New Delhi: Amid the ongoing conflict between Ukraine and Russia, India is planning to boost shipments to Moscow by an additional $2 billion, quoting sources Bloomberg reported on Tuesday.
Both India and Russia are working on a payment system in local currencies to continue bilateral trade. The West have already put sanctions on Russia for its invasion to Ukraine.
The sources have revealed that the Centre is in talks with Moscow to liberalise market access for several Indian-made products. The two governments work toward a proposal to settle trade in rupees and rouble and look for ways to balance the trade given that India is a net importer of Russian goods.
The government is keen to continue bilateral trade with Moscow due to its dependency on Russian weapons and the prospect of buying cheaper oil as global prices soar. According to the report, India is looking to export products supplied by countries who have stopped shipments after US and its allies imposed sanctions on Russia.
On the list are pharmaceutical products, plastics, organic and inorganic chemicals, home furnishings, rice, beverages such as tea and coffee, milk products, and bovine products.
India has come under severe criticism for lifting imports of oil to take advantage of a dip in prices after US, Europe, Australia, and Japan piled economic sanctions onto Russia in response to its war against Ukraine.
US President Joe Biden on Monday conveyed Prime Minister Narendra Modi that the US stands ready to help India diversify its energy imports, which would make it less reliant on Russia.
An analysis by the trade department shows that India can easily scale up exports to Russia in the top 20 items it needs to imports. Marine products, textiles and apparel, footwear, machinery, and electronics are some of the other items India is seeking to send to Russia.
Currently, India’s exports to Russia stand at a miniscule $3 billion compared to the over $68 billion of shipments to the US. It could be higher but for steep logistics cost, sanitary rules, the language barrier and lower allocations in government procurement done by Russian state-run firms. Total bilateral trade between the two countries stood at $11.8 billion in the first 11 months starting April 2021, higher than $8.1 billion recorded for the previous full-year.
India has historically attempted a neutral stance on tensions between major powers, even as it has joined groups such as the Quad security alliance with Australia, Japan, and the US.