Amid reports of a proposed truce between Russia and Ukraine in the ongoing Black Sea conflict, Indian government sources indicate that easing tensions could facilitate smoother exports to the Commonwealth of Independent States (CIS).
This development is expected to improve trade routes and reduce logistical disruptions for Indian exporters.
The CIS, apart from Russia, includes Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, Tajikistan, Azerbaijan, Belarus, Armenia, and Moldova.
India exports a range of goods to these nations, including gems and jewellery, cotton, coffee, tea, tobacco, machinery, plastic products, transport equipment, and pharmaceuticals.
The prolonged war has already impacted Indian trade, particularly in key commodities. Russia, which supplies 30 per cent of raw diamonds to India, has seen its trade with India affected due to its exit from the G7 and economic sanctions.
Government sources suggest that the decline in India’s merchandise exports is more attributable to pricing factors rather than a decrease in trade volume. Lower prices of petroleum products and the reduced availability of raw diamonds have significantly impacted export values.
In a separate trade development, India is also reviewing its Free Trade Agreement (FTA) with South Korea. The country is pushing for lower duties on 15 to 20 products, including shrimp exports.
India and South Korea already share a Comprehensive Economic Partnership Agreement (CEPA), which is currently under revision.
India’s trade deficit with South Korea remains a concern, with exports worth USD 6.41 billion in FY 2023-24 against imports of USD 21.13 billion. As trade negotiations continue, India aims to bridge this gap and enhance market access for its exporters in the region.