New Delhi: The supply of energy resources—uranium, crude oil and coal—by Russia is extremely “important” for India and a “critical” pillar of ties between New Delhi and Moscow, External Affairs Minister S. Jaishankar said Tuesday.
Addressing the 25th session of the India-Russia Intergovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC), the minister said the two countries would also be discussing cooperation critical for India’s food, energy and health security.
“Russia has emerged as a major source of fertilisers for us. Its supply of crude oil, coal and uranium are indeed important,” he said in the opening remarks at IRIGC-TEC, which the minister co-chaired with Russia’s rirst deputy prime minister, Denis Manturov, in New Delhi.
Jaishankar added that a more substantive relationship between the two countries “has a larger resonance” at the time of “an increasingly multipolar world“. “We welcome and fully reciprocate Russia’s growing interest in exploring economic opportunities in India…The growth in bilateral trade, now estimated to be $66 billion, is impressive,” he said.
Jaishankar added that the two countries “benefit from the trust and confidence built” over the years, which adds to its growing economic partnership, especially after Russia shifted its focus on Asia since the Ukraine war began in 2022.
The IRIGC-TEC is the apex government-to-government forum to discuss bilateral economic cooperation between India and Russia. The forum integrates various inputs from different working groups on trade and economic affairs and is co-chaired by India’s foreign minister and Russia’s deputy prime minister. Its first session was in 1994.
Manturov is in New Delhi for a two-day visit on 11-12 November. On Monday, both Jaishankar and Manturov met with Indian business leaders at the India-Russia business forum in Mumbai. Manturov called on Prime Minister Narendra Modi late Monday evening in New Delhi.
Also Read: US President-elect Trump vows to slash trade deficit with India. How trade fared under him vs Biden
Russian energy supplies to India
Since 2022, Russia has become India’s largest supplier of mineral fuels, including crude oil and coal, as Europe shunned it over the Ukraine conflict. In the 2021-22 financial year, Moscow was the tenth largest supplier of mineral fuels to India, with New Delhi importing $5.25 billion of such fuel.
By the next year, Russia had jumped to the top spot, with its exports to India touching $38.8 billion—639 percent growth—according to data published by the Ministry of Commerce and Industry.
In 2023-24, Russia maintained its top spot, with India importing $54 billion worth of mineral fuels, almost two times higher than its next biggest partner country, Iraq. Between April and August this year, India imported $24 billion worth of mineral fuels.
Jaishankar once commented that New Delhi was waiting for a “thank you” from the world for softening global inflation through its strategic purchases of Russian oil last year.
In 2023-24, Russia also became the only other country to supply uranium to India apart from France. Around $13 million worth of uranium was imported from Russia in that financial year.
Also Read: Trade imbalance, US sanctions, transport corridors likely on agenda at India-Russia talks tomorrow
Trade imbalance & challenges
However, Jaishankar in his opening remarks Tuesday called for trade to be more “balanced”. The two countries have set a goal of reaching $100 billion in bilateral trade by 2030, and last year it touched $65.4 billion.
However, Indian exports of goods to Russia stood at a meagre $4.2 billion, in comparison to its imports, which were $61.1 billion during the same period. This huge trade deficit was driven almost entirely by India’s purchases of mineral fuels from Russia.
“Our goal is that it needs to be more balanced and that will require addressing current constraints and undertaking facilitative efforts. Making it easier, trade should be accompanied by progress in the negotiations of the India-Eurasian Economic Union (EAEU) FTA (Free Trade Agreement),” Jaishankar said.
In March 2024, the two countries began talks for an FTA between the EAEU—a trading bloc consisting of five economies, Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia—and India. India and Russia are also exploring bilateral agreements in services and investments after the annual summit held in July in Moscow.
However, payments and logistics have continued to challenge the growth of trade between India and Russia, according to Jaishankar.
Manturov made a pitch for deepening ties, especially in the areas of nuclear power, digital technologies and space exploration. The Russian first deputy prime minister specifically sought to supply the equipment required for India’s first human-crewed space mission, Gaganyaan.
(Edited by Tikli Basu)
Also Read: India ‘trying to do something’ to resolve both Russia-Ukraine, West Asia conflicts—EAM in Australia