Russia has sent India a list of over 500 products ranging from raw materials for paper industries, to metallurgical items, to aircraft and train parts for potential delivery, as Western sanctions imposed on the country due to the ongoing conflict with Ukraine limit its capacities to keep vital industries running.
Demands were made by Russia’s Ministry of Industry and Trade weeks before India Foreign Minister Subrahmanyam Jaishankar’s visit to Moscow starting Nov 7. While India did not immediately respond to the requests, during the visit Jaishankar had said that India needed to boost exports to Russia to balance the bilateral trade that is currently tilted towards Russia. This is owing to the country being India’s largest supplier of military equipment at the moment.
As per reports, further discussion is yet to be done to agree to the specifications and volumes of the products requested. Moreover, Russia’s outreach is not limited to India.
The list of items from Russia, which runs to nearly 14 pages, includes car engine parts, parts for aircrafts and helicopters, raw materials for paper industries, and nearly 200 metallurgy items, as the industries face acute shortage amid sanctions.
India’s take on trade with Russia:
While an Indian govt source has maintained that the request was unusual in its context, India is eager to rebalance trade and narrow the growing trade deficit with Russia.
As of yet, the PM Modi-led Indian Govt has not joined the West in openly criticizing Moscow for the war in Ukraine, and has instead increased purchases of Russian oil that have cushioned it from the impact of the sanctions to an extent.
Indian imports from Russia have grown nearly five times to $29 billion between Feb. 24 and Nov. 20 compared with $6 billion in the same period a year ago. Exports, meanwhile, have fallen to $1.9 billion from $2.4 billion.
With Russia’s list of requests, India is now positive about hoping to boost its exports to nearly $10 billion over the coming months.
However, there is reluctance among Indian companies to export to Russia over fears of falling foul of sanctions by the West, especially given the lack of clarity over payments and challenges to securing insurance.
Large Indian lenders are hesitant to process direct rupee trade transactions with Russia, months after the mechanism was put in place, over the fear of sanctions.