The increase in trade volumes was propelled by skyrocketing energy imports by New Delhi, which accounted for over 62% of bilateral trade and over 19% of India’s total oil imports³ in the financial year. Indian imports of energy have risen from approximately $2.5 billion in 2021-22 to over $31.0 billion in 2022-23, a 13-fold increase.⁴ By all estimates, oil imports from Russia are expected to increase further. Energy cooperation marks an important component of the relationship.

Moscow’s significant investment in India includes the $13 billion by Rosneft for Essar Oil⁵ – one of the biggest foreign investments made by Moscow and the most significant FDI investment for India. Apart from this, the Indian public sector has also invested over $15 billion in Russian oil, with projects like the development of Sakhalin-1, and bought assets, including 49.9% in Vankorneft and 29.9% in TAAS-Yuryakh Neftegazodobycha.⁶

Though on the surface the figures show robust trade between the countries, they present a stark picture if carefully examined. Out of the entire trade volume, India exported only $3.1 billion to Russia in 2022-23, a 3% decline from $3.2 billion in 2021-23 (see Figure 1).

Therefore, India’s trade deficit with Russia, running to $34.7 billion between April 2022-January 2023⁷, is now second only to its deficit with China. Thus, in the foreseeable future, the challenge, especially for India, is to correct this imbalance, diversifying the economic partnership and exploring new sectors for cooperation.

Political Relations

India considers Russia a time-tested friend. This stems from the fact that the USSR helped mediate a ceasefire during the 1965 clashes between India and Pakistan and during those in 1971, it emerged as an indispensable partner for India in the United Nations Security Council (UNSC), using its veto to support New Delhi. As mentioned earlier, the signing of the agreement in 1971 further bolstered this partnership. After the end of the Cold War, the agreement was replaced by a friendship treaty in 1993, followed by the signing of a strategic partnership in 2000 and the elevation of that partnership to special and privileged status in 2010. This record has provided a sound basis for the partnership to develop into the new century.

There are two strands that are visible in political relations. First, Moscow’s “turn to the East” has underscored its desire to recalibrate its links with Asian countries so as to counterbalance its economic ties with the Western world, especially the EU. Moreover, as the Ukraine conflict continues, this has become much more important given the Western push to isolate Russia globally. Moscow’s outreach, not only to Asian countries but also to the African continent, should be viewed in light of that counterbalancing. Against this backdrop, India has emerged as a key partner, with Moscow recognizing and acknowledging the increasing role that India has come to play in global geopolitics.

Though relations were at a high point during the Cold War due to the abovementioned factors, they have been kept up in the post-Cold War period through annual summits, various joint consultations and working groups. Yet some elements of the partnership have remained constant. First, Moscow has maintained its committed support for New Delhi at various multilateral forums, most importantly at the UNSC – especially on issues related to Kashmir, with Moscow using its veto five times (between 1957-1971) and more recently, in 2019, becoming the first P5 country to respond to India’s changing the constitutional status of Jammu and Kashmir and calling it “India’s internal matter.”⁸ Similarly, India has also abstained in the UN General Assembly on various procedural votes on the Ukraine conflict, stressing the need for dialogue and diplomatic resolution of the conflict.

The second common thread is their vision of a multipolar world that reflects the changing power dynamics of the last few decades. Russia and India cooperate and collaborate in multilateral forums like the Shanghai Cooperation Organization, BRICS and the G20.

Recognizing the increasing stature of India in global politics, Russia is supportive of India’s call for reforms of multilateral institutions, importantly its bid for a permanent seat on the UNSC, as well as its membership in the Nuclear Suppliers Group. There are some inherent differences in their vision for a new, reformed world order that reflects the present-day balance of power, however. For Moscow, the new multipolar world is in juxtaposition to the US-led world order, while for India, it is more about a multipolar Asia, which does not exclude Western countries – rather India seeks to reform global multilateral institutions to give space and voice to new and emerging countries. Despite these differences, India and Russia try to find ways to navigate the current global order and coordinate their positions wherever possible.

Military/Defense Relations

Defense cooperation remains the cornerstone of India’s relations with Russia. During the Cold War, most of India’s defense kit came from the USSR, including the licensed production of MiG-21 aircraft, followed by the MiG-27 and T-72 tanks. The cooperation was driven by the fact that there was reluctance among Western countries to engage with India and that the prices offered by Moscow were lower than those in the West. This strand of relations has remained robust in the post-Cold War period, with, according to a SIPRI report, Russia still India’s biggest arms supplier. However, its share of Indian defense imports decreased from 62% to 45% between 2017 and 2022.⁹

In the past few years, India has tried diversifying its defense sector and reducing its dependency on imports of military hardware. Through its initiatives like Make in India and Atmanirbhar Bharat, India plans to invigorate its domestic manufacturing. For example, according to reports, 75% of the defense procurement budget was earmarked for domestic industry in 2023-24, up from 68% in 2022-23.¹⁰ India is also diversifying its partners and increasing its cooperation in defense with countries like the US, France, Israel and others. Nevertheless, Russia remains an essential partner, primarily because most Indian weapons systems are of USSR/Russian make, including MiG-29s, submarines, Su-30MKIs and the recently acquired S-400 missile system. All this requires regular maintenance, upgrades and spare parts. Therefore, despite India’s focus on enhancing its local capacity, it remains unlikely that it will be able to ultimately diversify completely away from Russia, even though it has reduced its dependency some. In addition, joint production of BrahMos supersonic cruise missiles – offered to partners, including the Philippines and Vietnam¹¹ – and a nuclear submarine program remain essential aspects of military cooperation.

Moscow realizes that India has been working toward self-reliance in the defense sector in the past few years. At the same time, while New Delhi has emphasized Russia as a strategic and indispensable partner, there are some concerns regarding Moscow’s ability to deliver certain services and equipment, especially given that in the near future the Russian military-industrial complex will be working to equip its own military instead of focusing on exports. Hence some of the recent decisions of New Delhi, such as canceling plans to buy 48 more Mi-17V-5 helicopters from Russia.¹² This reflects that new reality and the focus on diversifying partners and doubling down on domestic production.

Conclusion

According to a Pew Research Center poll in 2023, 57% of Indian public opinion remained positive on Russia, with many believing that Moscow’s global influence has strengthened.¹³ There was also positive feedback on the Indian government’s response to the Ukraine conflict, with 62% of Indians calling it effective.¹⁴ This reflects that India and Russia share long-standing relations based on historical, diplomatic and economic ties. This is not to say, however, that the partnership is not under stress due to various external factors. Most notable among those is the increasing cooperation between Russia and China. India views Beijing’s actions in its neighborhood with apprehension, with those on India’s borders in 2014, 2017 and 2020 bringing diplomatic relations to a near-standstill.

On the other hand, China’s relations with Russia progressed steadily in the past few years and have been further augmented by the Ukraine conflict, with Beijing emerging as the top importer of Russian energy. This growing bonhomie has raised certain concerns within the Indian establishment and generated rising weariness in Western countries. Against this geopolitical backdrop, it makes sense for India to engage with China’s primary geopolitical adversary, the US, and its closest partner, Russia.¹⁵ However, walking this fine line requires deft diplomacy and political acumen, as India has demonstrated. For New Delhi, its time-tested partnership with Russia remains geopolitically justified even as it diversifies its political, economic and defense relations.