Amid Threat of US Tariffs, India Flags Soaring Trade Deficit, Russia Assures Oil Flows
External affairs minister S. Jaishankar interacts with prominent Russian scholars and think tank representatives in Moscow. Photo: X/@DrSJaishankar via PTI.
New Delhi: External affairs minister S. Jaishankar on Wednesday (August 20) pressed Russia to address India's ballooning trade deficit even as Moscow pledged to keep supplying discounted oil despite US tariff threats and said it hoped trilateral talks with India and China would soon resume.
Jaishankar, who is in Moscow to co-chair the 26th session of the Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation, noted that bilateral trade had risen more than five-fold in four years, from $13 billion in 2021 to $ 68 billion in 2024-25, but that India's trade deficit with Russia had widened nearly nine times to $58.9 billion.
'So we need to address that urgently,' he said in his opening remarks.
India's trade with Russia had long remained modest until the Ukraine war, when traditional crude suppliers in West Asia shifted exports toward Europe. India responded by sharply increasing its purchases of discounted Russian oil, driving a surge in overall trade volumes.
Outlining the agenda of the inter-governmental commission, Jaishankar listed the need to remove tariff and non-tariff barriers, ease logistics bottlenecks, expand connectivity projects such as the International North-South Transport Corridor and the Chennai-Vladivostok Corridor, and ensure smooth payment mechanisms.
He also called for the early conclusion of the India-Eurasian Economic Union Free Trade Agreement and closer engagement between businesses to help reach the revised target of growing bilateral trade to $100 billion by 2030.
Russian first deputy prime minister Denis Manturov, who co-chaired the meeting, was quoted by Interfax as saying that shipments of crude, petroleum products and coal to India would continue, while Moscow also saw scope for expanding liquefied natural gas exports.
Manturov added that Russia was seeking deeper cooperation with India in nuclear energy.
In New Delhi, Russian officials echoed that oil supplies to India would remain steady despite Washington's decision to raise tariffs on Indian exports to 50%, half of which the US has linked to Russian crude imports.
Roman Babushkin, the charge d'affaires at the Russian embassy, said Moscow and New Delhi would find ways to overcome the US measures in their 'national interests'.
'I want to highlight that despite the political situation, we can predict … the same level of oil import,' he told reporters.
Deputy trade commissioner Evgeny Griva said discounted prices made Russian oil 'very profitable' for India, with supplies averaging 5%-7% cheaper than other sources. He said Moscow had developed a 'special mechanism' to keep flows uninterrupted and had begun accepting rupee payments after resolving issues that had left billions of dollars stuck in Indian banks.
Babushkin, the second-seniormost Russian diplomat in India, also hoped that with warming ties between New Delhi and Beijing, there would be potential to revive trilateral cooperation with India and China under what it calls a 'greater Eurasian partnership'.
Last month, Indian officials had not been publicly enthusiastic about the push for reviving the Russia-India-China format.
Babushkin noted Russian President Vladimir Putin would visit New Delhi by the end of the year for the annual summit with Prime Minister Narendra Modi. Putin and Modi will also be together in China for the Shanghai Cooperation Organisation summit starting August 31.
This article went live on August twenty-first, two thousand twenty five, at fifty-one minutes past twelve at night.
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