India-Russia Economic Partnership: Boosting Trade and Investment

India and Russia have maintained a robust relationship since the establishment of the Strategic Partnership Declaration in 2000.

This partnership was further strengthened in 2010 when it was elevated to a Special and Privileged Strategic Partnership, reflecting the deepening ties between the two nations.

Strengthening trade and economic relations has been a key priority for both governments, with ambitious targets set to increase bilateral investment to USD 50 billion and bilateral trade to USD 30 billion by 2025.

During Prime Minister Narendra Modi’s visit to Russia in July 2024, he was awarded the Order of St. Andrew the Apostle, the highest state honor in Russia, by President Vladimir Putin in recognition of his contributions to fostering India-Russia ties. The two leaders engaged in discussions aimed at enhancing economic collaboration across several key sectors, including energy, trade, manufacturing, and fertilizers, as well as streamlining customs processes. They also prioritized strategic trade routes such as the North-South International Transport Corridor, the Northern Sea Route, and the Chennai-Vladivostok Sea Line.

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In a bid to further strengthen their partnership, New Delhi and Moscow have agreed to promote investments, initiate joint projects, and expand cooperation in the digital economy and education sectors. As part of these efforts, India announced the establishment of two new consulates in Kazan and Ekaterinburg and reviewed progress on nuclear energy initiatives, including the Kudankulam Nuclear Power Plant.

At the recent 25th session of the India-Russia Intergovernmental Commission on Trade, Economic, Scientific, Technological, and Cultural Cooperation (IRIGC-TEC), Russian First Deputy Prime Minister Denis Manturov reported that trade turnover between Russia and India has increased more than fivefold over the past five years, positioning India as Russia’s second-largest foreign economic partner. Both nations are working to enhance the Rupee-Ruble trade mechanism and have established Vostro accounts to facilitate transactions in local currencies.

Manturov also reaffirmed their commitment to finalizing a Free Trade Agreement (FTA) between the Eurasian Economic Union (EEU) and India, along with a bilateral agreement focused on services and investments, emphasizing that these initiatives align closely with the needs of the business community.

Manturov, further expressed ongoing efforts to improve cooperation between Russian and Indian banks and indicated a desire to expand direct air connectivity between the two countries. Currently, Aeroflot operates 12 regular flights weekly from Moscow and Yekaterinburg to Delhi and Goa. He expressed hopes for more frequent flights, a broader route network, and the resumption of services by Indian airlines. Additionally, he highlighted collaborative efforts on the joint production of high-speed electric trains for Indian Railways under the “Make in India” initiative.