Think Tank
Moving Away From the Transactional Approach: What Russian-Indian Relations Require Today

Russian-Indian relations are distinguished by their strategic empathy, as consistently demonstrated by both sides at the state level, and the sincere disposition of the peoples towards each other. This creates huge, albeit largely untapped, potential for development. The article was prepared following the results of the second Russian-Indian conference of the Valdai Discussion Club and the Vivekananda Foundation.

Words about the time-tested friendship between Russia and India are repeated so often that they could be considered ritualistic. They were constantly heard during the second Russian-Indian conference, held by the Valdai Club and the Vivekananda Foundation in Moscow on January 27, 2025. Sceptics will say that friendships do not exist in international relations, only interests. Indeed, the long-standing cooperation between the two countries is grounded in common interests in various spheres, which remain unchanged regardless of the changing geopolitical situation. Fundamental contradictions between them have not arisen at any stage of the relationship. However, Russian-Indian relations are distinguished by strategic empathy, which is consistently demonstrated by both sides at the state level, and the sincere disposition of the peoples towards each other. This creates a huge and not fully explored potential for development.

India: the path of independence and non-alignment

The path chosen by India during the Cold War was, to some extent, ahead of its time. In an era defined by bipolar rivalry, the creation of the Non-Aligned Movement, founded by Prime Minister Jawaharlal Nehru, was a bold bid by the newly independent states of the Global South to establish their own place in world politics. The policy, however, did not meet the expectations of either pole. The Soviet Union was sympathetic to it, but the fact that the countries participating in the movement were deliberately refusing to join the socialist camp did not go unnoticed. The United States was irritated from the very beginning: in 1956, Secretary of State John Foster Dulles declared neutrality to be “an immoral and short-sighted concept.” While maintaining close ties with the Soviet Union and even declaring itself a “socialist state,” India consistently followed its own path, remaining open to the world and carefully protecting its own sovereignty. The collapse of the USSR had a powerful impact on India, both economically and ideologically. The country embarked on a path of economic transformation and relations with the West began to develop rapidly, but the foundations of its foreign policy worldview remained the same.

As the US-China rivalry mounts, the US sees India as a key ally in containing China. Indeed, India is extremely negative about the prospect of Chinese hegemony in Asia and is ready to counteract it. In any event, the idea of allied with the United States in the traditional American sense is deeply alien to Indian strategic thinking. That is why India participates in seemingly mutually exclusive formats of cooperation: BRICS and the SCO on the one hand, and Quad on the other.

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Opinions

Coincidence of views on the world order

Russia and India share similar views on the world order. This concerns both the concept of a multipolar world and cooperation within Eurasia. The two countries consider each other guarantors of stability on the Eurasian continent. Each of them has a positive attitude towards the growing role of the other in world affairs, and this is why Russia supports India’s bid to become a permanent member of the UN Security Council. Russia and India, along with China, constitute the core of BRICS, seeing in this association a tool for creating a more balanced world order.

An important challenge to security in Eurasia is the tension in India’s relations with China and Pakistan. The simultaneous accession of India and Pakistan to the SCO in 2017 created great potential for a reshuffle in the continent’s security architecture, although it did not deliver immediate results in terms of establishing a dialogue between the new members. Critics of the organisation, especially in the West, tirelessly emphasise the depth of contradictions between the SCO states, declaring the organisation “dysfunctional.” Indeed, an armed conflict between India and Pakistan occurred in 2019, during which the SCO took a neutral position, and a peaceful settlement was achieved through bilateral channels. It is important, however, that following the conflict, neither New Delhi nor Islamabad changed their fundamental attitude toward the SCO as an important instrument for ensuring regional security. In fact, by joining the organisation, they committed not to put their bilateral contradictions on its agenda, and the range of issues that the SCO deals with includes such important topics for both sides as the fight against terrorism and stability in Central Asia. The very fact of regular interaction between India and Pakistan within the organisation helps reduce tensions and maintain communication channels, strengthening trust and cooperation in a broad sense and emphasising the countries’ commitment to multilateral diplomacy.

