India-Russia Bilateral Relations have transitioned from a focus on strategic and defense-oriented connections during the Cold War to a more comprehensive partnership today.
India-Russia Bilateral Relations have transitioned from a focus on strategic and defense-oriented connections during the Cold War to a more comprehensive partnership today. This collaboration has been reinforced through defense agreements, energy commerce, nuclear partnerships, and coordination in regional and global forums.
Geoeconomics is defined as the application of economic instruments, including trade, finance, supply chains, and investments, to achieve geopolitical aims and national interests within the realm of international relations. In an increasingly volatile world, geoeconomics serves as a framework for understanding shifts in power influenced by economic interdependence, technological advancements, and geographical factors, as illustrated by the trade tensions between the U.S. and China, as well as disruptions in supply chains. India is strategically adjusting its geoeconomic policies to enhance trade, attract foreign direct investment (FDI), and improve connectivity through international infrastructure projects, thereby aligning its economic development with foreign policy objectives amidst global rivalries. Policies that prioritize domestic consumption and strategic investments are positioning India to effectively navigate the complexities of U.S.-China relations.
The upcoming 2025 summit between Putin and Modi in Delhi is set to reaffirm the strategic partnership between India and Russia, with a focus on energy security, trade growth, and defense cooperation in light of U.S. sanctions and pressures during President Trump's administration.
Geoeconomic Impacts
India and Russia have concluded an economic cooperation agreement extending to 2030, aimed at enhancing bilateral trade beyond the realms of oil and defense, with a focus on diversifying into sectors such as pharmaceuticals, automobiles, agriculture, and marine products. President Putin has committed to ensuring a steady supply of Russian fuel to India, countering U.S. sanctions that affect Moscow's energy exports related to the situation in Ukraine, while also addressing India's significant trade deficit (with imports totalling $63.8 billion compared to exports of $4.9 billion). These initiatives are expected to improve India's energy affordability and provide greater market access for its enterprises, potentially facilitating job creation despite the challenges posed by sanctions on payment processes.
Geopolitical Impacts
The summit highlights India's strategic independence, as it navigates its relationships with Russia while facing pressures from the United States, Europe, and China. Russia backs India's bid for a permanent seat on the UN Security Council and fosters collaboration within BRICS, the Shanghai Cooperation Organization (SCO), and Arctic initiatives, while India utilizes its partnership with Russia to counterbalance China's influence in Eurasia. The discussions progressed on defense agreements, including the S-400 systems and potential acquisition of Su-57 jets, indicating a decrease in Moscow's isolation and affirming New Delhi's autonomous foreign policy.
Russia's commitment to providing uninterrupted fuel supplies to India, revealed during the December 2025 summit between Putin and Modi, enhances India's energy security by guaranteeing consistent access to discounted Russian oil, gas, and coal, especially in light of US sanctions and tariffs that pressure New Delhi to limit imports. This assurance mitigates the impact of recent US sanctions on Russian companies such as Rosneft and Lukoil, ensuring that Russia remains a vital supplier—accounting for approximately 36% of India's crude imports in 2024, which translates to around 1.8 million barrels per day. Given that India relies on imports for 89% of its annual crude requirement of 265.7 million metric tonnes, dependable Russian supplies are crucial in preventing shortages for its rapidly expanding economy and refineries. Collaborative projects like the expansions of the Kudankulam nuclear power plant further enhance the diversification of secure and clean energy sources. Historically, discounted Russian crude has been priced $2-30 per barrel below market rates, resulting in savings of approximately $7 billion annually for India, which stabilizes domestic fuel prices despite global fluctuations and aids in controlling inflation. This commitment continues to support these savings by emphasising non-sanctioned supplies and facilitating payments in rupees and rubles, thereby alleviating the financial burden of US tariffs, which can reach 50%, on energy procurement. Nevertheless, persistent sanctions may limit the discounts available, potentially leading to increased retail prices if alternative sources become more expensive. The Programme for the Development of Strategic Areas of India-Russia Economic Cooperation until 2030 aims to boost bilateral trade to $100 billion by diversifying beyond energy and fostering balanced exchanges; while also addressing tariffs, logistics, and payment methods through the use of national currencies.
Emerging Opportunities
Machinery, electronics, automotive components, textiles, and electric vehicles present significant export potential for India, capitalizing on Russian demand for industrial products and materials. The collaboration in space (ISRO-Roscosmos), artificial intelligence, startups, and workforce mobility in the Far East further enhances technological and labour synergies. These industries are in line with India's goal of self-reliance and Russia's shift towards Asia in the context of sanctions. Consequently, Putin’s visit aimed to strengthen bilateral relations, tackle existing challenges, and establish a framework for future cooperation in defense, energy, trade, and connectivity, all while managing global geopolitical pressures.
Prof. M.K.Sinha,
Professor of Economics,
Nagaland University, Lumami.