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By: Sohrab Bararia
11 Sep 2026 6 min read
Today, as global supply chains are being reshaped, and countries seek trusted economic partners, India and Russia have an opportunity to deepen their engagement through trade, investment and industrial cooperation. With bilateral trade reaching nearly USD 69 billion and both governments targeting USD 100 billion in trade and USD 50 billion in bilateral investment, the groundwork has been laid for a more diversified and future-oriented economic partnership.
For Russian businesses looking to expand internationally, India offers a compelling growth story. With a population exceeding 1.4 billion, a young workforce, improving infrastructure and an increasingly business-friendly policy environment, India has emerged as one of the world’s most attractive investment destinations.
More importantly, India is no longer viewed solely as a consumption-driven market. Over the past decade, the country has steadily positioned itself as a global manufacturing hub through initiatives aimed at improving competitiveness, strengthening logistics infrastructure, developing industrial corridors and promoting domestic manufacturing. These efforts have enhanced India’s role in global value chains and created significant opportunities for foreign investors seeking long-term growth.
This transformation creates a strong platform for Russian companies to expand beyond traditional sectors.
As economic engagement deepens, trade facilitation is becoming an increasingly important aspect of the bilateral relationship. Efforts are underway to reduce trade barriers, improve connectivity, strengthen payment mechanisms and encourage greater business-to-business collaboration.
Discussions around the proposed India-Eurasian Economic Union (EAEU) Free Trade Agreement have further reinforced interest in expanding market access between the two regions.
In addition, customs cooperation is helping create a more efficient trading environment. The Authorized Economic Operator (AEO) Mutual Recognition Agreement between the customs administrations of India and Russia allows trusted businesses to benefit from faster customs clearances and reduced procedural bottlenecks. Such initiatives can play an important role in improving supply-chain efficiency and lowering transaction costs for businesses operating across both markets.
Connectivity initiatives such as the International North-South Transport Corridor (INSTC) also hold the potential to reduce transit time and strengthen commercial linkages, making bilateral trade more competitive and sustainable in the long run.
While energy and defence remain the foundation of the India-Russia relationship, the scope for economic cooperation today extends far beyond these traditional sectors. Pharmaceuticals, engineering goods, machinery and chemicals have emerged as important pillars of bilateral trade, reflecting India’s growing role as a supplier of high-quality manufactured products and industrial inputs.
As both countries strengthen their manufacturing ecosystems, deeper collaboration across these sectors can help diversify trade and create more integrated supply chains.
Looking ahead, critical minerals and agriculture offer significant opportunities for long-term partnership. Russia’s abundant reserves of lithium, cobalt, nickel and rare earth elements can support India’s ambitions in electric vehicles, renewable energy and advanced manufacturing, while cooperation in fertilizers, food processing, agri-technology and precision farming can further strengthen agricultural ties.
Together, these sectors have the potential to broaden the economic relationship, reduce trade concentration and create a more balanced and resilient India-Russia partnership.
Achieving the ambitious bilateral trade targets will require stronger financial and banking cooperation between India and Russia. Expanding local currency settlement mechanisms can help reduce reliance on third-country currencies, lower transaction costs and improve the resilience of cross-border trade.
At the same time, enhanced banking connectivity, payment infrastructure and financial collaboration can provide businesses with greater certainty and efficiency in conducting transactions.
As trade and investment flows continue to grow, deeper financial integration will play a critical role in facilitating smoother commercial engagement and supporting the long-term objective of building a stronger and more sustainable economic partnership between the two countries.
Defence cooperation remains one of the strongest pillars of the India-Russia relationship and is increasingly evolving beyond traditional procurement towards deeper industrial collaboration.
Building on decades of successful cooperation in areas such as missiles, aircraft, tanks and naval platforms, both countries now have an opportunity to expand engagement through joint research, technology transfer, co-development and manufacturing.
India’s focus on strengthening domestic defence production and technological capabilities creates a strong platform for Russian companies to participate in the country’s growing defence ecosystem.
Looking ahead, collaboration can extend into advanced manufacturing, aerospace, defence electronics, unmanned systems and emerging technologies. Such partnerships can support investment, innovation and capability building while creating opportunities for skilled employment and export-oriented production. By combining Russia’s technological expertise with India’s manufacturing ambitions, defence cooperation can become not only a strategic partnership but also an important driver of industrial growth and long-term economic engagement.
Despite the rapid growth in bilateral trade, there remains significant potential to increase Indian exports to Russia and create a more balanced trade relationship. Achieving this will require focused efforts to promote sectors where India has established strengths and global competitiveness, including pharmaceuticals, engineering goods, machinery, chemicals, processed food products, information technology and professional services. In addition, emerging sectors such as healthcare, medical devices, automotive components, textiles, specialty chemicals, electronics, renewable energy equipment and digital solutions offer promising opportunities to expand India’s export basket and diversify bilateral trade.
Unlocking this potential will require deeper business-to-business engagement, stronger trade promotion initiatives, improved market access and greater awareness among companies about opportunities in each other’s markets. Enhanced cooperation through industry partnerships, technology collaborations and investment-led trade can further support export growth. As trade becomes more diversified across sectors and value chains, the India-Russia economic relationship can evolve into a more balanced, resilient and sustainable partnership, supporting the shared objective of significantly expanding bilateral trade by 2030.
Conclusion
The India-Russia partnership stands at an important inflection point. The trust built over decades, combined with strong political commitment and growing economic engagement, provides a unique opportunity to deepen bilateral cooperation. Achieving the shared vision of a USD 100 billion economic partnership by 2030 will require a sustained focus on trade diversification, investment facilitation, financial connectivity, technology partnerships and industrial collaboration across sectors such as manufacturing, pharmaceuticals, engineering, critical minerals, agriculture and advanced technologies.
As India strengthens its position as a global manufacturing and innovation hub and Russia seeks to diversify its economic partnerships, the convergence of these interests can help create a more balanced, resilient and future-ready economic relationship. The next chapter of India-Russia cooperation will be shaped not only by strategic alignment, but also by stronger business partnerships, industrial collaboration and shared economic growth.
Krishnan R, Associate Director, Incentives Advisory, Grant Thornton Bharat, have also contributed to this article.
This article first appeared in the Financial Express on 9 September 2026.
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