The relationship between India and Russia – rooted in a legacy of mutual respect, non-alignment, and strategic cooperation – has evolved significantly since India’s independence in 1947. Trade and economic collaboration have been cornerstones of this enduring partnership, reflecting not just shared interests but a deep commitment to multipolarity and regional stability.
The Early Years: 1950s–1980s
During the Cold War era, the Soviet Union emerged as India’s largest trading and strategic partner. Through a series of bilateral agreements, the USSR supported India’s industrialization with assistance in building steel plants, heavy machinery industries, and defense capabilities. Trade during this period was characterized by rupee-rouble transactions, barter-based exchanges, and long-term credit lines—unique mechanisms that cemented trust and economic dependency between the two nations.
Post-Soviet Transition: 1990s
The collapse of the Soviet Union in 1991 marked a significant shift. The newly formed Russian Federation underwent major political and economic restructuring, and India, too, liberalized its economy. Despite temporary disruptions, both countries reaffirmed their ties with the signing of the 1993 Treaty of Friendship and Cooperation, and trade relations began to recover in the late 1990s. However, overall trade volumes remained modest compared to the Cold War era.
Strategic Partnership Era: 2000s–2010s
A major breakthrough came in 2000 with the signing of the India–Russia Strategic Partnership agreement, later elevated to a “Special and Privileged Strategic Partnership” in 2010. The focus expanded beyond defense to include energy, science & technology, space cooperation, and pharmaceuticals. Bilateral trade steadily increased, with energy and defense remaining dominant, alongside growing cooperation in nuclear energy, hydrocarbons, and information technology.
Diversification and Far East Focus: 2019–Present
In recent years, there has been a deliberate push to diversify trade beyond traditional sectors and explore new frontiers. The highlight came in 2019, when Indian Prime Minister Narendra Modi launched the “Act Far East” policy during his historic visit to Vladivostok , the first by an Indian head of government. India offered a $1 billion line of credit for development projects in the Russian Far East—marking a significant geopolitical and economic shift in trade focus.
Today, India and Russia collaborate across key sectors including:
1. Energy: Oil & gas, nuclear power
2. Pharmaceuticals: Collaboration in pharmaceuticals
3. Diamonds and Precious Metals: Trade in diamonds and precious metals
4. Agriculture and Food Processing: Cooperation in agriculture and food processing
5. Defense and Aerospace: Collaboration in defense and aerospace
6. Infrastructure and Connectivity: Development of infrastructure and connectivity projects, such as the International North-South Transport Corridor (INSTC).
Efforts are also underway to strengthen the International North-South Transport Corridor (INSTC) and explore direct shipping lines between Chennai and Vladivostok to improve trade logistics and reduce transit times.
Looking Ahead
India and Russia have set an ambitious target to increase bilateral trade to $30 billion by 2025. With initiatives like VIBA, greater engagement with the Russian Far East, and continued high-level political will, the Indo-Russian trade partnership is poised not just to grow—but to transform into a 21st-century model of cross-regional cooperation.