India-Russia Trade: 70 Years On, Ties Still Strong And Growing. But A Balancing Act Is Needed Now
A recent statement by Russian Trade Representative Alexander Rybas, on the 70th anniversary of commercial ties between Russia and India, highlighted the need for increasing bilateral trade, which in the changing geopolitical framework assumes significance with the rise of China, US’s indeterminate Indo-Pacific policy, and a multi-polar Asian paradigm. In his statement, the trade representative highlighted that the withdrawal of Western countries from Russia has opened opportunities for Indian pharmaceutical, energy, and food industries to expand their footprint in that country, which promises to further consolidate the trade relations between the two nations.
The core of the contemporary India-Russia relationship is based on the pillars of continuity, mutual trust, special bilateral trade, and economic relationships. Both countries believe in a multi-polar world, where multiple poles are important centres of economic and political power serving as independent actors that foster common regional interests, negotiated settlements, and the possibility of independent foreign policy.
Under this model, Russia has supported the Make in India initiative, and has been aiding India to increase local production to transit from an importing nation to becoming an exporting nation with enhanced capacity development. Several questions arise regarding the history of India-Russia trade relations, the recent steps taken to facilitate the relationship, and the possible way forward for India to retain its strategic autonomy.
History Of India-Russia Trade Relations
India and Russia have enjoyed a long history of friendly, mutually beneficial relations. In 1953, the first trade agreement between the Union of the Soviet Socialist Republics and the Government of India was signed. Such an engagement continued in defence cooperation during the Cold War through military engagement and economic aid. It was further consolidated in 1971 when the Indo-Soviet Treaty of Peace, Friendship, and Cooperation was signed.
Over the years, several institutions have been formed to strengthen trade with Russia, such as the India-Russia Intergovernmental Commission for Trade, Economic, Scientific, and Cultural Cooperation, which is the apex G2G forum for bilateral economic cooperation and is chaired by the external affairs minister from the Indian side and a deputy prime minister from the Russian side. These developments have strengthened the relationship and led to both nations recognising in 2010 that theirs is a special and privileged strategic partnership. This shows the bilateral trade relationship has been regularly evolving, and steps are being regularly irrespective of the party in power in India.
ALSO READ | How India Got G20 New Delhi Leaders’ Declaration Clinched Despite Stiff Differences
Recent Steps To Facilitate India-Russia Trade Ties
In recent times, pursuant to the decision taken during the 19th Bilateral Summit in 2018, India's Russian Strategic Economic Dialogue was established to identify greater synergy in trade and investment, infrastructure, agriculture and agro-processing sector, small and medium business support, digital transformation, frontier technologies, and industrial and trade cooperation.
There was further development in 2019, as India decided to join the Eastern Economic Forum to advance India's trade in the Russian Far East. Arms trade is one of the most important pillars of the Russia–India relationship as Russia remains a major supplier of weapons to India, and Russian equipment still makes up a vast portion of the Indian Armed Forces' force structure. Still, Russia is facing stiff competition in the Indian arms market due to India's desire to diversify its weapons supply and develop its defence industry, resulting in declining Russian arms deliveries to India. Yet, Russia remains an important supplier of weapons and oil to India.
By not joining the Western sanctions on Russia, India has demonstrated its independent foreign policy. India continues to be an important market for arms and oil for Russia as India-Russia ties have sustained for many years, and both countries have no reason to forsake the benefits of this relationship soon. India increasingly seeks to set the terms of their engagement as it has really responded to the changing geopolitical and economic conditions by engaging in digitisation and creating opportunities for its citizens.
ALSO READ | India Opens Market For US Farmers And Poultry Producers, Gets Little Benefits In Return
But Current Geopolitics Demands A Balancing Act Too
As India looks to become a major power in world politics, shedding its middle power status, its economic relationship holds significance. There has already been an evolution from purely buyer-seller relationships to joint research, design development, and emphasis on becoming an exporter, which complements the Make in India mission.
In its pursuit of maintaining strategic autonomy, India now faces the delicate task of harmonising its partnership with Russia without impeding its relations with the West. Many of the Western nations have imposed a series of sanctions on Russia in response to its actions in Ukraine. Consequently, the imperative of the moment lies in adopting a policy of independent decision-making on the international stage, thereby carving out a distinctive position within the global community of nations.
Abhinav Mehrotra is an Assistant Professor and Amit Upadhyay an Associate Professor at Jindal Global Law School, O.P. Jindal Global University, Sonipat, India.
Trending News
