Will India-Russia achieve $100 Billion trade by 2030? Jaishankar optimistic amid challenges

New Delhi: India is poised to reach a significant trade milestone with Russia, aiming for a $100 billion commerce target well before 2030, according to External Affairs Minister S. Jaishankar. Jaishankar, who co-chaired a meeting with Russia’s First Deputy Prime Minister Denis Manturov, expressed confidence that the two countries would surpass this target as their economic ties continue to strengthen. The ambitious goal is supported by the growing complementary nature of their economies and a longstanding relationship built on trust.

Challenges in Balancing Trade Imbalance

Despite the positive growth in bilateral trade, Jaishankar acknowledged the trade imbalance between the two nations. India has accumulated a trade deficit of nearly $57 billion, primarily due to the large-scale purchase of Russian crude oil since 2022. He emphasized the need for further efforts to ensure the trade balance is addressed, and that trade facilitation measures are enhanced, particularly with respect to payments and logistics.

“We are making perceptible progress in addressing trade challenges, but there is still work to be done,” Jaishankar said during his opening remarks at the Intergovernmental Commission on Trade, Economic, Scientific, Technical and Cultural Cooperation (IGC-TEC) meeting. Jaishankar suggested that trade facilitation should be accompanied by progress in negotiations on the India-Eurasian Economic Union Free Trade Agreement (FTA), which could help resolve existing constraints.

Positive Growth and Diversification in Trade

Trade between India and Russia has experienced remarkable growth in recent years, with the total value of bilateral commerce now estimated at $66 billion. Manturov pointed out that the trade had increased by 9% during the first eight months of 2024, and that India is now Russia’s second-largest trade partner, a significant achievement. The trade basket, which includes agricultural products, industrial equipment, and pharmaceuticals, is expected to expand further as both countries work to diversify their economic cooperation.

Cooperation in Key Sectors and Future Plans

The two countries are committed to reducing the trade imbalance and expanding their trade relationship beyond energy and crude oil. In addition to a proposed FTA with the Eurasian Economic Union, Russia has expressed its commitment to bilateral agreements on services and investments, which are essential for long-term economic collaboration.

The expansion of trade settlements in local and alternative currencies is nearing 90%, and further efforts are being made to increase banking cooperation between the two nations. Additionally, Russia is keen to expand direct flight options between the countries, with Aeroflot currently operating flights from Moscow and Ekaterinburg to New Delhi and Goa.

Strategic Cooperation for 2030 and Beyond

In their meeting, Jaishankar and Manturov emphasized the need for 14 working groups and six sub-groups under the IGC-TEC to expedite the finalization of the economic cooperation program for 2030. The two leaders directed these groups to enhance market access and accelerate efforts to meet the $100 billion trade target. Key sectors under discussion include hydrocarbons, nuclear energy, agriculture, IT, healthcare, and education, as both nations look to strengthen their bilateral ties in these critical areas.