Russia-India trade deficit gets bigger as crude shipments increase
Date
5/29/2024 4:00:47 AM
(MENAFN) New Delhi finds itself grappling with a widening trade deficit with Moscow, with figures from India’s Commerce Ministry indicating a significant increase to over $57 billion in the 2023-24 financial year, as reported by Mint. This staggering deficit marks an eightfold surge since 2021-22, a period coinciding with India's intensified procurement of crude oil from Russia. Despite a commendable 32% rise in exports during the same period, the expanding deficit underscores the substantial impact of India's heightened reliance on Russian oil.
In the last fiscal year, India's imports from Russia surged by 33 percent to reach $61.4 billion, predominantly fueled by soaring crude oil purchases. Meanwhile, exports to Russia recorded a notable uptick of 35 percent, driven by key sectors such as pharmaceuticals, telecommunications equipment, metals, and machinery.
New Delhi's amplified acquisition of Russian crude oil comes against the backdrop of heightened geopolitical tensions, particularly amidst the conflict in Ukraine. Despite facing scrutiny from Western nations, India has persistently increased its reliance on Russian oil, a trend that has become particularly pronounced in the 2024 fiscal year.
During this period, India's crude oil imports from Russia surged to USD46.5 billion, representing a substantial uptick from the previous fiscal year's figure of USD31 billion. In April alone, Indian imports of Russian crude oil reached a nine-month high of 1.96 million barrels per day (bpd), accounting for a significant portion—40.3 percent—of India's total crude oil imports. This surge marked a notable recovery from a temporary decline to approximately 33% in the preceding four months.
The escalating trade imbalance underscores the intricate interplay between global energy dynamics and India's economic landscape. As India grapples with the ramifications of its heightened reliance on Russian crude, the widening trade deficit serves as a stark reminder of the challenges posed by geopolitical developments on national economies.
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