The increase in India’s trade with Russia will primarily be due to an increase in the supply of mineral resources from the Russian Federation. Vitaly Mankevich, President of the Russian-Asian Union of Industrialists and Entrepreneurs (RASPP), told Izvestia about this on November 14, commenting on India’s plans to double the volume of trade, including using the national currency.
“The share of Russian oil in India’s total consumption rose sharply from 1% to 22%, thus in October more oil was exported from Russia to India than from any other country, including Saudi Arabia and Iraq,” he said.
Mankiewicz specified that Russia traditionally imports from India mainly pharmaceutical products, textiles, sugar cane molasses and its derivatives.
In addition, according to him, Indian entrepreneurs are interested in the supply of clothing and leather goods to Russia.
“As for exports, imports from the Russian Federation of mineral resources, jewelry, equipment, paper and cardboard, chemicals, metallurgy products, etc., are very popular here,” he added.
Currently, RAUIE is negotiating to attract an Indian investor to the Russian dairy industry sector, Mankevich noted.
At the same time, Anton Prokudin, chief macroeconomist at Ingosstrakh Investments Management Company, noted that Russia is selling a significant amount of hydrocarbons, chemicals, and gold to India.
“Given the restrictions imposed on the sale of raw materials (primarily oil, gold, diamonds) to Europe and a number of developed countries, India is now becoming a logical sales channel, which is reported in the media,” the expert explained.
It also imports and exports products of mechanical engineering and weapons. According to Prokudin, this segment may also grow, however, most likely, India will become a transshipment point for an additional volume of such goods, rather than a final consumer.
“Settlements in national currencies without the US dollar are a convenient way to avoid possible asset freezes and secondary sanctions. The balance of trade in recent years has been shifted towards Russia (imports were 1.7–1.9 times less than exports), so an excess of rupees when trading in national currencies may become a good resource for investment in the Indian economy in the future,” the economist believes.
At the same time, Eduard Khristianov, First Deputy Chairman of the Board of RosDorBank PJSC, recalled that until recently, the main players in the Indian banking sector refused to make settlements with Russian counterparties in rupees, as they feared falling under secondary US sanctions, but the situation is changing. Thus, the Indian authorities announced the resolution of settlements in rupees.
“However, it has not yet been decided how the Russian side will be able to use the additional volumes of incoming rupees, the demand for which is rather low in the market. It is necessary to find common ground on imports from India. In the meantime, there is a significant excess of oil exports over the volumes of traditional imports, including the leaders – tea and pharmaceutical products,” he said.
Most likely, settlements in the oil industry will remain in US dollars in the near future, but an increase in trade with payments in rupees for other commodity categories is quite possible, Khristianov said.
Doctor of Economics, Director of the Institute for Psychological and Economic Research Alexander Neverov added that India at all sites confirms its readiness to maintain the growth rate of trade with Russia in 2023.
He expressed the opinion that the United States specifically made a statement that it did not object to India’s energy trade with Russia.
“So the prospects for trade are very good. And not only next year, but also in the foreseeable future. And it is obvious that the share of settlements in national currencies will gradually increase due to the fact that new contracts will already be in them, and not in dollars. But, of course, in the next 3-5 years, a complete rejection of the dollar in trade with India should not be expected, ”concluded Neverov.
The day before edition The Indian Express wrote that India decided to double the volume of trade with Russia, including with settlements in national currencies.
On October 30, The New York Times reported that exports from Russia to friendly countries have been growing throughout the year: to India, the figure increased by a record 430%.
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