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Speaking at the October 2023 session of the Valdai International Discussion Club, Russian President Vladimir Putin declared the successful overcoming of all challenges arising from Western sanctions. While 2022 marked Russia's adaptation to new conditions, 2023 witnessed a confident recovery. According to forecasts, the growth of the Russian GDP by the end of 2023 may exceed 4%. Despite facing an unprecedented number of imposed restrictions, reaching almost 18,000, Russia has emerged as the largest economy in Europe by GDP at purchasing power parity, surpassing Germany, and the fifth-largest economy globally, maintaining this position for the third consecutive year.
For India, 2023 was hailed as a "year of special achievements" by Prime Minister Narendra Modi. In August, the country became the fourth "lunar power" in history, successfully landing the spacecraft of the Chandrayaan-3 mission on the Moon's surface and achieving the first-ever landing on the South Pole of Earth's satellite. India continues to be the world's fastest-growing major economy, with an expected GDP growth of around 7.3% in the 2023/2024 fiscal year. Speaking from the Red Fort on the occasion of India's 76th Independence Day, Prime Minister Modi promised that the country would become the third-largest economy in the world within five years.
Both Russia and India will hold elections in 2024, with leaders in both countries having significant chances of success. According to the All-Russian Centre for the Study of Public Opinion (VTsIOM), 79.8% of citizens trust Putin. Expert assessments and public opinion polls indicate significant chances of the ruling Bharatiya Janata Party winning the upcoming general elections, paving the way for another term for Narendra Modi, who has been leading the country for a decade.
The past year has been exceptionally successful for Russo-Indian relations. The economic aspect, traditionally considered a weak link in bilateral ties, has significantly strengthened. Russia, for the first time in history, secured the third position among India's trading partners, after China and the United States. The trade turnover reached a record $54.7 billion in the first 10 months, and by the end of 2023, it is expected to surpass $60 billion—a figure that recently seemed unattainable.
Due to Western sanctions on Russian oil and substantial discounts offered to New Delhi, Russia became India's top oil exporter, accounting for 40% of the country's total import volume. The republic aims to expand investments in the Russian oil and gas sector. New prospects are emerging in the nuclear industry, particularly in the construction of small nuclear power plants, as well as in the fields of pharmaceuticals, agriculture, the diamond industry, and fertiliser supplies. Talks on a free trade zone between the Eurasian Economic Union and India are set to begin at the end of January this year. Moscow and New Delhi are also working on an agreement for visa-free tourist trips.
However, bilateral relations still face several challenges. Addressing the trade imbalance, refining the commodity structure of trade turnover, and developing financial infrastructure are essential tasks. Significant efforts are required for the operationalisation of the North-South transport corridor and the launch of the Chennai-Vladivostok maritime corridor.
The final highlight of the rich bilateral dialogue in 2023 was the five-day visit to Russia by Indian Foreign Minister Subrahmanyam Jaishankar in late December. The Indian minister visited both capitals—Moscow and St. Petersburg—held talks with Russian Foreign Minister Sergey Lavrov, participated in a session of the joint intergovernmental commission on trade, economic, scientific-technical, and cultural cooperation alongside Russian Deputy Prime Minister and Minister of Industry and Trade Denis Manturov, and met with Russian Indologists and the Indian diaspora. The Indian Foreign Minister was also received by Vladimir Putin in the Kremlin. Important agreements were reached during this visit, particularly regarding two new blocks of the Kudankulam Nuclear Power Plant.
In 2023, it was not possible to organise a bilateral Russo-Indian summit, but both sides are confident that the summit will finally take place this year. Modi has already received an invitation to visit Russia. The possibility of holding comprehensive negotiations may arise on the sidelines of the BRICS summit scheduled for October in Kazan.
Addressing the Global Technology Summit in New Delhi ahead of his visit to Russia, Subrahmanyam Jaishankar gave exceptionally high praise to the relations with Russia, emphasising that these ties have often "saved" India. Vladimir Putin, in turn, spoke highly of India and its leadership. Speaking at the "Russia Calling!" forum, the Russian head of state referred to Narendra Modi's policies as a guarantee for the progressive development of Russo-Indian relations and admired the Indian Prime Minister's firm stance in defending national interests. "I cannot imagine Modi being scared, intimidated, or compelled to take actions and decisions contrary to the national interests of India and the Indian people," declared the Russian leader.
