The Role of India’s Private Sector in Economic Relations with Russia (1991-2024)

Introduction In 2023, India’s trade with Russia was recorded at US$65 billion, [1] significantly higher than the US$12.34 billion in 2022, and more than double the target of US$30 billion set by both countries in 2019. [2] This growth in trade was mainly due to discounted energy imports from Russia amid its ongoing war in Ukraine and subsequent Western sanctions. Today, India is a major trading partner for Russia, with the bilateral trade dominated by Russian exports to India. [a] In recent years, two factors have influenced this growing economic relationship—first, Russian aggression in Ukraine since 2014 has resulted in a series of sanctions and trade restrictions, limiting its access to the European market; and second, economic growth in India has generated a higher demand for commodity goods such as metals, energy, and agricultural products. Amid continued Western sanctions, Russia will increasingly turn towards its east, including India, to bolster its economic interests. India, for its part, is keen to play a bigger role in improving Eurasian trade and connectivity and boosting its ties with the Eurasian market, particularly by utilising the International North-South Trade Corridor (INSTC) [b] and the proposed Eastern Maritime Corridor. [c] In July 2024, India and Russia set a bilateral trade target of US$100 billion by 2030. [3] While some assessments view this target as achievable, [4] the private sector in both countries will need to increase their participation to achieve this level of economic cooperation.