export
Trade between India and Russia has increased rapidly, but this growth is not balanced. Due to huge purchase of crude oil from Russia, Indian companies have paid billions of dollars worth in rubles. The result was that rubles equivalent to about 50 to 55 billion dollars have been deposited in Russia’s bank accounts, which are not being fully utilized. Now India wants that this money should be used to buy Indian goods, so that the trade balance can be improved.
The Indian government has clearly told Russia that if Indian exports are to increase, then trade barriers will have to be reduced. India especially wants to increase exports of electronics, engineering products, food items and fishery products. India’s capability in these sectors is strong and their demand is also being seen in the Russian market.
Rules become a big hurdle
It is not easy for Indian companies to enter the Russian market. Local rules related to software are becoming a big problem in the electronics sector. At the same time, engineering goods are facing delays in clearance due to stringent technical standards. Small and medium exporters are left behind as documentation and labeling in local language is required for many products.
increasing trade deficit
These obstacles have had a direct impact on the India-Russia trade balance. India’s trade deficit has reached approximately $25 billion in the first seven months of the current financial year. The main reason for this is the import of crude oil from Russia, which has become a major part of the total trade.
There is also a ray of hope
According to reports, due to US sanctions on some Russian oil companies and alertness of Indian refiners, there may be a slight reduction in losses in the future. The good thing is that Russian retail companies are showing interest in Indian food products and other goods. If trade barriers are removed, the accumulated rubles can be channelized through Indian exports.