Trade between Russia and India has skyrocketed this year, with the turnover of goods in January-August already surpassing the total for the previous year. According to data from the Indian Ministry of Commerce and Industry, total trade between the two countries in the first eight months of the year reached US$43.8 billion, an all-time high. If that is extended to the year end it would result in a bilateral trade volume of US$65.7 billion.
Exports of Russian goods surged to US$41.2 billion against US$17.1 billion during the same time last year. Russian imports from India reached US$2.6 billion, a 50% increase. Russia is currently among India’s top five trading partners in terms of goods turnover.
The substantial growth in bilateral trade came amid the ‘Pivot to Asia’ Moscow has pursued as a result of the sanctions placed on Russia by the West over the conflict in Ukraine. The loss of traditional Western trade partners has forced Russia to seek out new markets, especially for its energy exports. In September alone, India’s imports of Russian oil surged by 80% year-on-year, to an average of 1.56 million barrels per day (bpd).
India has also increased purchases of Russian diamonds, having bought gems worth US $886.5 million in the reporting period, a 26% year-on-year increase. In contrast, the EU has just banned the import of Russian diamonds, a move that especially impacts major EU diamond processing and sales houses in Belgium. That trade can be expected to relocate to Dubai and Bombay. Russia is one of the world’s largest diamond producers, while cities such as Antwerp used to be one of the global hubs. Belgium dropped to fifth place in global diamond imports in 2022, with just slightly over 10% of the total market, and in the face of the EU ban can be expected to further decline. The trade is now shifting as new wealth creation in Asia begins to impact the trends as opposed to declining wealth in Europe.
India was the world’s largest diamond importing nation in 2022, having imported nearly 22% of all diamonds worldwide that year, based on value. Hong Kong, the UAE, China, and Thailand are also all big buyers of globally available diamonds. None have banned Russian diamond imports.
In terms of Russia’s overall trade with India, Valentina Matvienko, speaker of the Upper House of the Russian Parliament said that “Mutual trade turnover over the past year and a half is an unprecedented story. It has grown five-fold. It used to be about US$10 billion, now it is already closer to US$50 billion. Yet the potential of our countries is much greater; we need to continue to develop it” she said on the sidelines of last week’s G20 Parliamentary Speakers’ Summit (P20) in New Delhi.
She noted that the growth of mutual economic cooperation between the two countries is evident in the energy sector, agriculture, and in IT, while India continues to express an interest in further strengthening trade ties with Russia.
