Imports from Russia increased fivefold to $32.9 billion between April and December, making it India’s fourth-largest trading partner.
Crude oil and fertilisers are the two key factors behind India’s rising imports from Russia. The West imposed sanctions on Moscow after the Russia-Ukraine conflict erupted, reducing its trading opportunities.
India negotiated a crude oil contract with Russia, seeing this as an opportunity to promote the sale of petrol and diesel to nations like the Netherlands and Brazil. Riding the crude trade, Russia surpassed China to rank as India’s 20th largest source of imports in the most recent fiscal year.
If the current rate of growth continues, Russia’s imports may reach $50 billion, falling just short of the number of products exported from the US, which is India’s third-largest source of imports.
By providing discounts below the going rate on the world market, Russia has for the first time become India’s largest fertiliser supplier in the first half of FY23. In the first half of the year, which began on April 1, India’s imports of fertiliser from Russia increased 371% to a record 2.15 million tonnes, citing an anonymous senior government source.
India is attempting to promote trading in local currencies in light of increased bilateral trade. Since the Russia-Ukraine crisis started in February of last year, India and Russia have been looking into a rupee trade settlement mechanism. However, the nations have not yet formalised the rules.
According to New Delhi-based officials, India is also looking to increase its exports of electronic goods to Russia.