Economic cooperation: potential and imbalances

Against the backdrop of close political interaction between Russia and India, the economic ties between the two countries remained extremely modest for years. Bilateral trade plummeted after the collapse of the USSR, which was one of India’s leading trading partners. Military-technical cooperation, a legacy of the Soviet era, remained a key element of the two countries’ economic relations, and in the 2000s, Indian orders played an important role in ensuring the stability of the Russian military-industrial complex. As the Russian economy recovered, bilateral trade grew, but very slowly – until 2022, when, thanks to massive oil purchases, Russia’s share of Indian imports more than tripled. Imports from Russia continued to grow in 2023-24, and the countries reached figures comparable to what Russia-EU trade had been in 2021. In absolute figures, trade turnover reached an impressive $66 billion, and the joint statement following the 22nd Russian-Indian summit “India-Russia: Enduring and Expanding Partnership” noted that it would increase in value to $100 billion by 2030.

However, the trade turnover between the two countries is extremely unbalanced: Russian exports are 13 times higher than imports. Despite the fact that India is discovering new export niches, and becoming, for example, a major supplier of smartphones to Russia, Russian oil supplies will continue to dominate bilateral trade in the foreseeable future. This state of affairs cannot be called brilliant. According to the participants of the Russian-Indian conference, the situation in the global economy today creates unique opportunities for the two countries. It is necessary to change the structure of interaction, create new production chains and invest in infrastructure. Russian investments in Indian railways, as well as ports and oil terminals will facilitate logistics and create opportunities to bypass sanctions, which will continue to be used as a weapon of economic warfare. In turn, Russia is especially interested in Indian investments in the Far East in the context of the development of the Vladivostok-Chennai transport corridor.

The high-tech sector is of particular importance. While the United States and China are aiming for leadership and are not going to share its fruits with anyone, it is important for both Russia and India to create their own technologies that they will not be able to obtain from outside. Deep interaction would be useful for both parties, although there are limitations associated with differences in priorities for technological development as well as and sensitivity to technological sovereignty issues.

Problems and prospects

One of the key problems in the development of Russian-Indian economic relations is the lack of knowledge about each other’s markets. This systemic issue generally accompanies Russia’s pivot to the East and is associated with a bias towards the Chinese market, with which both large and small and medium-sized businesses from Russia can work today. Learning something new means spending time and money, and the specifics of Russia’s business culture, in which you need “everything at once”, prevents the painstaking construction of business relations in the local context. However, this is not the only issue: after all, getting to know the Chinese market also required a lot of preparatory work on the part of Russian business. Transport and logistics links between Russia and India are poorly developed: bringing goods from India is twice as expensive as from China, and the number of regular passenger flights between Russia and India is much lower than between Russia and China.

The latter circumstance also hinders the development of interpersonal contacts. From year to year, public opinion polls record that citizens of Russia and India maintain friendly attitudes towards each other. Moreover, according to the latest data, 61% of Indians consider Russia “an ally that shares our interests and values” – more than in any other country covered by the study, including China. Such figures are especially noteworthy, given that Western narratives dominate the Indian media agenda. Everything indicates that there is abundance of goodwill on both sides, but not enough resources to implement systemic, long-term cooperation. Problem areas in Russian-Indian cooperation and possible solutions are covered in detail in the Valdai Club report prepared especially for the Russian-Indian conference. Its condensed version is available on our website, and the full version will be published in February.

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Lydia Kulik
Cooperation between Russia and India has a strong foundation, and significant efforts have been made recently to ensure that interactions between them improve in quality and gain regulatory and institutional support. Nevertheless, more work remains to be done. This is a condensed version of the report. The full version will be available on the Valdai Club’s website in February 2025.
Reports
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.