Russia-India trade reached a record $50 billion in 2023, but the two countries should aim for a more even balance in their economic ties, Moscow’s ambassador to New Delhi said this week.
Denis Alipov raised the issue at the Vibrant Gujarat Global Summit in Gandhinagar, stressing that sustainable growth in bilateral transactions will require Indian companies to export more goods to Russia and consider investing in manufacturing and other sectors.
“Our mutual total investments have crossed $30 billion, and we see many opportunities going forward. Especially now is a very opportune time to capitalize on the momentum for Indian companies to invest in Russia,” Alipov said.
He highlighted the void created in several sectors of the Russian economy after Western companies pulled out over the Ukraine conflict. They include automobile manufacturing and auto parts, pharmaceuticals, retail, and many other niches where India has seen strong growth in the past decade.
The envoy noted that Moscow and New Delhi are now working on the ‘early conclusion’ of a free trade deal (FTA) with the Eurasian Economic Union (EEU), comprising five post-Soviet countries – Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.
“We are also hopeful about concluding a renewed agreement on investment protection between our countries. Certainly, these will substantially facilitate trade flows and provide greater market access to the companies and help reduce the current huge trade imbalance that we have. Indian exports to Russia need to increase, and these steps will facilitate that,” Alipov said.
The event in Gujarat, a state on India’s west coast, brought together hundreds of companies of different sizes from over 30 countries. The envoy pointed to the strong ties between Russia and the state. “Gujarat is a very strong connection point for the trade and investment partnership between our countries,” he said.
Russia’s largest oil company Rosneft is the biggest stakeholder in Nayara Energy, which operates the second-largest refinery in India. The company was acquired by a Rosneft-led consortium in 2017 for nearly $13 billion, becoming Moscow’s largest investment in the country, and overall India’s largest single foreign direct investment.
India’s first large-scale butyl rubber facility was set up in Jamnagar, on the coast of Gujarat, by a joint venture between India’s largest conglomerate, Reliance, and Russia’s integrated petrochemicals company Sibur. Gujarat is also the leading destination for Russia’s rough diamonds, Alipov noted.
The state is also poised to become a destination for the financial sector and IT companies, in view of the upcoming GIFT City (Gujarat International Finance Tec-City). GIFT City is being promoted by the Indian government as Asia’s newest financial hub, with a focus on building a robust and innovative infrastructure to facilitate cross-border financial operations.
The head of the Russian delegation at the Vibrant Gujarat Summit, Deputy Minister for the Development of the Russian Far East and Arctic Anatoly Bobrakov, told RT that Indian businesses are “actively exploring opportunities in the pharmaceutical, diamond, and hydrocarbon sectors in the Russian Far East, and several investment projects have been outlined for implementation.”
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