Beyond Diplomacy: The Economic Reality of India-Russia's $100 Billion Ambition

The world watched as Vladimir Putin visited India. Narendra Modi was particularly excited as the two countries signed deals spreading across defence, trade, healthcare, civil nuclear energy, and labour cooperation. How much of this bonhomie will translate into trade figures, particularly in achieving the much-touted goal of reaching $100 billion by 2030 in bilateral trade between these two trusted allies?

While $100 billion trade by 2030 may be an ambitious target, what may really happen is a significant reduction in India’s import of Russian oil after the recent US sanctions. This may actually lead to a considerable fall in bilateral trade in the near term. Subsequently, India-Russia trade will have to be rebuilt on a more sustainable footing outside of the oil trade. That is a stark reality that the two sides would have discussed. 

India-Russia economic ties emphasise inter-industry trade, in which India exports labour-intensive manufactures like pharmaceuticals, chemicals, iron & steel, vegetable and marine products, while importing Russia's capital- and resource-intensive goods such as crude oil, fertilisers, coal, and defence items.

Bilateral trade between Russia and India reached a record $68.7 billion in 2024-25, a sevenfold increase over five years, driven primarily by India's surging imports of discounted Russian crude oil, coal, fertilisers, and defence equipment. Russian exports to India dominated at around $65 billion in 2024, while Indian exports, including pharmaceuticals, engineering goods, electronics, and chemicals, totalled about $4.9 billion.

According to research by the Global Trade Research Initiative, India has never been able to export to Russia to its full potential. India’s share in Russian food, processed foods, tobacco, chemicals, and fast-moving consumer goods remains under 5%. Pharmaceuticals are India's strongest Russian export, but they capture only 3.5% of a $11.8 billion market. India’s presence is also limited in textiles, apparel, metals, machinery, and electrical equipment, with exports representing about 3-4% of Russia’s imports in these categories. 

In 2024, India exported $434.4 billion worldwide, with the main destinations being the United States (18.3%), the European Union (17.8%), and the United Arab Emirates (8.5%). Valued at $4.84 billion, exports to Russian Federation accounted for 1.1%.

On the other hand, India’s import data from Russia painted a different picture. In 2024, India imported $656.8 billion from the world, the top sources being China (18.5%), the Russian Federation (10.2%), and the UAE (8.5%).

The trade surplus in 2025 between Russia and India in Russia's favour stood at a mammoth $60 billion. This is in contrast to China, where Russia’s trade surplus with China stands at a much lower $12 billion. Most of India’s burgeoning deficit is explained by increased oil imports from Russia. India's Russian oil imports have surged dramatically since 2021, transforming the bilateral energy relationship. Before Russia invaded Ukraine in February 2022, India purchased minimal Russian crude, accounting for less than 2% of its oil imports. However, steep Western discounts on Russian oil prompted a strategic shift. By 2023, Russia had become India's largest oil supplier, with imports exceeding 1.6 million barrels per day—nearly 40% of India's total crude purchases.

But that is now going to change. With steep US sanctions and the threat of a worsening trade relationship with Western European nations, India cut its oil imports from Russia by 38% in value terms and 31% in volume terms in October 2025, compared with last year. And all this means the value of trade that India and Russia are aiming for is likely to fall dramatically in the coming years unless India, like its Chinese counterparts, has something tangible to offer, such as tradable manufacturing goods.

Comparing the trade figures between Russia and China looks more organic and likely to be sustained. Russia-China trade, far larger in scale, stood at $106.5 billion in the first half of 2025, with Russian exports (mainly oil, gas, and minerals) at $59.3 billion and Chinese exports (machinery, electronics, and dual-use goods) at $47.2 billion. China accounts for about 30-48% of Russia's total trade, making it Moscow's top partner, though early 2025 saw declines due to falling hydrocarbon prices and specific category slumps. Payments occur mostly in national currencies, reflecting de-dollarisation efforts.

In 2024, China exported $3,576.5 billion worldwide, the main destinations being the US (14.7%), the EU (14.4%), and Hong Kong (8.1%). Valued at $115.28 billion, exports to the Russian Federation accounted for 3.2%. Imports from the Russian Federation account for 5.0% of China’s total imports. In 2024, China imported $2585.1 billion from the world, the top sources being the EU  (10.4%), Other Asia, (8.4%), and Republic of Korea (7.0%).

Economically, India can sustain its trade momentum with Russia by establishing itself as an equal trade partner, much like China has done. India has a comparative advantage in services. Over the last five years, the surplus from the services sector trade has outweighed India’s merchandise trade deficit. The median age of the Indian population is 28 years, compared to the Russian median age of 41 years. There is an urgent need for skilled Indian labour across the medical, paramedical, engineering, and IT sectors. The other areas are India’s low-cost space research programs and tourism. Although the government has launched the Production Linked Incentive scheme to boost manufacturing competitiveness through policy, there is still a need to create a single-window clearance system, reduce domestic taxes such as coal cess, and lower water and electricity bills for domestic exporters.