A $60-Billion Milestone with a Warning
India-Russia merchandise trade has crossed an unprecedented level, touching nearly $60 billion in 2025–26, but the achievement comes with a serious imbalance. External Affairs Minister S. Jaishankar, addressing the 27th India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation in Moscow, stressed that correcting the widening trade deficit is now among New Delhi’s foremost priorities.
Trade Surge, But Deficit Rises Sharply
The scale of growth is striking. Bilateral goods trade has increased more than fourfold from around $13 billion in 2021–22 to nearly $60 billion in 2025–26. Yet India’s trade deficit with Russia has simultaneously widened from approximately $6.6 billion to more than $50 billion.
The numbers reveal the underlying problem: Russian exports to India have expanded dramatically, while Indian exports have not kept pace. Consequently, the headline growth in bilateral commerce does not yet represent a genuinely reciprocal economic relationship.
Energy Security Drives the Expansion
The principal reason behind this surge has been India’s large-scale purchase of Russian crude following the Russia-Ukraine conflict and the resulting transformation of global energy markets. Russian supplies of fertilisers and other commodities have also become increasingly important.
These imports have delivered clear strategic benefits—diversifying India’s energy sources, supporting domestic fuel security and ensuring access to critical agricultural inputs. During Jaishankar’s Moscow visit, Russian President Vladimir Putin assured India of continued energy and fertiliser supplies despite disruptions linked to the West Asia crisis.
But this very dependence explains much of the trade imbalance: high-value energy imports vastly outweigh India’s current exports to Russia.
The Difficult Road Towards Rebalancing
Reversing the imbalance will require more than simply encouraging Indian companies to sell more. Sanctions-related banking restrictions, payment difficulties, logistics, insurance costs and regulatory barriers have complicated two-way commerce.
Jaishankar has identified market access, removal of tariff and non-tariff barriers, stronger payment mechanisms and deeper business-to-business engagement as key priorities. Faster progress on the proposed India-Eurasian Economic Union trade agreement could also improve market access and create opportunities for Indian exporters.
India must particularly expand exports of pharmaceuticals, engineering goods, chemicals, machinery, textiles, agricultural products and digital services. Improved connectivity through emerging transport corridors can help, but infrastructure must be matched by predictable regulations, certification recognition and efficient financial channels.
From Energy Partnership to Balanced Economic Power
A large trade deficit is not automatically harmful when imports serve vital national interests. Russian oil and fertilisers have strengthened India’s economic and supply security. Yet a persistent $50-billion-plus gap creates vulnerability if bilateral commerce remains concentrated in a narrow range of Russian commodities.
The next phase of India-Russia economic relations must therefore move beyond simply increasing trade volumes. The real success will be measured not by whether trade reaches $100 billion, but by whether that $100 billion represents diversified, sustainable and mutually beneficial commerce. India’s strategic partnership with Russia has proved remarkably resilient; its economic partnership must now prove equally balanced.
(With agency inputs)
