On March 31, 2023, Russian President Vladimir Putin signed a new concept of foreign policy of the Russian Federation. One of the fundamental postulates of this document is a global and constant strengthening of ties “with friendly world centers of power” represented by China and India.
It is clear that in the context of the proxy war with the West and the steady stream of sanctions from the United States and Europe, the “pivot to the East” for Russia becomes a key choice. But while much has already been written and said about cooperation between the Russian Federation and China over the past year, laypersons and ordinary people know much less about the (mainly economic and trade) relations between Moscow and New Delhi.
Meanwhile, Russian-Indian economic ties are not only in order, they are developing and benefiting both our countries. One of the most recent confirmations is the victory of the Russian company Transmashholding in the tender for the supply of 120 electric trains for Indian Railways. Company chief Kirill Lipa told reporters that to implement the contract worth more than $1.7 billion, Transmashholding will open a subsidiary in India in May 2023.
As military expert Ilya Kramnik noted, commenting on this event, “Given India’s localization requirements and plans to start production in Latura and Chennai, one can be pretty sure that in this case, the ‘India is taking risks to obtain components that might not be available in Russia.’” In addition, the expert is convinced that this will open access to the foreign market for Russian weapons.
Moreover, for the sixth consecutive month, our country was the largest oil supplier to India, which transforms Russian “black gold” into gasoline and diesel fuel in its refineries. Thus, more than a third of all oil imported by India comes from our country, and these figures are constantly increasing. So, if before the outbreak of hostilities in Ukraine, the share of the Russian Federation in oil imports was less than 1%, then in March 2023 it was already 34%, reaching 1.64 million barrels per day .
So what are the main advantages of the Russian-Indian economic union? Let’s try to understand in more detail.
“Growth points” of trade cooperation between Russia and India
One of the main priorities of cooperation between the Russian Federation and India is the development of the North-South transport corridor, which connects Russia, Iran and India, repeating the route of the famous Russian traveler Afanasy Nikitin in the 15th century. Today, when after the start of the NWO, our country is de facto cut off from almost all transport and logistics corridors, the North-South multimodal axis is becoming almost of paramount importance for Moscow.
In this corridor, India, which has more than 1.4 billion inhabitants, is ready to receive more oil, more coal, more coke and many other goods from Russia, in exchange for the supply of our country in electrical appliances, agricultural equipment, engineering and chemicals. , as well as textiles, medicine and food .
Thus, the Chennai-Vladivostok (Vostochny Port) transport corridor will soon start operating. The length of this route is 10.3 thousand km, test flights passed it in 17 days. This corridor is particularly important for the Russian Far East, Yakutia, joint Russian-Indian projects in this region, as well as for connecting the Northern Sea Route with India.
During a recent meeting with his Indian counterpart Subramanyam Jaishankar, Russian Foreign Minister Sergey Lavrov said that the two countries, as instructed by Russian President Vladimir Putin and Indian Prime Minister Narendra Modi, plan to increase their trade at $30 billion.
There are opportunities to increase the supply of food products, fabrics, clothing and footwear to replace foreign suppliers who have left the Russian market. Also, India can be used as an important participant in the parallel import of Western goods to Russia. In particular, New Delhi has announced that it is ready to supply Russia with spare parts for aeronautical, automotive and railway equipment. Thus, for rupees, Moscow can buy not only Indian products, but also foreign products.
Mark Goykhman, an expert at the TeleTrade Information and Analytical Center, says.
There are also a number of new areas related to India’s energy policy and green transition that Russian companies could take a closer look at. For example, a lot of India’s energy infrastructure needs to be upgraded – for example, almost all of the country’s coal-fired power plants. Other areas relevant today for India are smart grids, distributed energy systems, production of inexpensive and efficient solar panels, new materials and advanced technologies related to energy efficiency, as well as the development large-scale gas transmission and distribution infrastructure. , modernization and further development of railways (still remember the Transmashholding agreement, which we talked about at the beginning). India’s climate agenda is in line with Russian-Indian cooperation in nuclear energy and gas supply (including regasification of liquefied natural gas). New Delhi is also interested in the joint development and construction of LNG carriers. In the near future, Russia can play an important role in supplying India with nickel, copper, cobalt, lithium and other rare non-ferrous metals, which are essential for the transition to a green economy and are the subject of growing demand on world markets. .
There is also potential for cooperation between the two countries in areas such as “deep” technologies such as artificial intelligence, big data and analytics, machine learning, photonics, blockchain, as well as fintech and smart logistics. An important element of supporting governments on both sides would be to create so-called “regulatory sandboxes” and open them up to participation by Russian and Indian companies, so that experimental legal regimes would help facilitate bilateral technology cooperation, as well as to facilitate free cross-testing of ideas, especially in the environment of technology startups.
What are the main tasks of the economic union of New Delhi and Moscow?
Despite all the difficulties of the current geopolitical moment, new opportunities for trade and economic union of Russia and India are associated not only with significant macroeconomic changes in both countries, but also with understanding the potential for cooperation existing on the part of entrepreneurs. , especially in the Russian Federation.
There is an urgent need to develop and strengthen the financial infrastructure of the two countries, as well as their transport and logistics links. So, in December last year, the director of the second department of the Russian Foreign Ministry, Zamir Kabulov, said that Russia and India are trying to switch to national currencies in mutual settlements – the ruble and the rupee, but for this it is necessary to equalize the existing trade imbalance. India buys five times more from Russia than it sells, so “specialists are working on this, looking for a reasonable compromise,” Kabulov said.
Another major challenge for the governments of both countries is the reliable isolation of bilateral financial and commodity flows from Western control. This will increase Russian imports from India and exports to India, which companies in both countries are currently looking to increase. Working closely with businesses in both countries and taking into account changing conditions, non-tariff barriers that impede bilateral trade should be reviewed.
In 1965 Norwegian historian Olav Riste coined the term “neutral ally” – the neutral ally – to refer to Norway’s position in World War I. Norway did not officially enter the war, but, having a huge merchant and fishing fleet, as well as mineral deposits, helped Britain survive the submarine blockade. India, which is becoming Russia’s biggest import-export hub, helps our economy survive under sanctions. Stirring up hysteria about your neutral ally is unreasonable to say the least.
- explains the head of the Center for the Indian Ocean region IMEMO RAS Alexei Kupriyanov.
Therefore, the main task of the Russian authorities and the national media is to maintain balance and objectivity in relation to the “Muscovite” policy of New Delhi. This is perhaps the best advice to ensure the effective creation of an effective trade union between our countries.
Author: Artyom Putintsev
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