In recent times, Russia is rediscovering India, with growing interest in Indian culture and language studies. New centers for Indology are emerging, Russian media bureaus are opening in India, and existing ones are expanding. There is an increasing demand in the labor market for specialists with knowledge of Hindi, the Indian economy, law, business fundamentals, and regional analytics. A similar "Discovery of Russia" is expected to occur in India soon, thereby putting the perception of each other as secondary partners firmly in the past.
Leyla Turayanova, Expert, The Institute of World Economy and International Relations (IMEMO), Russia
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Exchanges between Moscow and New Delhi have increased across various levels. Russian government agencies and trade chambers have sent delegations to India, and there is a surge in business missions. Russia expects larger Indian exports in various sectors, and India is interested in Russian businesses in infrastructure and energy.
Over the past year, exchanges between Moscow and New Delhi have significantly increased across various levels – from G2G to B2B, corporate, cultural, education, and even spiritual. This has injected new life into the longstanding but somewhat stagnant ties that are crucial to both countries.
In 2023, various agencies of the Russian government, trade chambers, and associates have been actively sending delegations to New Delhi, Mumbai, Bangalore, and other parts of India. They have also hosted numerous Indian delegations in Russia. Officials note an unprecedented surge in the number of business and regional missions exploring new opportunities. Russia is optimistic about larger Indian exports in sectors like engineering, machinery, automobiles, pharma, textiles, and food, while India is witnessing great interest from Russian businesses in infrastructure, energy sectors, IT, and financial markets.
Russia-India trade turnover has crossed the $50 billion mark for the first time, compared to an average of $10-13 billion recorded in the past five years before the dynamics changed in 2022. Energy plays a key role in this surge, with India's primary crude source now overtaking Iraq and Saudi Arabia. Since April 2022, India's Russian oil imports have soared over 10-fold.
However, both countries are looking to make bilateral trade more diversified and sustainable.
Russia and India are time-tested partners, but new realities are testing the existing bond. The economic aspect of bilateral ties, even after a fivefold increase, is relatively small, considering India’s aspirations in defense, energy, and other sectors.
Take the Arctic, for example. The region holds the world's largest remaining untapped gas reserves and some of its largest undeveloped oil reserves. India's increasing interest in the Arctic region reflects a strategic response aligned with its evolving geopolitical and economic priorities, and Russia, as India’s strategic partner, is ready to share insights for operating in the Arctic.
The two countries possess enormous talent and domestically developed technologies but have often relied on the West to produce the end product. The “Atmanirbhar” drive, which is now evident in both countries at many levels, from policy-making to consumer behavior trends, could strengthen the “friendly bond,” of which we are so often reminded by high-profile dignitaries representing the two nations.
The problem is that the new generation of Indian diplomats, bureaucrats, businessmen, and even journalists lack the same “soft spot” for “Russian story books” as previous generations. As the new “point of affection” was never created, there is nothing “sentimental” about Russia-India relations for those professionals who actually drive the strategic policy-making, be it at government or corporate level.
That is the reason why awareness becomes the key factor shaping up Russia-India relations in the coming years. Seven decades of intense and open-hearted friendship have shaped the ties in such a way that "old memories" have dominated the "present realities," much like in a lasting marriage.
To ensure a vibrant union at 75, there needs to be some spice – or, more radically, a “new blood.” This could involve exploring new trade segments, fostering larger interactions between new generations – from school kids to students to mid-age entrepreneurs. The latter, on both sides, are more likely to be influenced by stereotypes or distant knowledge acquired from their parents about the Indo-Soviet relationship. Sad, but true - the generation of entrepreneurs leading the most valuable companies in Russia and India have very limited understanding of these two countries – most often shaped by the Western media.
For Russian business leaders, until very recently, India remained a land of tea, textiles and generic medicines, while Indian businesses often do not consider Russia to be an interesting market beyond weaponry, crude and fertilizers. In the past two years, an image of Russia as a “war-torn country” has been added to this picture, many in the Indian corporate sector told me privately. None of them have traveled to Russia lately.
But those who have, were genuinely surprised.
Moscow authorities noted in November last year that despite consistent tightening of sanctions from unfriendly countries, Moscow's economy, like that of the whole country, has adapted to “new realities” and returned to sustainable economic development. Positive dynamics in Moscow's budget revenues are noted in almost all sectors of the economy, including almost 19% growth in manufacturing, over 12% in transportation, almost 26% in construction, and over 20% in the IT sector. The vibrancy is palpable in Moscow cafes and malls. In 2023 alone, Moscow added 14 new underground metro stations and a new rapid train system line consisting of 74 stations.
