Briefly: Russia and India have resumed free trade discussions after initial talks were delayed by Covid-19 and Russia’s invasion of Ukraine. Russia’s Deputy PM made the announcement while visiting Delhi yesterday (Monday).
Even without a free trade agreement (FTA), India-Russia trade is flourishing. Russia’s exports to India have quadrupled since the West sanctioned Moscow last year. India now imports half its oil from Russia, up from 1% before the war.
And Russia isn’t the only one hoping to ink an FTA with India. Others are also lining up, as India surpasses China to become the world’s most populous country.
Intrigue’s take: This all begs two questions: first, why is India doing FTAs now, after years of showing less enthusiasm than a dad at a Wiggles concert? Well… India’s now stronger, its industry more competitive, and the world more eager to hedge on China. And that all puts Delhi in a better negotiating position.
But second, why would India deal with a pariah like Russia? Well… India’s now more confident, and clearly thinks the benefits of ties with Russia (cheap oil, a stable border, and a hedge against China) outweigh the costs (Western criticism).
Also worth noting:
- According to a State Bank of India report, India will be the world’s third largest economy by 2029, up from the tenth slot in 2014.
- A US official said the US won’t look to sanction India for buying Russian oil, as India is one of its “most consequential relationships.”