Russia, India Want To Increase Bilateral Trade To US$30 Billion In Next Five Years

Opportunities for Russian investors in India

Russia and India have stated a goal to diversify and deepen bilateral economic ties in priority sectors to meet the bilateral trade target of USD 30 billion by 2025, the Indian Ministry of Commerce has stated. Russia’s Deputy Prime Minister Yuri Trutnev and Indian Commerce and Industry Minister Piyush Goyal made the pledge during a meeting in Vladivostok.

The ministry said in a statement that a number of MoUs were signed between regions of the Russian Far East and five states of India to expand and strengthen cooperation in the areas of trade, economy, investment, scientific and technical cooperation. An MoU was also signed between Amity University and Russia’s Far East Federal University to enhance relations and develop academic and cultural exchange in areas of education and research, while agreements were also concluded on the establishment of the representative offices and the Pushkin Centre for Russian Language and cultural studies. Chief ministers of four Indian states sought investments and collaboration in the field of energy, agriculture and food-processing.

Gujarat Chief Minister Vijay Rupani talked about possibilities of collaboration in gold and diamond mining, which has already seen Indian investment in the form of gold mining in Russia’s Klyuchevskoye Mines and participation in the Eurasian Diamond Exchange,  also based in Vladivostok. Last year, bilateral trade between the two countries stood at USD 8.3 billion.

There is plenty of opportunity for Russian businesses in India, and it is understood that Moscow and Delhi are also engaged with negotiations over a Free Trade Deal with the Eurasian Economic Union. At present, Russian’s are present in India mainly in the form of small traders, however the country is also attractive to Russian investment funds as there remains a great deal of private wealth in India. Meanwhile, India is growing at a rate of some 5.8% per annum, and has a middle class market size of about 400 million. With an abundance of Free Trade and Development Zones around its coast, including proposals to deal exclusively with Russia manufacturers.

These, coupled with low wages make India an attractive proposition for Russian companies looking to combine Russian component parts with cheaper Indian production. Finished products can then be sold either onto the domestic India, Russia and global markets.