India and Russia plan to increase their bilateral trade to $100 billion by 2030 by eliminating non-tariff trade barriers, exploring a regional free trade pact and developing a bilateral settlement system using national currencies. Prime Minister Narendra Modi and Russian President Vladimir Putin held the 22nd annual bilateral summit in Moscow on Tuesday.
Bilateral trade stood at over $65 billion in fiscal 2024, with the balance tilted heavily in favour of Moscow. India imported $61 billion worth of goods, mostly crude oil, from Russia last year.
The new trade goals will also include plans to increase supplies of goods from India to achieve balanced bilateral trade.
The rupee-rouble system was initiated following the Russia-Ukraine war—after Moscow was put under sanctions by the US and Europe—where a Russian bank keeps enough rupee deposits to pay off Indian exporters and Indian banks hold rouble to do the same for Russian parties.
PM @narendramodi and President Putin held productive discussions at the Kremlin. Their talks covered ways to diversify India-Russia cooperation in sectors such as trade, defence, agriculture, technology and deepening the people-to-people linkages. pic.twitter.com/R17wwDoDzh
July 9, 2024The two countries have agreed to increase cargo turnover through the launch of new routes of the North-South International Transport Corridor, the Northern Sea Route and the Chennai-Vladivostok Sea Line, according to a joint statement released after the Modi-Putin meeting.
The INSTC is an ambitious 7,200-km-long trade corridor envisioned in 2000 to link Russia's Baltic Sea coast to India's western ports in the Arabian Sea through a network of sea, road and rail routes.
On the other hand, the Northern Sea Route links Russia's Arctic ports that export goods from resource-rich Siberia to northern Pacific, and the Chennai-Vladivostok link plans to extend the supply line from Russia's east coast to India's southern city.
The leaders also agreed to explore possibility of a Eurasian Economic Union-India free trade pact. The EAEU is an economic union of five post-Soviet states namely, Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia.
The countries will further build on their cooperation in key energy sectors, including nuclear energy, oil refining and petrochemicals, and expanded forms of cooperation and partnership in the field of energy infrastructure, technologies and equipment.
Russia is a key source of oil and gas and nuclear fuel for India.
Modi and Putin also agreed to facilitate entry of Indian and Russian companies in each other's markets by creating subsidiaries and industrial clusters.
The other areas of cooperation include medicine, digital economy, science and research and educational exchanges.
The two governments will also look into the possibility of opening branches of Indian medical institutions in Russia and recruiting qualified medical personnel as well as strengthening of coordination in the field of medical and biological safety.
This assumes significance as many Indian students enroll in Russian medical institutes to obtain degrees.
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