The vibe may not be felt across the entire country, given its size, complex climate, geographical intricacies, and the ongoing military conflict. However, the Far East regions are witnessing unprecedented development of infrastructure, allowing them to export more minerals to Asian markets. New hotels and resorts are emerging around Lake Baikal. After being “isolated” from (or rather by) the West, Russia is rediscovering its richness and untapped potential. India could be a part of that discovery, tapping markets previously dominated by Western companies – from commercial development to automotive, consumer retail, and consulting.
Awareness about India’s growth among Russians has increased tremendously in the past two years, thanks to the media attention India is finally receiving in Russia. An average Russian news consumer now knows about India's strive to become the world’s third-largest economy, its space programs, startup ecosystem, and indigenously developed defense systems. Russians are slowly disassociating themselves from the past reality of the “Indian elephant on a tea box.”
Notably, the only attention Russia receives in Indian media is related to the Ukraine conflict, with most reporting on Russia reproduced by Indian media from Western global news agencies. It is time that this aspect of bilateral relationship, too, witnesses the power of “Atmanirbhar.”
By Ksenia Kondratieva, Editor, RT India
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For years, Russia has been a popular choice for Indian students seeking quality education. Renowned for its exceptional universities in fields like medicine, engineering, and science, Russia offers a blend of academic excellence and cultural immersion. In this article, we'll take a closer look at HSE universities and uncover the experiences of Indian students studying there.
HSE University is a leader in Russian education and one of the preeminent economics and social sciences universities in Eastern Europe and Eurasia. Having rapidly grown into a well-renowned research university over two decades, HSE University sets itself apart with its international presence and cooperation.
Now a dynamic university with four campuses in Moscow, Saint Petersburg, Nizhny Novgorod, and Perm, HSE University is a leader in combining Russian education traditions with the best international teaching and research practices. HSE University offers outstanding educational programmes from secondary school to doctoral studies, with top departments and research centres in a number of fields. They are ranked among the top 100 institutions worldwide in politics & international studies, sociology, history, economics and econometrics in the QS – World University Rankings by Subject.
Since 2013, HSE University has been a member of the 5-100 Russian Academic Excellence Project, a highly selective government programme aimed at boosting the international competitiveness of Russian universities.
HSE cooperates with over 400 universities worldwide through bilateral and multilateral projects, the European Commission and other schemes, as well as international associations and network memberships. Today there are about 5000 foreign students from all over the world including India are studying at HSE University.
There are several scholarships accessible for both international and local students at HSE. For Master’s Programs, there are seven scholarships tailored for international students, covering tuition fees from 25% to 70%. These scholarships, based on merit, are open to prospective students enrolling in any of HSE’s campuses, offering diverse opportunities for financial support.
Additionally, students can gain entry to HSE through a Rossotrudnichestvo grant or by participating in HSE Olympiads, such as the International Youth Olympiad and Higher Probation Olympiad. The 25% scholarship/grant is also an option for graduates of the preparatory department for foreign citizens of HSE, as well as graduates of preparatory departments from other Russian universities and graduates from other universities who have completed at least one semester at HSE as part of their Bachelor's or Master's program. Furthermore, a 10% scholarship/grant awaits graduates of the Summer University program.
Several programs at HSE University are accredited by EFMD Accredited (EQUIS), the European Foundation for Management Development. HSE’s educational programs are also state accredited by the Russian Federal Education and Science Supervision Agency.
These accreditations ensure that HSEs undergo rigorous examination and ensure the quality of education is of a high standard as well as consistently updating the education to adapt to the ever-changing, robust world we live in today.
HSE University offers 45 English-taught master’s programs. The Master of Data Science program, along with four other master’s programs, is delivered online in partnership with Coursera. Several of the programs offer double degree tracks, implemented with leading global universities.
The fields of study at HSE University range from Applied Mathematics to Advertising to Psychology. The institution’s programs cover essential areas of interest within contemporary society and the global workforce. Short-term study opportunities include Russian language courses, an International Preparatory Year, and a semester in Moscow, Nizhny Novgorod, or St Petersburg.
Find out what Indians studying/teaching in this university have to say about it.
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In the financial year 2022-23, on account of a rise in discounted oil exports to India, Russia’s bilateral trade with its strategic partner exceeded $40 billion for the first time. In the previous years, the figure struggled to surpass the $10-11 billion mark, which meant that the share of India and Russia in each other’s foreign trade remained at 1-2%. The surge in oil imports has made Moscow the leading supplier of crude oil to India, capturing about 35% of the market share in 2023. Apart from crude oil, other key imports from Russia include fertilisers, natural or cultured pearls, animal or vegetable fats and oils, iron and steel, etc. The exports from India mainly consist of pharmaceutical products, electrical machinery and equipment, organic and inorganic chemicals, and iron and steel.
