India-Russia Trade Set to Boom despite Global Challenges

India-Russia Trade Set to Boom despite Global Challenges
Russia's Minister of Industry and Trade Denis Manturov and Indian External Affairs Minister S. Jaishankar at the 'Russia' expo in Moscow, December 26, 2023 © X/@DrSJaishankar

India and Russia are poised for a historic year of economic cooperation, with bilateral trade projected to shatter the $50 billion mark by year's end, according to Russia's Trade Minister Denis Manturov. This remarkable surge comes despite both nations facing global challenges, highlighting the deepening ties between the two countries.

The announcement came during Jaishankar's four-day visit to Moscow and St. Petersburg, where he met with Manturov at the 'Russia' expo. Their discussions covered a wide range of areas, including trade, investment, banking, logistics, energy, and food security. Particular emphasis was placed on advancing joint industrial projects.

To solidify their cooperation, both countries inked a memorandum of understanding on healthcare regulation and agreed to build additional reactors at the Kudankulam Nuclear Power Plant in India. This expansion will boost India's energy security and solidify Russia's role as a key partner in its nuclear sector.

The surge in trade is partly fueled by India's increased imports of Russian commodities like oil and coal, driven by Western sanctions imposed on Russia. New Delhi is also looking to Russia for strategic items, including defense equipment, further diversifying its trade and fostering closer financial ties.

With the SWIFT payment system no longer readily available, both nations are exploring alternative transaction methods, including direct settlements in rupees and rubles. Russia holds a significant surplus in Indian banks, highlighting the need for a robust rupee-ruble payment mechanism to facilitate growing trade volumes.

Overall, Jaishankar's visit and the projected trade boom paint a picture of a resilient and mutually beneficial partnership between India and Russia. Despite the complex global situation, both countries are actively strengthening their economic and strategic ties, setting the stage for a flourishing future.