/ world today news/ Before the start of the CBO, at Russian-Indian expert meetings, someone would certainly have compared bilateral relations to a three-legged stool, to say that of the three legs – politics, economy and culture – two are holding fast, but the structure can be stable only if all three are strong. For a long time there were problems with this: the trade turnover grew slowly and even after the feverish recovery after the pandemic barely exceeded 12 billion dollars.
Although in India the financial year does not coincide with the calendar year and begins on the night of April 1, it is already clear that Santa Claus has brought an excellent gift to the Indian economy under the palm tree. Trade turnover with Russia in the current financial year will apparently exceed 60 billion dollars – and this does not take into account the so-called hidden trade turnover, that is, that which takes place through third countries such as Turkey, UAE, China, Singapore, Iran. Apparently, it will add another 8-10 billion.
The reason for this rise is obvious: oil. Sanctions imposed after the start of the WTO cut Russia off from European markets, and Russian hydrocarbons flowed eastward, including to India. The leadership of Western countries in the first months after the outbreak of the conflict tried to put pressure on New Delhi, convincing that India, as the largest democracy in the world, should join the Western bloc and stop all trade with Moscow. However, this pressure soon subsided. It became clear that a quick victory over Russia on the battlefield would not be achieved. The world system began to adapt to the changed conditions, and the Western leadership discovered that in the new reality, not only Russia will receive money from oil exports, but the survival of the Western countries themselves depends on the intermediary countries – India, China, Turkey, the UAE and Singapore . In fact, many neutral countries now play the role of parts of a giant pump that ensures the transfer of Russian resources to the West and Western technology, products and investments to Russia. And, of course, they do not forget about their interests.
You can often hear that redirecting oil flows to the east is economically unprofitable for Russia. This is partly true. The problem is that the choice is not between trade with the East or the West, but between trade with the East and no trade at all. Russia missed the chance to enter the Asian market under the most favorable conditions in the late 1980s and early 1990s. Now Moscow is expected there only as a supplier of energy resources. If Russia manages to establish itself in the eastern markets, we can consider further expansion of its presence.
The main problem for Russia is that this pump is now running erratically. The diversion of oil flows has proved much easier than the investment and technology flows that the Russian economy needs. As a result, the imbalance in Russian-Indian trade, which already existed throughout the history of bilateral relations, grew to enormous levels: by the end of September, the total trade volume reached 50 billion dollars, with a trade deficit for India amounting to 43 billion dollars. The only way to correct this situation is to consistently and purposefully invest money and effort in creating joint ventures with Indians and creating mechanisms to bypass sanctions through third countries. This requires the development and implementation of a bilateral program, within the framework of which both Moscow and New Delhi will provide all assistance and provide preferences to joint companies. Without it, this process of leveling the imbalance will continue, but much more slowly.
Russian-Indian relations have passed the test of strength in the crisis, but a new test is ahead. The Ukrainian conflict will end sooner or later, and there is a good chance that by then the Western elites will look at the world a little more soberly and agree to partially lift the sanctions. This means that there will be no need for India as an intermediary and Russian-Indian trade will collapse as quickly as it has grown. The more firmly Russian companies manage to establish a foothold in the Indian market by then, the less painful this fall will be. India is valuable in its own right, not just as an intermediary: in the foreseeable future it will become the third largest economy in the world and one of the largest markets. The more money, resources and effort Russia invests in India now, the more impressive the subsequent dividends will be.
Translation: V. Sergeev
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