India and Russia are negotiating a bilateral agreement to increase investments and business cooperation, the Hindustan Times reported on Thursday, citing officials from both sides.
The previous investment treaty between New Delhi and Moscow was signed in the mid-1990s. In 2017, however, India terminated bilateral investment treaties – which provided protection for investors – with 58 countries, including Russia, aiming to negotiate a new set of treaties with a better balance between investor rights and responsibilities.
According to the Hindustan Times, the investment treaty between India and Russia was initially discussed during a meeting between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin in Moscow in July. Days later, negotiations were held by officials, and the sides “mutually agreed to speedily conclude an agreement to promote and protect investments.” No deadline has been set to finalize the treaty, according to officials quoted in the report, but both sides are hoping to conclude it as soon as possible.
Modi and Putin directed officials to negotiate a bilateral free-trade agreement in investments and services, according to a joint statement from the two countries at the end of the bilateral summit in Moscow. The two leaders also agreed to increase annual trade turnover to $100 billion by 2030.
India and Russia have expanded bilateral trade to record levels in the past two years since the outbreak of the Ukraine conflict. In 2023, trade turnover surpassed $60 billion for the first time. While the spike has been largely driven by Indian exports of Russian oil and coal, both New Delhi and Moscow have stressed the need to diversify trade to make it more balanced. India has continued engagement with Russia in various sectors despite scrutiny from the West, which has accused it of helping Russia bypass sanctions imposed by the US, EU, and their allies.
Apart from hydrocarbons, Moscow and New Delhi are also working together in the nuclear sphere, with Russia’s Rosatom implementing India’s largest nuclear power project in the state of Tamil Nadu. India and Russia are also engaged in defense manufacturing, including the licensed production of T-90 tanks, Su-30MKI fighters, BrahMos missiles, and other weapons systems.
Last month, the Indian government approved a proposal for building a large port on its western coast to boost trade with Russia and Central Asia. The port in Vadhavan in the state of Maharashtra will assist the flow of trade through the International North-South Transportation Corridor – a collaborative effort involving India, Russia, Iran, and ten other Central Asian nations which aims to provide a cheaper and faster route for shipping goods than the Suez Canal.