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Mutually beneficial friendship of India and Russia is getting stronger

Mutually beneficial friendship of India and Russia is getting stronger

The surge of Russia's interest in India is largely connected with the issues of geopolitics. By July 2022, this country is one of the largest players in the world that has not joined the sanctions against Russia.

Back in 2014, the Ministry of Industry and Trade of the Russian Federation announced plans to increase trade and economic turnover between Russia and India to $30 billion by 2025. By the end of 2021, it amounted to $13.5 billion, an increase of almost 50% compared to the pandemic year 2020. This is a lot, but the pace is hardly sufficient to achieve this goal in the remaining 2.5 years. It should be noted that India has not yet entered the top ten key foreign trade partners in Russia. With a share of 1.7% at the end of last year, this country ranks 14th in the overall ranking. Nevertheless, cooperation continues to strengthen.

Thus, the volume of imports of Russian thermal coal to India, according to the Ministry of Industry and Trade of the country, has increased by 2.7 thousand. times up to more than 570 thousand tons. Russian gas supplies are also continuing: India's largest gas transportation company GAIL is not only not going to abandon the annual contract with Gazprom for the supply of 2.5 million tons of LNG, but also plans to increase these volumes. In the future, India may increase the purchase of Russian gold, which the G7 countries refused. While Russia accounts for 9% of the world's production of the yellow metal, India is one of its largest consumers.

Russia continues to be the second largest exporter of weapons and military equipment in the world after the United States with a share of about 19% in 2014-2020, and India remains the largest buyer of such goods from the Russian Federation. From 2017 to 2021, this country accounted for 27.9% of the total volume of supplies, with China in second place with 21.1%, and Egypt in third with 12.6%. However, since 2017, India has been buying less and less weapons from the Russian Federation, but it will be difficult for it to completely abandon it. It's about long-term relationships, and a large amount of already accumulated equipment that needs to be serviced, and relatively low prices.

It should be noted that India is one of the key players in the global pharmaceutical market. The country provides up to 20% of all supplies, covers more than 60% of global demand for vaccines and ranks third in terms of production. In 2020-2021, India exported $600 billion worth of pharmaceuticals to Russia, and cooperation in this area will only strengthen in the coming years. Especially against the background of the situation with a shortage of foreign raw materials used for the production of Russian medicines: India can help with this.

And in the category of food products, Russia is one of the largest consumers of Indian tea, importing up to 45 million kg per year. Coffee and textiles account for a significant share of exports from India to Russia. Rice occupies an important share in trade between the countries — in 2020, almost 60% of all its supplies to the Russian Federation were provided by India. It is quite expected that in the new economic realities, when both countries need access to new markets, the number of product categories in foreign trade turnover will only increase.

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Author: Olga Paramonova

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