INDIA AND RUSSIA TO BOOST BILATERAL TRADE TO $100 BILLION BY 2030

TAG: GS 2: INTERNATIONAL RELATIONS

THE CONTEXT: At the 22nd Annual Summit, Indian Prime Minister and Russian President agreed to significantly increase bilateral trade, setting a target of $100 billion by 2030.

EXPLANATION:

• The meeting primarily focused on economic issues and addressed geopolitical concerns, including the ongoing conflict in Ukraine.

Economic and Trade Objectives

• Trade Target
  • India and Russia aim to boost bilateral trade to $100 billion by 2030.
  • This ambitious target reflects the countries’ intention to strengthen economic ties and navigate Western sanctions by utilizing national currencies for trade transactions.
• Current Trade Status
  • Currently, bilateral trade stands at approximately $65 billion, largely driven by India’s imports of discounted Russian crude oil following sanctions imposed by the U.S. and Europe due to the Ukraine conflict.
  • The trade relationship has seen significant growth, with a 66% increase last year and a 20% rise in the first quarter of 2024.

Summit Discussions and Agreements

• Ukraine Conflict
  • The Ukraine war was a critical topic at the summit.
  • The PM expressed his sorrow over civilian casualties and stressed the need for a peaceful resolution.
  • He made a direct plea to the Russian President to expedite the discharge of Indian nationals recruited by the Russian military, with four Indians having lost their lives in the conflict this year.
• Economic Cooperation
  • The leaders agreed on a cooperation statement focusing on nine key areas, including:
    • Elimination of non-tariff barriers
    • Development of a bilateral settlement system using national currencies
    • Streamlining customs procedures
    • Establishing new connectivity routes such as the Chennai-Vladivostok maritime route and the Northern Sea Route
    • Enhancing the International North-South Transport Corridor via Iran
    • Investing in the energy sector, including nuclear energy
    • Promoting infrastructure development and investment
  • Additional Agreements
    • Several Memorandums of Understanding (MoUs) were signed covering:
      • Climate change
      • Polar research
      • Legal arbitration
      • Pharmaceutical certification

Diplomatic and Strategic Development

• PM addressed the Indian diaspora in Russia, announcing the opening of two new consulates in Kazan and Yekaterinburg to better serve the growing community.
• While the summit focused more on economic issues than previous meetings, defence cooperation remains a significant aspect of the India-Russia relationship.
• The leaders discussed delays in defence supplies and committed to exploring more co-production opportunities, such as the India-Russia joint venture for assault rifles.

Geopolitical Reactions

• The summit drew criticism from Ukraine and concerns from the United States.
• The Ukrainian President criticized the Indian PM’s engagement with the Russian President.
• The U.S. State Department expressed worries over India’s ties with Russia.
• In response, the PM highlighted his efforts towards finding a peaceful solution to the Ukraine conflict.

Honours and Invitations

• Russian President awarded Indian PM Russia’s highest civilian honour, the Order of St. Andrew the Apostle.
• The award, announced in 2019, was presented during this summit.
• Russian President invited Indian PM to attend the “Extended BRICS” summit in Kazan in October 2024, which will include five new members to the BRICS grouping of emerging economies.

India-Russia Relations:

• Historical Relations: Since 1947, India and Russia have maintained cordial relations, with Russia supporting India’s economic self-sufficiency through investments in heavy machine-building, mining, energy production, and steel plants.
• 1971 Treaty: In August 1971, India and the Soviet Union signed the Treaty of Peace and Friendship, symbolizing their shared goals and providing a framework for regional and global peace and security.
• Post-Soviet Era Agreements: After the Soviet Union’s dissolution, India and Russia signed a new Treaty of Friendship and Cooperation in January 1993, followed by a bilateral Military-Technical Cooperation agreement in 1994.
• Strategic Partnership: In 2000, India and Russia formed a Strategic Partnership, which was elevated to a “Special and Privileged Strategic Partnership” in 2010.
• Areas of Cooperation: The Indo-Russian strategic relationship encompasses six main components: politics, defense, trade, civil nuclear energy, anti-terrorism cooperation, and space cooperation.
• Cold War and Beyond: India and the Soviet Union had strong strategic, military, economic, and diplomatic ties throughout the Cold War. Post-Soviet Russia continued these close ties, resulting in a Special Strategic Relationship.
• IRIGC: The Indo-Russian Inter-Governmental Commission (IRIGC) handles governmental issues between the two countries.
• International Organizations: Both countries are involved in several international organizations and connectivity projects, including BRICS, SCO, NSG, and UNSC.
• Defense Industry: India is Russia’s second-largest market for defense industry exports. In 2017, Russia supplied nearly 68% of India’s military hardware imports, making it the primary provider of defense equipment.
• 2020 Visit: The Indian Defense Minister visited Russia to prepare for World War II Victory Day in 2020.

SOURCE: https://www.thehindu.com/news/national/india-russia-to-boost-bilateral-trade-to-100-billion-by-2030/article68386101.ece