the untapped potential and advancing the economic development of both our nations.”

Now, wait and watch to see what Trump has to say about all this PDA!