India–Russia Trade Imbalance: Jaishankar Calls for Urgent Corrective Measures

India and Russia’s trade relationship has grown significantly in recent years, driven largely by discounted Russian crude oil sales to India following Western sanctions. According to External Affairs Minister S. Jaishankar, bilateral goods trade has expanded more than fivefold in just four years, rising from about $13 billion in 2021 to $68 billion in 2024–25. While this surge reflects growing engagement between the two countries, it has also created an unsustainable gap. The trade imbalance has widened nearly ninefold, from $6.6 billion to $58.9 billion.

Speaking at the 26th session of the India–Russia Inter-Governmental Commission in Moscow, Jaishankar stressed that this imbalance is “a matter of urgent concern” and must be corrected for the long-term stability of the partnership.

External Affairs Minister S Jaishankar address the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) in Moscow on Wednesday. ANI | Firstpost

Russia’s Oil Exports Redefining India’s Trade Map

The deficit has been shaped primarily by India’s dependence on Russian oil, which quickly rose after Moscow began offering steep discounts amid sanctions from the West. This shift redrew India’s energy map, with Russia emerging as the top supplier, displacing traditional Middle Eastern exporters.

While Indian refiners such as Reliance Industries and Indian Oil have benefitted enormously from discounted imports—reportedly saving billions of dollars—Jaishankar warned that over-reliance on a single commodity risks distorting bilateral trade. He noted that India must now push for diversification by increasing its own exports to Russia in pharmaceuticals, agriculture, textiles, and marine products.

Strengthening Trade Infrastructure and Financial Channels

Jaishankar outlined several measures to bridge the imbalance. Among them are the removal of tariff and non-tariff barriers that restrict Indian exports, the modernization of payment systems to smoothen transactions, and the expansion of logistics and connectivity projects. The International North-South Transport Corridor (INSTC), the Northern Sea Route, and the Chennai–Vladivostok maritime link were highlighted as vital infrastructure to strengthen economic integration.

A major development during the visit was the signing of the Terms of Reference between India and the Eurasian Economic Union (EAEU), paving the way for Free Trade Agreement negotiations. Such an agreement could open new opportunities for Indian goods in Russia and its neighboring markets, potentially balancing trade in the long run.

U.S. Tariffs and Global Diplomatic Tensions

India’s efforts to stabilize its partnership with Russia come against the backdrop of deteriorating ties with the United States. Washington has sharply increased tariffs on Indian goods—raising duties on many products to as high as 50%—and imposed penalties specifically aimed at India’s import of Russian crude. This has added another layer of strain to India’s foreign policy, as it balances its strategic autonomy against competing global pressures.

Jaishankar pushed back strongly against U.S. criticism, pointing out that India also buys oil from the United States itself, in addition to other suppliers, as part of its energy diversification strategy. “We are very perplexed at the logic of the argument,” he remarked, noting that India has consistently sought stable energy markets in the face of global disruptions.

The Road Ahead: A Balancing Act

Despite these challenges, India and Russia remain committed to strengthening their “Special and Privileged Strategic Partnership.” Both countries have reaffirmed their shared target of achieving $100 billion in bilateral trade by 2030, a goal that will require structural reforms, expanded Indian exports, and greater business-to-business engagement.

At the same time, India is actively exploring new energy partnerships beyond Russia and the Middle East, including suppliers from the United States, West Africa, Brazil, and Guyana, to ensure energy security. This strategy reflects New Delhi’s broader goal of balancing strong relations with Moscow while maintaining flexibility in an increasingly polarized global landscape.

Conclusion

The India–Russia trade boom underscores both opportunity and vulnerability. While discounted Russian oil has eased India’s energy costs and supported domestic stability, it has also created a dangerously one-sided trade relationship. By pressing for diversification, strengthening trade infrastructure, and pursuing a Free Trade Agreement with the EAEU, New Delhi is working to correct the imbalance. However, the road ahead will require careful navigation, as India faces simultaneous pressure from its Western partners and the necessity of preserving its long-standing ties with Russia.

(Sources: Moneycontrol, Firstpost, India Today)