India and Russia have announced their joint initiative to enhance strategic economic cooperation, with the goal of reaching a bilateral trade target of $100 billion by 2030. This announcement came after the 22nd Annual Bilateral Summit between Indian Prime Minister Narendra Modi and Russian President Vladimir Putin in Moscow.

During the summit, the two leaders signed nine Memoranda of Understanding (MoUs) spanning various sectors. These agreements include provisions to boost trade and joint investment projects between Russia's Far East and India. Increasing Indian investments in the resource-rich Russian Far East was a key agenda item for the annual summit.

Focus Areas of Economic Cooperation

The joint statement on economic cooperation outlines several critical areas of focus, including the introduction of digital financial instruments, exploration of long-term contracts for crude supplies, and the expansion of trade volumes via the International North-South Transport Corridor (INSTC), the Northern Sea Route, and the Vladivostok-Chennai corridor.

Both sides are focused on developing stable transport corridors and intend to pay close attention to production and marketing chains in Eurasia, aiming to create a Greater Eurasian space. This strategic move is seen as a counterbalance to Chinese initiatives in the region.

India and Russia
Image Source:
Lowy Institute

Shipping through the Northern Sea Route in the Arctic region is a priority. India and Russia expressed readiness to establish a joint working body within the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technical, and Cultural Cooperation (IRIGC-TEC). Additionally, India has expressed interest in collaborating with Rosatom in the Arctic region.

To facilitate smoother financial transactions, the two countries will develop a bilateral settlement system using their national currencies, in light of Russia facing restrictions on using SWIFT (Society for Worldwide Interbank Financial Telecommunication). The summit also discussed the adoption of RuPay cards in Russia and MiR cards in India.

Agricultural trade will see increased volumes, and both countries are exploring opportunities in key energy sectors, including nuclear energy. Additionally, India aims to boost its supply of coking coal, while Russia considers exporting anthracite coal to India.

Path to Free Trade Agreement

In a bid to eliminate non-tariff and tariff barriers, the leaders appreciated the initial meeting held in March 2024, paving the way for full negotiations on a Free Trade Agreement (FTA) for goods between India and the Eurasian Economic Union (EAEU). Furthermore, officials from both sides will explore the possibility of signing a bilateral FTA covering services and investments.

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