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24th Russia-India Inter-Governmental Commission (IGC) Meeting

Context:

Recently, Russia’s Deputy Prime Minister has attended the 24th Russia-India Inter-Governmental Commission (IGC) meeting in India.

Relevance:

GS II: International Relations

Dimensions of the Article:

  1. Key Highlights of the Meeting between India and Russia
  2. Status of India-Russia Trade Ties and Related Concerns

Key Highlights of the Meeting between India and Russia

India and Russia held discussions on various bilateral issues, including defense cooperation, trade, and economic ties. The key highlights of the meeting are:

  • Russia expressed interest in importing manufacturing equipment, including machinery, from India to replace those of Western origin.
  • Both countries reviewed the defense cooperation between India and Russia, which has been facing challenges related to deliveries and payments due to the ongoing war in Ukraine.
  • India discussed its plans for Russia’s far eastern region, which is an essential part of Russia’s strategy in the Indo-Pacific region.
  • The two sides discussed bilateral trade efforts and the identification of new industrial points that would provide additional impetus for trade between the two countries.
  • There was a discussion on the balance of trade, which currently tilts in favor of Russia, and ways to bring more balance in trade relations.
  • Discussions covered many areas of mutual interest, including those related to technology, energy, healthcare, and education, highlighting the need for bilateral cooperation in these sectors.

Status of India-Russia Trade Ties and Related Concerns

India’s bilateral trade with Russia has been growing steadily over the years, but concerns related to trade balance persist. The current status of India-Russia trade ties is as follows:

  • India’s total bilateral trade with Russia stood at ~USD 13 Billion in 2021-22 and USD 8.14 Billion in 2020-21.
  • Russia is India’s seventh biggest trading partner, up from 25th position in 2021.
  • The US, China, UAE, Saudi Arabia, Iraq, and Indonesia were the six countries that recorded higher volumes of trade with India during the first five months of 2022-23.
  • India’s Imports from Russia accounted for USD 17.23 Billion, while India’s exports to Moscow were only worth USD 992.73 million, resulting in a negative trade balance of USD 16.24 Billion in 2020-21.
  • Russia’s share in India’s total trade has increased to 3.54%, up from 1.27% in 2021-22.
  • The sudden jump in imports from Russia, mainly oil and fertilizers, which began to surge earlier in 2022, is the main driver behind this increase in bilateral trade.
  • Petroleum oil and other fuel items accounted for 84% of India’s total imports from Russia, while Fertilizers were second.
  • Together, fertilizers and fuel accounted for over 91% of the total imports from Russia this year.
Concerns
  • India-Russia trade ties primarily stem from the trade imbalance, which has been in favor of Russia for many years.
  • India has been importing a lot of oil and gas from Russia, which has contributed significantly to the trade deficit. However, efforts are being made to address this issue, and both countries are exploring ways to increase trade and promote balance.

-Source: The Hindu


February 2024
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