India-Russia trade doubled to nearly $50 billion in Jan-Sept: Russian ambassador

Bilateral trade between India and Russia doubled to almost $50 billion during January-September owing to strong demand for hydrocarbons in India, Russian's ambassador Denis Alipov said. He added that trade between the two countries increased by more than 200% year-on-year during the first two quarters of FY24.

“Our trade has increased by 2.1 times in January- September this year, up to almost 50 billion USD. 48.8 billion USD to be precise, and this is expected to grow further and substantially surpass the figures of the previous year,” Alipov said at a conference in the capital on Friday.

Since the start of the Ukraine-Russia war, Moscow has swiftly risen up the ranks to become the fourth-largest exporter to India, mainly due to its oil exports. India’s imports from Russia grew nearly five-fold in the last financial year to $46.2 billion.

Alipov said India and Russia were pursuing joint projects in key fields such as defence, railways, petrochemicals, shipbuilding and agricultural machinery, among others. “We hope for the conclusion of a free trade agreement between India and the Eurasian Economic Union,” he said.

"The development of new trade routes like the Eastern Maritime Corridor and the Northern Sea Route will also be of interest in deepening trade ties," Alipov added.

Speaking at the same event, Rajesh Kumar Singh, secretary of the Department for Promotion of Industry and Internal Trade, said while increased trade between the two countries is welcome, the skewed trade balance needs to be addressed.

“While we hope that we can increase our bilateral trade further, there has been an area of concern in the past about the trade balance between the two countries. Indirect costs to Russia are comparatively lower, leading to a skewed balance of trade," Singh said.

During FY23, India had a $43 billion trade deficit with Russia, which left their exporters with large surpluses in their Vostro accounts in India. India has diversified its export basket to Russia to include pharmaceuticals, fertilisers, coal, diamonds, chemicals and ceramics, among other goods. 

Indian refiners are using a mix of currencies, including the yuan, to settle most of their Russian oil purchases. Two countries previously discussed trading in their local currencies but this is yet to take off because of currency volatility and the high trade deficit.