India and Russia are currently in talks over a free trade agreement that will deepen the bilateral commercial ties between the two countries. India's Foreign Minister, S. Jaishankar, stated that his government is in an "advance agreement" on the proposed treaty. Meanwhile, Russia's Trade and Industry Minister, Denis Manturov, emphasized that the agreement will bring a guarantee of bilateral investment.
The potential trade deal comes as Moscow displaced Iraq to become India's top supplier of crude oil last month. Overall Indian imports from Russia increased almost fourfold to $46.33 billion in the year to March 31. Furthermore, Russia is looking to increase machinery imports from India to improve the trade balance. In return, India aims to narrow its growing trade deficit with Russia, which has been India's largest supplier of military equipment for decades and is the fourth-largest market for Indian pharmaceuticals. The potential trade agreement could further boost the commercial relationship between the two countries and benefit Indian businesses with access to Russian technology.
The trade agreement negotiations suggest that India is not explicitly criticizing Russia's invasion of Ukraine and instead prefers to call for a peaceful resolution through dialogue. While Russia has been traditionally supplying defense equipment, it is now seeking to import more than 500 products from India for key sectors including cars, aircraft, and trains. It remains to be seen what specific agreements the two countries will reach, but the proposed free trade agreement could pave the way for greater economic cooperation and partnership between India and Russia.
