Home / Economy / In five charts: How war fed Indo-Russia trade

One year into the Ukraine war, goods trade between Russia and India has touched new highs. The New Delhi-Moscow relations have withstood the West’s pressures, and bilateral trade has been the biggest benefactor as well as a catalyst in this transformation. However, a sharp surge in imports from sanctions-hit Moscow has made trade figures overwhelmingly one-sided. Historically, India’s imports from Russia have stayed under five times its exports to the country, with the ratio touching 4.1 in 2017-18, previously the highest under the Narendra Modi government. But in 2022-23 till January, imports have been 15 times the exports.

As a result, Russia has emerged India’s fifth-biggest trading partner, from 25th rank last fiscal. Total trade touched $39.8 billion in the first 10 months, up 277% on year. While imports have risen 384%, exports slid 13% in the period. (Country-wise and commodity-wise trade data is available only until January.) The trade basket has also diversified, even for exports. For instance, the share of Russia in India’s exports of agricultural goods and minerals has increased markedly.

“India has been facing problems in exporting goods to Russia, partly because of the sanctions and also because of a redrawing of trade routes, due to issues such as Ukraine port closures and rerouting of oil tankers," said Saon Ray, professor at Indian Council for Research on International Economic Relations. “There are also logistical problems such as the availability of ships and containers."

Crude Sizzles

Cheaper crude oil has dominated India’s imports from Russia. From 25% in the preceding six years (FY17-FY22), its share in India’s import basket from Russia has risen to 73%, making Russia the third-largest supplier of petroleum and crude products to India, up from ninth. These imports stood at $27.2 billion during April-January, a whopping 817% year-over-year rise, and higher than crude imports from Qatar, Kuwait, and Oman combined.

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With over 85% of the demand for petroleum products being met by imports, experts point out that apart from better pricing, the Russian tilt is also part of India’s moves to reduce oil dependence from West Asia. “Wherever we are able to import commodities from Russia at a better/fairer price, we have used that

opportunity. Russia also is keen to export as many goods as possible, because they also require foreign exchange," points out Madan Sabnavis, chief economist at Bank of Baroda.


Non-crude Growth

While India’s crude imports have largely dominated the headlines, a Mint analysis of other items also threw up interesting trends. India’s imports of spices, edible oil, agro-chemicals, fertilizers and coal also saw a sharp spike. Although the value of imports of these items is nowhere close to that of petroleum products, the growth has been stark. Imports of these products from Russia have more-than-doubled this fiscal year, compared with the FY17-FY22 average. Edible oil, coal and fertilizers are among the goods clocking the highest growth: 335%, 390% and 425%, respectively.

Exports also saw compelling trends. India’s exports of surgical items, transport equipment and minerals saw sharp escalations as the West choked its supplies to Russia. Exports of surgical items grew close to 77%, while that of processed minerals swelled to $70 million, from just $1.4 million a year in the preceding six years (a 4,939% rise). India’s exports of tobacco also grew 168%.

Way Forward

At a time of a divided world order, with most Western nations isolating Russia, has India’s policy of diplomatic moderation and non-alignment helped it avoid the worst for itself? Experts Mint spoke with say it has. “In terms of our energy security, it has helped—India has avoided a very difficult situation, given that we are so import-dependent not just for crude, but even products like oil seeds and fertilizers," Ray said. Sabnavis added: “There has been respect shown to the fact that India has taken its own political decision about how to deal with Russia. So, we are not seeing any bias in terms of trade with other countries."

India’s unique position presents an opportunity to shore up trade, and services can be a sweet spot. With the goods-related supply chain disruptions unlikely to end anytime soon, Ray feels India must focus on improving services exports since there is potential.

Nandita Venkatesan
Nandita Venkatesan is a data journalist at Mint, and has a keen interest in understanding the usefulness of data in driving sound public discourse and informing policymaking. She has over four years of experience across journalism and health research. She previously worked with the Economic Times, Mumbai, and the Vaccine Confidence Project in the UK. An alumnus of the Indian Institute of Mass Communication, Nandita also pursued a masters’ in public policy from University of Oxford as Chevening-Weidenfeld Hoffmann scholar.
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