Putin Orders Measures to Reduce Trade Imbalance with India
Russian President Vladimir Putin has directed his officials to devise measures to correct the significant trade imbalance with India, which is largely driven by India's substantial crude oil imports from Russia. Speaking ahead of a December visit to India, Putin suggested that Russia could increase purchases of Indian agricultural products and pharmaceuticals. He emphasized the need to resolve financing, logistics, and payment bottlenecks to unlock the full potential of the bilateral economic partnership between the two strategic allies.
Unpacked:
The imbalance is mainly due to India's large imports of Russian crude oil and other energy products, which far exceed India's exports to Russia. India’s export base is narrow, while Russian exports are diverse and resource-heavy, leading to a persistent trade deficit in Russia’s favor.
Russia could increase imports of Indian pharmaceuticals and agricultural products. These sectors are among India’s main exports to Russia, but currently contribute much less than Russian energy exports, making them key areas for potential growth.
Key challenges include payment bottlenecks due to sanctions, restrictions on financial transactions, and logistical issues such as shipping routes and customs procedures. These barriers hinder smooth trade flows and complicate efforts to increase Indian exports.
Despite a recent decline in Indian exports, overall bilateral trade has grown steadily, reaching record highs in 2024–25. The trade gap persists, but both countries have set ambitious targets to increase trade volume and diversify the partnership.