Russia and India have made tangible progress in talks on plans to jointly produce military equipment, Russian Foreign Minister Sergei Lavrov said on Wednesday (December 27th), after talks with his Indian counterpart Subrahmanyam Jaishankar in Moscow.
Speaking at a press conference, Lavrov said that such cooperation is of a strategic nature and is in the interest of both countries and will help ensure security on the Eurasian continent. He said Moscow respects India’s desire to diversify its military equipment suppliers and is also ready to support New Delhi’s desire to manufacture things India needs in India.
Kremlin spokesman Dmitry Peskov said Russian President Vladimir Putin would meet Jaishankar later on Wednesday.
India has become one of Russia’s key economic partners since the West imposed comprehensive sanctions on Moscow in 2022 over the war in Ukraine. Russia has redirected much of its oil exports to India and stepped up diplomacy within the Brazil, Russia, India, China, and South Africa (BRICS) group of countries, a grouping of which both countries are founders. According to Jaishankar, India-Russia trade is expected to reach $50 billion this year. He said New Delhi wants to sign a bilateral investment agreement with Russia, as well as a free trade agreement with the Moscow-led Eurasian Economic Union.
The war in Ukraine strengthened ties in BRICS
Due to ongoing geopolitical tensions between Russia and the West, the world’s largest country has strategically expanded its economic ties with Asia, including India. Recent figures from the Indian customs office reveal a significant increase in trade between Russia and India, which reached $54.7 billion from January to October 2023, doubling the figure compared to the same period last year.
During the ten months of 2023, Russia exported goods worth $51.4 billion to India, while India supplied Russia with products worth $3.3 billion. This increase cemented Russia as India’s fourth largest trading partner and second most important supplier, after the United States (U.S.). India’s trade with the U.S. declined by nine percent to $99.9 billion in the same period.
In 2022, Russia entered the list of India’s top five trading partners for the first time, with bilateral turnover of $38.4 billion, primarily thanks to energy trade. Enhanced trade and economic cooperation between India and Russia is aligned with the common goal of both countries to increase bilateral investment and trade.
To facilitate this growth, several institutionalized mechanisms have been established, including the Russian-Indian Intergovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation. In addition, the permanent mechanism, launched by the Ministry of Economic Development of Russia and the Ministry of Trade and Industry of India, aims to eliminate trade, economic and investment barriers. In an effort to further strengthen economic cooperation, talks are underway between India and Russia to explore a ”rupee-ruble transfer” route for mutual settlement of payments, with the aim of reducing costs, time and risks associated with payments.
Discussions on the rupee-ruble route began as relations between Russia and the U.S. deteriorated after the crisis in Ukraine in 2014, worsening in 2022 when Russia launched what it called a ”special military operation” in Ukraine. Consequently, the Russian economy has been operating under international sanctions for the past nine years. Since then, Russia has adopted various measures to reduce its dependence on the U.S. dollar, Forbes reports.
