Amidst the imposition of a 50% tariff by the US on Indian goods, External Affairs Minister S Jaishankar is advocating for a strengthened trade relationship between India and Russia. He urged Russian businesses to engage more extensively with their Indian counterparts, pointing to India’s expanding economy and initiatives like ‘Make in India’ as key drivers for foreign investment. Jaishankar suggested these factors create a conducive environment for increased involvement by Russian businesses.
Jaishankar noted that India’s GDP of over USD 4 trillion, projected to grow at 7%, necessitates access to significant resources from reliable sources such as essential products, fertilizers, chemicals, and machinery. He added that India’s infrastructure development offers ample opportunities for businesses with established track records. The ‘Make in India’ initiative and ongoing urbanization in India also represent new openings for foreign businesses.
The modernization and urbanization of India are generating new demands, linked to shifts in consumption patterns. Jaishankar believes these developments present opportunities for Russian companies to strengthen their engagement with Indian counterparts. He encouraged them to respond actively to this invitation.
Jaishankar emphasized that the relationship between India and Russia is one of the steadiest between major nations in current times. He pointed out that this historical relationship has not fully translated into robust economic cooperation, as the trade basket and volume have been limited. He suggested that both diversification and balancing of trade now require more vigorous efforts from both sides. This is crucial not just to increase trade targets but also to maintain the current trade levels.
Jaishankar pushed for enhanced cooperation to foster growth and accelerate development, highlighting India’s willingness to consider investments, joint ventures, and other forms of collaboration. He stressed the mutual benefits India and Russia can derive from promoting growth and accelerating development, with governments providing guidance and creating conditions for economic activities to thrive. The focus is on trade, investments, and collaborative ventures in key sectors.
He also mentioned the signing of the Terms of Reference (ToR) for the India-Eurasian Economic Union FTA, which is expected to impact trade positively. Discussions centered on promoting joint ventures in areas where demand is established. Several major investment-level initiatives were also discussed, with endeavors underway in skill development, mobility, and connectivity. Jaishankar concluded by urging businesses to step forward confidently, emphasizing the need for close collaboration between governments and businesses.
This push from Jaishankar for increased trade with Russia follows the US imposing a 25 percent ad valorem duty on Indian goods, with an additional 25 percent tariff taking effect from August 27, thereby increasing the total duty to 50 percent.