India and Russia to boost bilateral trade to $100 billion by 2030

India and Russia to boost bilateral trade to $100 billion by 2030

Sub : IR

Sec: Biodiversity

Context:

• India and Russia agreed to increase bilateral trade to $100 billion by 2030 and use national currencies to bypass Western sanctions.
• This decision was made during the 22nd Annual Summit, the first meeting between Modi and Putin since the Ukraine war began.

Details:

• Modi accepted Russia’s highest civilian honour, the Order of St. Andrew the Apostle (announced in 2019, but received now), and was invited to the “Extended BRICS” summit in Kazan in October 2024.
• Putin agreed to expedite the discharge of Indians recruited by the Russian military, although this was not included in the joint statement.
• The joint statement emphasized a peaceful resolution of the Ukraine conflict, appreciating mediation proposals.

Trade Target Achievability:

• The $100 billion trade target is considered achievable, with current trade at around $65 billion due to India’s increased imports of discounted Russian crude oil.
  • Russia-India trade grew by 66% in 2023 and 20% just in the first quarter of 2024.
• This trade level would place India-Russia trade on par with India’s trade with the U.S., China, and the EU.

Cooperation and Economic Vision:

• The leaders agreed on cooperation projects in Russia’s Far East and issued a joint vision statement on trade and economic cooperation.
• The vision covered nine areas including the development of a “bilateral settlement system using national currencies”, ironing out customs procedures and using new connectivity routes, including the Chennai-Vladivostok maritime route and Northern Sea Route and the International North-South Transport Corridor via Iran, investments in the energy sector including nuclear energy, infrastructure development and investment promotion as “priority areas”.
• Several MoUs were signed on climate change, polar research, legal arbitration, and pharmaceutical certification.
• Russia agreed to open two new consulates in Kazan and Yekaterinburg for the Indian diaspora.
• During the 2019 visit, Prime Minister Narendra Modi signed a Memorandum of Intent (MoI) on the ‘Development of Maritime Communications between the Port of Vladivostok and the Port of Chennai’.
• The Vladivostok – Chennai route passes through the Sea of Japan, the South China Sea and Malacca Strait.
• The route will bring down transport time to 12 days, almost a third of what is taken under the existing popular route that covers St Petersburg to Mumbai.
  • The current maritime route, St Petersburg to Mumbai, is said to be an 8,675 nautical mile (16,000 km) one.
  • Against this, the proposed Vladivostok – Chennai route is said to be 5647 nautical miles (10,500 km) long.
• Costs are expected to reduce by 30%.
• Significance of the new route:
  • The new route would also give India access to the Far East, including countries like Mongolia, and the largest presence in the South East Asian region.
  • While export from Russia could include coal, crude oil and LNG, apart from commodities like apples and kiwis.; shipments from India could include construction equipment, construction materials, and pharma, among others.

Source: TH