During Russia Visit, Jaishankar Again Flags Large Trade Deficit
New Delhi: A year after India raised its widening trade deficit with Russia as a key concern, external affairs minister S. Jaishankar again pressed Moscow to address this imbalance on Monday (August 24), saying the gap has remained above $50 billion.
President Vladimir Putin, with whom Jaishankar spoke in Moscow on Monday, also told the minister that Russia is “doing everything” it can to help India and its farmers with fertiliser supplies, which the US-Israeli war on Iran have put under strain.
Speaking at the 27th session of the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) in Moscow, Jaishankar, who co-chairs the body, flagged the trade imbalance as one of New Delhi's “foremost priorities”.
Bilateral trade has grown by over four times from around $13 million in 2021-22 to almost $60 million in 2025-26, but this has “been accompanied by a significant widening of the trade imbalance, which has also increased from $6.6 billion to over $50 billion. Addressing this imbalance is today one of our foremost priorities,” Jaishankar said.
Narrowing this imbalance will require steps on market access, removal of tariff and non-tariff trade barriers, strengthening payment mechanisms and getting businesses in both countries to engage more with each other, he added, pointing also to the two countries' goal of having bilateral trade reach $100 billion in value by 2030.
India's trade deficit with Russia ballooned in 2022-23 after Indian refiners began buying Russian crude oil – which became cheaper thanks to Western sanctions responding to Moscow's invasion of Ukraine – in unprecedented quantities.
Jaishankar also underlined the need to “constantly update our view of opportunities and explore new possibilities” in view of various global uncertainties. “The complicated international scenario will constantly throw up fresh ideas because we are all focused on de-risking and diversifying.”
First deputy prime minister Denis Manturov, who co-chairs the commission alongside Jaishankar, also noted the need for business-to-business engagement between the two countries and, like the Indian minister, said that the pending Indo-Eurasian Economic Union free trade agreement can bring progress to trade ties.
In last year's meeting of the IRIGC-TEC in Moscow too Jaishankar had mentioned the need to ‘urgently’ address the trade imbalance and called for an early conclusion to the free trade deal.
After the commission's meeting Jaishankar called on Putin, who said that items on the bilateral cooperation agenda ‘extend far beyond energy supplies’.
“Fertiliser shipments are among these matters. We are doing everything to resolve this issue for Indian farmers and for the country's agricultural sector. Russia is expanding its exports and is ready to continue doing so,” Putin said.
These shipments have been disrupted due to the US-Israeli war on Iran, and West Asia ordinarily accounts for around half of India's DAP and urea imports. Noting the global rise in fertiliser prices due to the crisis, Bloomberg has cited an Indian government source as estimating that India's fertiliser subsidy bill is likely to cross Rs 3 trillion in the ongoing fiscal, higher than the budgeted Rs 1.71 trillion.
Meanwhile, energy continues to be an important aspect of bilateral trade. With the West Asia crisis also disrupting import-dependent India's oil supplies, Indian refiners have once again tapped Russian crude. The Hindu reported earlier this month that Russian oil's share of India's crude imports hit an all-time high of 48% in June in terms of quantity and 48.6% in terms of value.
Indian purchases of Russian crude had however hit a roadblock in the second Trump administration, which got India to ‘diversify’ its oil imports last year after applying some of its highest tariffs on any country – 50% – partly as a measure against these imports. Now the US legislature is considering a Bill that would apply a tariff of up to 100% on Russia's largest oil and gas buyers – a category that includes India.
This article went live on August twenty-fifth, two thousand twenty six, at twenty-nine minutes past three at night.The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.
