India And Pakistan Look To Enhance Russia Trade Despite The West’s Sanctions
Ignoring what in Asia is generally seen as a US / European conflict, both India and Pakistan are finding ways to develop bilateral trade with Russia. Both are keen to continue Free Trade negotiations with the Eurasian Economic Union, which includes Russia as well as Armenia, Belarus, Kazakhstan, and Kyrgyzstan.
India is actively looking at non-US dollar payments for continuing and developing Russian trade, including mechanisms it uses to trade and settle payments with Iran. Third country banks are used for this purpose. Another option under consideration is the mechanism used to repay Russian debt through a rupee auction held by the Russian central bank. The repayment is made through the export of identified commodities and services.
The United States has threatened to sanction India, which has caused uproar in certain Indian political circles who see as it an infringement on a sovereign, elected democratic independent right to choose with whom it wishes to trade.
Russia-India bilateral trade is currently about US$10 billion with plans to increase this to US$30 billion by 2025.
Pakistan meanwhile has signed a major agreement with Russia on the import of natural gas and wheat, according to Pakistani Prime Minister Imran Khan, who met with Putin in Moscow ten days ago.
Khan reportedly said that he and Russian President Vladimir Putin had “great discussions” during his visit to Moscow last week, where the leaders signed a bilateral agreement. He noted that Pakistan plans to import some two million tons of wheat from Russia in the near future.
The two leaders reportedly also discussed the long-delayed Pakistan Stream gas pipeline, which is to be built in collaboration with Russian companies.
“Both countries are eager to launch the project at the earliest,” according to Pakistan’s Energy Ministry. The 1,100km (683-mile) pipeline connecting Russia and Pakistan was agreed in 2015. It is to be financed by both Moscow and Islamabad, and to be constructed by Russian contractors.
Russia-Pakistan trade is relatively small, with Pakistan exporting US$277 million of goods in 2019, and Russia exporting US$178 million to Pakistan. Most Russian trade is in lentils, newsprint, and carbon, while Pakistan exports citrus and leather.
India, Pakistan, and Russia are all members of the Shanghai Cooperation Organisation, which also includes China and several other Central Asian nations. The SCO’s main function is as a regional security body, however it also has a trade facilitation remit and encourages regional multilateral trade as part of its agenda.
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