India The West was heavily retaliated against for the escalation Imports of Russian fossil fuels In the face of a full-scale invasion of Moscow Ukraine. Deliveries from Russia, the world’s third-largest oil importer, are set to increase tenfold in 2022 and double again last year, thanks to steep price cuts. Coal is imported from India Russia It has tripled in the same two-year period.
Despite accusations of funding Putin’s war machine, New Delhi has justified the increase by citing India’s traditional „stable and friendly” ties with Moscow and its heavy reliance on imported oil.
As Prime Minister of India Narendra Modi Meets the Russian president Vladimir Putin In Moscow this week, the Kremlin will boost trade with the South Asian power to boost Russia’s commodity-based economy and reduce its influence. Western barriers On the war in Ukraine.
Announcing the talks, Kremlin spokesman Dmitry Peskov said they would increase „mutual political will” to work together on global and regional security issues. Trade and economic cooperation.
India on the other hand must Take a subtle route It aims to maintain strong ties with the West, seek new trade ties with Moscow, and maintain a neutral position in the conflict.
DW looks at the current state of India-Russia trade relations and what the two leaders might agree on next.
How strong are India-Russia ties?
During the Cold War, the Soviet Union and India formed a strategic partnership for defense and trade that continued after the end of communism. In 2000, Putin, then Prime Minister of Russia, signed a new declaration of cooperation with New Delhi.
India is a key market for Russia’s defense industry – until recently its largest. Over the past two decades, Moscow has provided 65% of India’s arms purchases, totaling $60 billion (€55.8 billion), according to the Stockholm International Peace Research Institute (SIPRI).
After Russian forces invaded Ukraine, Moscow sought to deepen its ties with India and China as a counterweight to the West. The Kremlin offered New Delhi huge discounts on oil, coal and fertilizer supplies. Raised the nation’s finances to fight the war.
As a result, India emerged as a major export market for Russian fossil fuels seeking new destinations in the wake of Western sanctions. For example, in April, Russian crude oil supplies to India hit a new record high of 2.1 million barrels per day (b/d), according to financial analysis firm S&P Global.
Two-way trade between the two countries reached a record $65.7 billion last year, according to figures from the Indian Commerce Department. However, trade is heavily stacked in favor of Russia, with India importing $61.4 billion worth of goods, including oil, fertilizers, precious stones and metals.
„For a long time we have been looking at Russia from a political or security perspective,” Indian Foreign Minister Subramaniam Jaishankar told an industry conference in May. „As the country turns eastward, new economic opportunities present themselves … the increase in our trade and new areas of cooperation should not be considered a temporary phenomenon.”
What are New Delhi’s concerns about relations with Moscow?
While the West has limited its criticism of India over a cheap oil deal with Russia, New Delhi’s historical reliance on Moscow for arms is a major concern for the US and Europe.
„New Delhi has demonstrated a nuanced approach to navigating the Russia-Ukraine conflict, maintaining good relations with Moscow and the West,” said Alexei Zakharov, a researcher on Indian foreign policy at the French Institute of International Relations (IFRI). Wrote on a piece of paper Last month.
Zakharov wrote of „structural challenges” that still appear to prevent the two sides from reviving economic ties, with defense cooperation between Russia and India currently „in a strained state,” partly due to the war in Ukraine and Western sanctions affecting Russia’s arms industry.
India has had several negative experiences in previous deals with Russia’s arms industry. A 2004 deal to buy a Soviet-era aircraft carrier, upgraded and restructured by Russia, has been criticized for long delays and doubling costs.
In 2013, the explosion and sinking of a Russian-built submarine that killed 18 crew members put further pressure on India’s leaders in their defense cooperation with Moscow.
The Indian military is currently waiting for two of the five S-400 air defense systems that Russia agreed to deliver as part of the 2018 contracts, local media reported in April.
While India was the leading destination for arms transfers from Moscow between 2017 and 2022, Russia’s share of defense exports to the South Asian country fell from 65% to 36% over the same period, SIPRI data showed.
French and German arms suppliers New Delhi has benefited from a strategic shift amid reluctance among Indian policymakers to break Western sanctions on Moscow by signing new deals with the Kremlin.
Is more trade between India and Russia on the cards?
Modi’s visit to Moscow – his second foreign trip since his re-election in June – will further emphasize India’s ties with the Kremlin. As a rising global power, New Delhi is keen to prioritize its own strategic interests while balancing relations with the West, Russia and China.
Recently, New Delhi has called for „dialogue and diplomacy” to end the war in Ukraine Ukraine Peace Summit In Switzerland, India’s representative did not sign the joint statement that Ukraine’s territorial integrity must be respected in any peace agreement.
“On the face of it, India’s neutrality may appear [in the Ukraine war] It has allowed bilateral relations with Moscow to strengthen,” Zahgarov said in his latest paper. „However, a closer look shows that India is very cautious in its relations with Russia. [so] It will be more important for both sides to maintain the dialogue and bet than to block new deals.”
While new deals to buy Russian arms are few and far between, Modi’s „Made in India” initiative, aimed at developing the country as a manufacturing hub, will see Russia supply raw materials and components for domestic Indian arms production.
Russia is also interested in expanding the International North-South Transport Corridor (INSTC), a road, sea and rail project linking Russia to India via Iran. Russia shipped the first batch of coal through INSTC last month.
The project has been in the works for more than two decades and due to the obstacles Russia faces from Western sanctions, INSTC is now a key trade priority for the Kremlin.
Another project taken up with new urgency is the Chennai-Vladivostok sea route. First proposed in 2019, the 10,300-kilometer (5,600 nautical mile) sea route from Russia’s eastern coast would facilitate the safe flow of Russian energy and other raw materials to India.
Compared to the existing route through the Suez Canal, the proposed corridor is expected to reduce shipping time from 40 to 24 days.
Edited by: Ashutosh Pandey
This article was originally published on July 4. Updated on July 8 to reflect recent events.