INDIA-RUSSIA SPECIAL AND PRIVILEGED STRATEGIC PARTNERSHIP

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Context

The 23rd India-Russia Annual Summit in New Delhi reaffirmed a "Special and Privileged Strategic Partnership" of 25 years, yet its emphasis on established ties over new agreements raises questions about whether the relationship is seeing a renaissance or stagnation.

About India-Russia Relations 

The India-Russia relationship, described as a 'Special and Privileged Strategic Partnership', is currently at a crossroads. 

While historical ties in defence and energy provide a strong foundation, the partnership faces stagnation due to trade imbalance and a slow diversification into new areas of cooperation. 

The 23rd India-Russia Annual Summit held in New Delhi in December 2025 reaffirmed the strength of bilateral ties.

• A key outcome was the adoption of a roadmap to boost bilateral trade to $100 billion by 2030. 
• Discussions focused on overcoming trade barriers, enhancing connectivity, and diversifying the economic basket beyond the dominant energy sector.

Area of cooperation and Concern

Economic Partnership

• Surging Trade Volume: Bilateral trade hit a record $68.7 billion in FY 2024-25, boosted by India's higher imports of discounted Russian crude after the Ukraine conflict. (Source: IBEF)
• Severe Trade Imbalance: India faced a massive trade deficit with Russia in FY 2024-25, importing about $63.84 billion while exporting only $4.88 billion. (Source: IBEF)
• Energy Dominance: Russia is India's top crude oil supplier, providing over 35% of total imports.
• Payment Mechanisms & Challenges: India and Russia's Rupee-Rouble trade mechanism is hindered by Russia's accumulated surplus rupee assets (the "rupee trap") due to the large trade imbalance.
• Banking Cooperation: The Central Bank of Russia opened a representative office in Mumbai in December 2025 to facilitate trade, complementing Russian commercial banks already operational in India, as financial integration increases.

Strategic & Defence Cooperation 

Defence forms the traditional core of the India-Russia relationship. Russia is still India's main arms supplier, providing 36% of its arms imports from 2020 to 2024. (Source: SIPRI).

This long-standing pillar faces new realities

• S-400 Triumf Missile System: India signed a $5.4 billion deal in 2018 for five S-400 regiments. Three are delivered; the final two are due by late 2025 (delayed by the Ukraine conflict). India may buy more.
• Shift in Model: The partnership is moving from a buyer-seller model to joint production and technology transfer, using 'Make in India' to manufacture spare parts for Russian-origin equipment in India.
• Challenges & Diversification: The Ukraine conflict raises doubts about Russian military supply reliability. India is consequently diversifying defence procurement, increasing imports from France, the US, and Israel.

Emerging Areas & Stagnation

Traditional cooperation continues, but new areas stall due to slow progress, causing stagnation. Recent summits aim to boost momentum in these sectors.

Connectivity: Focus is on the International North-South Transport Corridor (INSTC) and the Chennai-Vladivostok Eastern Maritime Corridor to cut transit time and costs between the two nations.

Arctic Cooperation: Russia is encouraging Indian investment and participation in the Northern Sea Route (NSR), which is becoming more accessible due to climate change. 

Labour Mobility: An agreement was signed to facilitate the employment of skilled and semi-skilled Indian workers in Russia to address labour shortages.

Nuclear Energy: Russia remains a key partner in civil nuclear energy, with ongoing cooperation at the Kudankulam Nuclear Power Plant and discussions on new technologies like Small Modular Reactors.

Challenges in the India-Russia Relations

Russia-China Axis: Russia's increasing strategic and economic dependence on China is a primary concern for New Delhi, as it complicates India's security calculations.

India's Western Tilt: India's growing partnerships with the West, particularly its active role in the Quad (comprising India, the US, Japan, and Australia), create a geopolitical divergence with Russia's worldview.

Addressing the Trade Deficit: Bridging the vast trade deficit is the most urgent economic challenge. India is pushing to increase its exports of pharmaceuticals, engineering goods, and agricultural products to Russia.

Way Forward

The India-Russia relationship is characterized by strong trust and strategic cooperation, but it is currently challenged by economic disparities and shifts in the global geopolitical landscape.

The future of this "all-weather" partnership depends on its ability to successfully diversify economic ties, resolve the trade imbalance, and manage the growing geopolitical divergences in a pragmatic manner.

Source: INDIAN EXPRESS