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Energy, grain and fertilizer needs see trade massively expand while Delhi seeks a permanent trade agreement

Yury Ushakov, Russia’s Presidential aide, has stated that trade turnover between India and Russia has more than doubled, with increases of nearly 120% so far this year. He was speaking ahead of the Shanghai Cooperation Organization (SCO) meeting in Samarkand, which starts on Thursday (September 15). President Putin and Indian Prime Minister Narendra Modi will both be at the event and are scheduled to hold bilateral discussions.

“Our relations are actively developing, the trade has also increased significantly with supplies of Russian oil, coal and fertilizers increasing.” Ushakov stated, also mentioning that the two countries are currently working on bilateral measures to expand the use of national currencies, the ruble and the rupee, in mutual settlements.

Moscow and New Delhi have been discussing mutual acceptance of Russia’s Mir and India’s RuPay payment cards, as well as options to implement each other’s interbank transfer services: India’s Unified Payments Interface (UPI) and SPFS, the Russian alternative to SWIFT.

India has been boosting purchases of Russian crude over the past six months, while Washington has repeatedly urged New Delhi to support a price cap on Russian oil. However, India has been reluctant to join the Western sanctions on Moscow, placing domestic energy security above geopolitical conflicts.

Bilateral trade between India and Russia stood at around US$13 billion by the end of 2021, and the countries have set a target of $30 billion by 2025. India has been negotiating a Free Trade Agreement with the Eurasian Economic Union, which includes Russia in addition to Armenia, Belarus, Kazakhstan and Kyrgyzstan. Trade has also been boosted by the development of the INSTC, which connects India to Russia via maritime routes to Iran, transiting Iran overland, and heading to Russia’s Caspian sea ports near Astrakhan.