Putin orders his govt to address India's trade imbalance concerns

Orders bringing down trade barriers to purchase pharma, agri produce

Russian President Vladimir Putin has instructed his cabinet ministers to explore ways to address New Delhi’s concerns on imbalance in bilateral trade between the two countries. He asked to bring down trade barriers to purchase Indian pharmaceuticals and agricultural produce and increase engagement with India’s private companies.

 

Putin’s instructions to his cabinet are significant as Russia and India are keen to sign a raft of agreements to deepen their cooperation across sectors when the Russian President visits India for the annual India-Russia summit in the first week of December.

 

Prime Minister Narendra Modi is likely to meet US President Donald Trump on the sidelines of the East Asia Summit in Kuala Lumpur later this month. Moscow is keen to convey to New Delhi its commitment towards a deeper Russia-India cooperation to offset the losses the latter is facing, given US’ 25 per cent additional tariff due to New Delhi’s purchase of Russian oil.  

 

 

On Thursday, Putin instructed First Deputy Prime Minister Denis Manturov to "personally" look at expanding trade and economic relations with India to the fullest potential. Manturov, who has served as the industry minister from 2022-2024 and trade minister from 2012 to 2024, has been instructed to resolve issues with India concerning logistics, settlement of payments and eliminating trade imbalances, Russian news agencies TASS, Interfax and RT news channel reported on Friday. 

 

On US tariffs on India, Putin said the Indian people will not tolerate their country being bullied into making a decision that contradicts their national interests and priorities. “(India) will never allow itself to be humiliated by anyone. I know Prime Minister Modi, he will also not make any such decisions,” he said. “The losses faced by India due to punitive US tariffs would be balanced by crude imports from Russia, plus it will gain prestige as a sovereign nation," Putin said.

 

During his visit to Moscow from August 19 to 21, India’s External Affairs Minister, S Jaishankar, had flagged the imbalance in India-Russia bilateral trade, which is heavily tilted in Russia’s favour given India’s purchase of Russian oil. He had co-chaired the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological Cooperation, along with Manturov during the trip. 

 

Jaishankar had also held a meeting with Russian Foreign Minister Sergey Lavrov, where he urged Russia to “swiftly” address non-tariff barriers and regulatory impediments to facilitate more exports from India, especially in sectors like pharmaceuticals, agriculture, and textiles to correct the current imbalance in trade. Russia is India’s fourth-largest trading partner, while India is Russia’s second-largest.

 

On Thursday, at a meeting of the Valdai International Discussion Club, Putin said the current Russia-India bilateral trade falls short of the two countries' potential. “Our trade turnover with India is now around $63 billion. Do you realise what India's [population is]? One and a half billion people, while in Belarus there are 10 million. Our turnover with Belarus is $50 billion and with India [it is] $63 billion. This clearly does not correspond to our potential possibilities,” Putin said.

 

The Russian President spoke of the need to resolve “a whole range of problems” to unlock “our capabilities and potential advantages”. He identified issues related to logistics, and financing, especially processing of payments. The latter, he said, could be done “within the framework of BRICS instruments, it can be done on a bilateral basis, using the Rupee, using the currencies of third countries, using electronic forms of settlement," Putin said. 

The Russian President described Prime Minister Narendra Modi as “a reliable partner for Russia”, and as a “balanced, wise” and “nationally oriented” leader. Putin said he feels comfortable in their trustworthy interactions.

 

Putin also responded positively to a suggestion to set up a Russian-Indian fund for cooperation on technology, cybersecurity and artificial intelligence. However, in working out common projects with India, it is also necessary to focus on relations at the level of businesses, not just intergovernmental ties, he said.

 

"There are certain particulars that come down to the fact that the Indian economy is, foremost, a purely private economy and it develops based on private initiatives. One must even often deal directly with companies there rather than with the state. While the state, basically, just like here, is engaged in regulating these relations,” Putin said. 

The international Valdai discussion forum of security and geopolitical experts from 140 countries, including India, is being held at the Black Sea resort of Sochi.

 

Last month, Russian Deputy PM Dmitry Patrushev, responsible for agriculture related issues, was in India and met the PM on September 25. The two had discussed ways to enhance bilateral cooperation in agriculture, fertilisers, and food processing.