India’s relationship with Russia crossed a new milestone as both countries agreed to deepen and expand their trade ties beyond oil and defence. Russian President Vladimir Putin was in Delhi for two days, December 4 and 5, for the 23rd India-Russia Annual Summit. It was the first official trip of the Russian President to New Delhi since the Russia-Ukraine war began in February 2022.
India and Russia signed several key agreements, including trade, energy and technology, on Friday, December 5, that are expected to have a significant medium to long-term impact on the Indian economy. Both countries have agreed to increase their trade to $100 billion by the end of the decade.
“The summit outcomes demonstrate a renewed push to widen the strategic, economic, and high-technology dimensions of the India–Russia partnership, with the potential to reshape supply chains, deepen defence cooperation, and significantly expand India’s export footprint over the coming decade,” said Sugandha Sachdeva, Founder of SS WealthStreet.
Key takeaways from Putin’s India visit
1. Trade and economic partnership: Prime Minister Narendra Modi and the Russian President reaffirmed their shared ambition to expand bilateral trade between the two countries in a balanced and sustainable manner. They agreed to increase India’s exports to Russia, strengthening industrial cooperation, forging new technological and investment partnerships, especially in advanced high-technology areas and finding new avenues and forms of cooperation.
They welcomed the adoption of the Programme for the Development of Strategic Areas of India – Russia Economic Cooperation till 2030 (Programme 2030).
2. Energy partnership: Putin assured India of “uninterrupted shipments” of fuel. New Delhi and Moscow discussed and commended their wide-ranging cooperation in the energy sector as a significant pillar of their strategic partnership.
3. Defence ties: India and Russia have agreed to promote joint manufacturing in India of spare parts, components and other items needed to maintain Russian-made defence equipment. This will be done through technology transfer and joint ventures under the Make-in-India programme, to meet the needs of the Indian Armed Forces and to export to friendly third countries.
4. Nuclear energy collaboration: Both sides discussed the possibility of building a second nuclear power plant in India with Russian-designed reactors.
5. New fertiliser plant: According to a PTI report, RCF, IPL, and NFL signed an MoU with Russia’s Uralchem to set up a greenfield urea plant with an estimated investment of $1.2 billion.
Can India-Russia agreements mitigate US tariff pain?
The 23rd India-Russia Annual Summit took place at a time when India faces a 50% tariff burden on its imports to the US. President Donald Trump has imposed punitive tariffs on Indian goods due to New Delhi’s purchase of Russian oil.
Experts underscore that the India-Russian agreements are significant positives for the economy in the medium to long term. However, an India-US trade deal remains a key factor to curb the country’s trade deficit and the rupee’s slide.
“The agreement on a ‘Program for Economic Cooperation’ aiming at $100 billion trade by 2030, appears optimistic. Key agreements in several areas open up opportunities to boost trade. The removal of non-tariff barriers to trade is a welcome move. However, there are hurdles like a lack of a proper rupee-rouble settlement system. Russian banks shut out of SWIFT is another hurdle,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments, observed.
Vijayakumar believes even though India has the potential to boost exports of pharmaceuticals, agricultural products, marine products and textiles, the practical financial hurdles have to be resolved if the agreement is to succeed in practice.
“Russia-India agreements are good, but they can’t compensate for trade issues with the US. A fair India-U.S. trade deal is a must for addressing India’s trade deficit and currency depreciation,” said Vijayakumar.
However, it must be noted that the India-Russia relationship is now moving beyond its traditional pillars of energy and defence.
Manoranjan Sharma, Chief Economist, Infomerics Ratings, pointed out that new areas of cooperation, viz., fertilisers, critical minerals, maritime logistics, nuclear and space technologies, shipbuilding, agriculture, health, and fisheries, carry high potential for India’s “Make in India” goals, industrial development, and export diversification.
Joint work in critical minerals and nuclear energy can enhance India’s energy security and support future clean-energy and high-technology industries.
Sharma underscored that the progress on rupee–ruble settlements and the prospect of a Free Trade Agreement (FTA) with the Eurasian Economic Union (EAEU) may reduce dependence on dollar-based transactions, lower forex risks, and streamline trade flows.
Sharma believes these developments could partially cushion India from disruptions such as US tariffs, although with important limitations. They will not fully offset the scale of India’s economic engagement with the US.
Sharma underscored that American markets remain central to several labour-intensive Indian sectors. Moreover, Russian demand cannot substitute for all categories of Indian exports, and sanctions-related risks—shipping, insurance, finance, supply chains—may constrain the full potential of bilateral trade.
“Structural asymmetries in Indo-Russia trade mean that not all goods affected by US tariffs can find equivalent markets in Russia or the EAEU. In the long term, however, the deepening India–Russia partnership can yield significant strategic and economic dividends,” said Sharma.
“The real benefits will materialise only if India can scale up its exports to Russia and the EAEU, enhance domestic manufacturing capabilities, boost competitiveness, and adapt effectively to global supply-chain shifts,” Sharma said.
G Chokkalingam, the founder and head of research at Equinomics Research Private Limited, believes such bilateral agreements can mitigate risk arising from the US trade war against India to a limited extent.
Chokkalingam believes strengthening India’s relationships with Russia could possibly force the US to rethink its aggressive stance on its trade with India.
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