Russia-India Intergovernmental Commission

Russia-India Intergovernmental Commission

Tags:      Gig Economy     Economy     WTO     WTO Public Stockholding     MSP     Economic Growth     Masala Bond     Environmental Performance Index     Forecast of Economic Growth     Functions of the Finance Commission

April 21, 2023

• A meeting on Inter-governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation between India & Russia was held recently.

The Major Points

               • Increase in trade - At nearly $45 billion and with an increase of 2.6 times during the last year, Russia and India hailed the bilateral trade surge and the 2025 targets were also surpassed.

               • Trade challenges - Both the countries acknowledeged the issue of trade imbalance and gave a call to use “national currencies” and greater market access to bypass sanctions. The Russian delegation proposed that Indian organisations can increase exports in pharmaceuticals and road construction. Due to western sanction worries, the Indian delegation maintained that Indian enterprises should protect themselves from “over-compliance” while increasing business ties with Russia.

               • FTA between the Eurasian Economic Union and India - The commission also mentioned the advancements in FTA negotiations which was started in 2017 between the Eurasian Economic Union and India. An FTA agreement can propel trade ties which have been lagging behind space, nuclear and defence co-operation.

               • Enhanced trade & the Ukraine problem - Although the trade momentum and the exercise to balance exports and imports with Russia are appreciated, the circumstances around the developments cannot be ignored. Since last year when the Ukraine crisis began and sanctions dramatically reduced exports from Russia, the country focussed its attention towards India and some other nations which were unperturbed by the export sanctions. Since the Ukraine crisis, India imported 28% of its overall oil requirements from Russia which was a mere 0.2% earlier and that has led to a growing trade deficit.

               • Decision of India - When the Ukraine war started, alongwith India, many countries started to find alternative trading arrangements for Russian-exported commodities. India’s selection of oil purchase from Russia will be guided through its energy security needs. India has been compelled to maintain its trading ties due to the massive discounts being offered by Russia on fertilizers and crude oil.

               India-Russia Economic Relations - Both the countries have revised their targets of expanding bilateral trade by 2025 to US $ 30 billion and bilateral investment to US $ 50 billion. Major commodity imports by India through Russia include crude oil, fuel items, tea and coffee, vegetable and animal fat, fertilizers, nuclear reactors, etc.

Source - PIB