Russian President Vladimir Putin has embarked on a significant state visit to India, marking his first in nearly four years. The visit is poised to focus on strengthening economic ties between the two nations, with a particular emphasis on expanding beyond traditional sectors such as energy and defense. This visit comes at a time when Russia faces increasing international sanctions due to its ongoing conflict in Ukraine, while India seeks to diversify its export markets amidst tariff challenges imposed by the United States.
The two-day visit is expected to result in several trade agreements, as both nations aim to balance their bilateral trade, which is currently skewed towards Russian oil exports. In an interview with India Today, Putin expressed his enthusiasm for meeting Indian Prime Minister Narendra Modi, referring to him as “my friend” and highlighting the vast range of cooperation between the two countries, including ship and aircraft manufacturing, nuclear energy, and space exploration.
Russia’s Objectives in India
Russia’s primary goal during this visit is to increase imports of Indian goods, thereby balancing the trade dynamics that heavily favor Russian oil. Deputy Kremlin Chief of Staff Maxim Oreshkin emphasized the strategic importance of developing relations between the two countries, stating, “We want to significantly increase their purchases. This is not a momentary story, but a strategic choice.”
India, as the world’s fastest-growing economy, presents numerous opportunities for Russian businesses. The two nations have set an ambitious target to raise their two-way trade to $100 billion by 2030. Their commerce has already seen a significant increase, rising more than five-fold from approximately $13 billion in 2021 to nearly $69 billion in the 2024–25 period, driven largely by Indian imports of Russian oil.
India’s Trade Aspirations
India, on the other hand, is keen to find new markets for its exports, particularly in light of the tariff war initiated by former US President Donald Trump. India’s Trade Minister, Piyush Goyal, has expressed the country’s desire to diversify its exports to Russia, with a focus on cars, electronic goods, data-processing equipment, machinery, industrial components, and food products.
“Russia has a huge demand for a wide range of industrial goods, consumer products, presenting multiple untapped opportunities for Indian businesses,” Goyal stated at a recent conference. He emphasized the need for a more balanced trade basket between the two countries, suggesting that India could increase exports of shrimp, among other products.
Impact of the Ukraine Conflict
The ongoing conflict in Ukraine and the resulting sanctions have complicated Russia’s oil exports, a critical revenue stream for the country. India’s reliance on Russian oil has become a contentious issue with Washington. Aleksei Zakharov, a fellow at the Observer Research Foundation, noted that Russian oil accounted for about 35% of India’s oil imports over the past three and a half years. However, recent sanctions have led to a decline in these imports.
“There are still some loopholes in the sanctions mechanisms and there are attempts to recalibrate supply chains,” Zakharov explained. “Russia offers to import oil from non-sanctioned entities, and some Indian companies are exploring ways to continue imports.”
Kremlin spokesperson Dimitri Peskov assured that the drop in Indian oil imports would be temporary, as Moscow works to circumvent Western sanctions. Meanwhile, Modi and Putin were scheduled to discuss the war in Ukraine informally over dinner, with Modi likely to reiterate his stance that it is time to cease hostilities.
Broader Discussions and Future Prospects
Beyond trade, the leaders are expected to discuss potential collaborations in space exploration and labor market solutions, particularly addressing shortages in Russia with Indian workers. Although India has historically relied on Russian weapons for its defense program, this trade has declined over the past decade due to sanctions on Russia’s military and industrial sectors.
“Russia’s share of the Indian arms market has significantly reduced as India has been prioritizing deals with other partners,” Zakharov noted. “However, Russia remains a key defense partner due to existing military platforms within the Indian armed forces.”
As the visit unfolds, both nations are poised to navigate a complex geopolitical landscape, seeking to strengthen their bilateral ties while addressing the challenges posed by global tensions and shifting alliances.
