NEW DELHI (Portal) – India and Russia are discussing a free trade agreement (FTA), Russia’s trade minister said Monday, an announcement that could deepen bilateral trade ties that have flourished since war broke out in Ukraine.
The FHA talks mark an intensification of economic ties between the two countries, although Western countries are urging India to gradually distance itself from its dominant arms supplier, Russia, over its February 2022 invasion of Ukraine.
India’s imports from Russia more than quadrupled to $46.33 billion in the last fiscal year, mostly from oil.
“We pay special attention to issues of mutual access of production to our countries’ markets,” said Russian Deputy Prime Minister Denis Manturov, who is also Minister of Trade, at an event in New Delhi.
“Together with the Eurasian Economic Commission, we look forward to intensifying negotiations on a free trade agreement with India.”
Indian Foreign Minister S Jaishankar said the COVID pandemic has disrupted discussions on a free trade deal between India and the Russian-led Eurasian Economic Union and he hopes “our colleagues will take this up…because we believe there is a real difference to.” our trading relationship”.
Manturov said road construction materials and equipment, as well as chemicals and pharmaceuticals, are in demand in Russia and “I’m sure this will create opportunities for Indian companies to increase their supplies to Russia.”
The announcement comes at a time when New Delhi is also in talks on free trade deals with Britain, the European Union and the Gulf Cooperation Council.
Portal reported in November that Russia may be trying to import more than 500 products from India for key sectors like cars, planes and trains, as Western sanctions over Russia’s military action in Ukraine have undermined its ability to keep core industries running.
Manturov also said Russia will consider expanding the use of “national currencies and currencies of friendly countries.” India is keen to increase the use of its rupee currency to trade with Russia.
Russia describes its campaign in Ukraine as a “special military operation” against security threats, while pro-Western Ukraine speaks of an unprovoked war of conquest.
New Delhi has not explicitly criticized the Russian invasion and has called for a peaceful solution to the conflict through dialogue. Russian-Indian bilateral trade has skyrocketed as the war has progressed.
Russia, traditionally India’s top source of military equipment, ousted Iraq last month to become India’s top supplier of crude oil. Before the war that started in February last year, India bought very little oil from Russia.
Russia’s efforts to improve trade with India are part of its strategy to avoid the effects of Western sanctions by boosting trade with Asian giants, including China.
Moscow is also trying to increase or maintain cooperation with other South Asian countries, most recently agreeing to pay in yuan for the construction of a nuclear power plant in Bangladesh and discussing discounted oil exports to Pakistan.
Jaishankar said Indian companies could benefit from Russian technology and that New Delhi is working to iron out payment, certification and logistics issues.
Reporting by Nidhi Varma; Edited by Kim Coghill
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Krishn Kaushik