(MENAFN- KNN India)
New Delhi, Jul 19 (KNN) In a comprehensive report released on Thursday, the Global Trade Research Initiative (GTRI) outlined several strategies to bolster trade relations between India and Russia.
The think tank's analysis comes in the wake of significant shifts in bilateral trade patterns since the onset of the Ukraine conflict in February 2022.
According to GTRI Founder Ajay Srivastava, key steps to enhance trade include increasing exports, implementing viable local currency trading mechanisms, and establishing a free trade agreement with the Eurasian Economic Union.
The report also addressed concerns over the growing trade deficit, noting that India's strategic procurement of discounted crude oil from Russia has effectively reduced the nation's overall oil import expenses.
Trade figures reveal a stark contrast in growth rates between exports and imports. While exports grew by 59 per cent between fiscal years 2020-21 and 2023-24, imports surged by approximately 8,300 per cent.
This dramatic increase has led to a trade deficit expansion from USD 2.8 billion pre-conflict to the current USD 57.2 billion.
The report attributes this import surge primarily to India's strategic oil purchases from Russia, driven by favourable trade terms and Russia's need to diversify its market amidst Western sanctions.
Notably, crude oil and petroleum products now constitute 88 per cent of India's imports from Russia.
During Prime Minister Narendra Modi's recent visit to Russia, both nations set an ambitious bilateral trade target of USD 100 billion by 2030. With current trade volumes at USD 65.7 billion for 2023-24, GTRI analysts deem this goal attainable.
The think tank emphasises the need for a product-level strategy to promote Indian exports, which currently include a diverse range of goods such as smartphones, pharmaceuticals, and agricultural products.
Srivastava suggests that India has a competitive advantage in these sectors and could potentially increase its export volumes.
Addressing the challenges of financial transactions, the report discusses the limitations of rupee-based settlements due to the currency's limited international use.
It proposes the establishment of a transparent, multi-currency exchange platform to facilitate local currency trading and provide clear market-determined exchange rates.
The analysis also highlights the potential of the International North-South Transport Corridor (INSTC) to significantly reduce transit times and costs between India and western Russian ports.
However, it notes that underinvestment in infrastructure has limited the corridor's current utility.
As India and Russia navigate evolving global economic dynamics, these strategic measures could play a crucial role in reshaping their bilateral trade relationship.
(KNN Bureau)
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