Opportunities
The energy sector is billed as a promising area of cooperation, considering the projected increase in Indian demand for oil and gas due to its growth trajectory. Estimates indicate that by 2030, India will become the world’s third-largest energy consumer, heavily reliant on imports. The demand for LNG is also expected to surge supporting green growth, with imports projected to reach 124 bcm per day by 2040. Russia, aspiring to maintain a diversified portfolio of energy suppliers, can play a significant role in India’s energy market. Ongoing cooperation in nuclear energy via the Kudankulam Nuclear Power Plant (NPP) is anticipated to persist, with the plant expected to reach full capacity by 2027.
There is also an opportunity to further cooperation in existing areas of trade like pharmaceuticals, consumer goods, organic chemicals, etc. Russia has expressed eagerness to participate in the ‘Make in India’ programme to boost bilateral trade. Officials have also spoken about focusing on Indian exports to sectors not directly subject to sanctions, which include auto and spare parts, electronic goods and components, medical devices, high-efficiency solar PV modules, textile apparel, white boots, leather, and ceramics. There is also the possibility of expanding Russian exports in areas like metals, coking coal, metallurgical and mining equipment, water treatment and waste incineration equipment, timber and newspaper paper, food and agricultural products, etc. Both sides have also identified areas of cooperation in the Russian Far East, encompassing diamond processing, petroleum and natural gas, coal and mining, agro-processing, and tourism.
With the goal of increasing bilateral investment to $50 billion by 2025, Russia is considering investment in profitable infrastructure projects (such as industrial corridors, roads, telecommunications, energy). Suggestions for India include building a presence in the industrial and technological sectors in Russia. Historically, Russia has mostly invested in India’s oil and gas, railways, petrochemicals, and steel, while India focuses on the hydrocarbon and pharmaceutical industry in Russia.
Challenges
To harness these opportunities, India and Russia must address several issues that have long hindered bilateral trade. The substantial increase in oil imports, while contributing to the overall trade volume, has resulted in a growing trade deficit as Indian exports have not risen proportionately. The Vostro account, established for settlement of trade in national currencies, has seen Russia accumulate Indian currency worth over $40 billion. The aim of boosting exports is further complicated owing to Western sanctions, causing Indian businesses to be wary of the prevailing situation. The uncertainty stemming from these factors, coupled with the outflow of foreign capital from Russia, affects the willingness of businesses to enter the market.
While these issues have emerged after 2022, other factors have persisted over the years in the Indo-Russian economic relationship. The small-scale presence of the Indian private sector in the Russian market, the concentration of trade in a narrow range of products, tariff, and non-tariff barriers, connectivity as well as the declining share of Indian exports in the Russian market in some of the key sectors, including pharmaceuticals and organic chemicals.
The operationalisation of the International North-South Transport Corridor (INSTC) linking India to Russia via Central Asia and West Asia while cutting down cost and transit time has in the past faced challenges due to incomplete infrastructure, high freight rates, uneven infrastructure, and low trade volume. While some shipments have been moving via this route since 2022, the volumes at the moment remain insufficient and the project needs focused intervention by the concerned parties. Another connectivity route proposed is the Chennai Vladivostok Maritime Corridor, which was announced in 2019. It is expected that Russian exports will consist of natural resources from the Far East like oil, LNG, coking coal as well as fertilisers. Information about the sustainability of this route, the nature of Indian exports via the corridor, and the inclusion of other Asian players on this route remains unclear at present. Both sides have expressed optimism about the future of these connectivity links and are engaged in high-level discussions to operationalise them for improved trade.
Addressing the above-mentioned issues and simultaneouslyexpanding trade into newer areas such as high-tech products, joint industrial ventures, health, transport, etc. can give an impetus to India-Russia trade ties. In addition, fast-tracking customs clearance and implementing the bilateral investment treaty after completing the negotiations are expected to help improve economic relations. It is crucial to increase knowledge and enhance awareness about each other’s markets and trade opportunities while incentivising businesses on both sides to improve their presence. In this regard, industrial bodies as well as business/CEO councils on both sides will have to work efficiently in raising awareness and seeking solutions to the challenges described above to facilitate a balanced, high-volume, sustainable bilateral trade engagement between India and Russia.
Dr. Nivedita Kapoor, Research Fellow, International Laboratory on World Order Studies and the New Regionalism, Faculty of World Economy and International Affairs, National Research University Higher School of Economics, Moscow
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