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    Will India manage to make a major trade mark in Russia? Sunday, December 29, 2024

    Indian exports to Russia declined 14% to $2.2 billion in April to December 2022, primarily due to logistical problems created by payment disruptions. The trade imbalance between the two countries would further delay efforts to switch contracts to local currencies.

    Indian Prime Minister Narendra Modi and Russian President Vladimir Putin share cordial relations and converse regularly, most recently a week ago, all the while trying to infuse a momentum into their bilateral relations, particularly the trade partnership.

    Their commitment to the special and privileged strategic partnership between the two nations saw them “chalk out a roadmap for future initiatives,” Mr Modi said which, India’s foreign ministry elaborated, includes expanding military and technical cooperation, including modern weaponry manufacturing, discussed when Indian Foreign Minister Subrahmanyam Jaishankar met his Russian counterpart Sergei Lavrov in Moscow last month.

    While both New Delhi and Moscow appear eager to provide economic heft to their partnership beyond these traditional areas, the path to enhanced commerce is not proceeding as smoothly as both establishments would like. This is despite the spurt in the bilateral volume of trade since Russia’s conflict with Ukraine began two years ago, leaving Russia facing massive sanctions and cut off from its main energy market in Europe.

    Russia became India's fourth largest source of imports in 2022, driven by the energy trade boom, as a near insatiable India absorbed energy exports redirected from Europe, going on to import 17% of its crude oil and 9% of its coal from Russia, at hefty discounts. India’s fertilizer imports also rose to $2.1 billion in 2022, from $376 million in 2021, according to India’s Directorate General of Foreign Trade. In fact, Russian exports to India grew almost fivefold, to $32.8 billion in April-December 2022, from $6.6 billion the previous year. The problem lies in the fact that Russian imports far outweigh Indian exports to Russia.

    Beyond energy security, including nuclear energy sufficiency, food security has emerged as another area of enhanced cooperation, as Russian fertilisers, agricultural appliances and Indian demand for sunflower and soybean oil and legumes have added to India’s import bill.

    However, for Indians wishing to trade with Russia, the situation is more complicated and, analysts said, likely to remain at a government to government level for more time. India's trade deficit with Russia has rapidly burgeoned, as its exports lag far behind imports. Indian exports to Russia declined 14% to $2.2 billion in April to December 2022. This was primarily because of logistical problems, created by payment disruptions as, post-sanctions, Russia is now mostly cut off from international payment systems, making trade settlements longer and more convoluted.

    Analysts and officials say this trade imbalance would further delay efforts to switch contracts to local currencies, despite both governments being willing. To facilitate energy imports post-sanctions, the Reserve Bank of India set up, in July 2022, a new payment system to facilitate trade in Rupees. Media reports said, similarly, several Russian banks opened "Vostro" accounts with Indian banks.

    The continuing war in Ukraine, sanctions on Russia and geopolitical tensions remain major obstacles to enhanced Indian exports to Russia, along with the absence of enthusiasm in India’s private sector entities. The threat of secondary sanctions and penalties imposed on third country actors doing business with sanctioned organizations obviously discourages Indian private companies from actively pursuing trade with Russian entities.

    While India benefits from access to cheaper Russian commodities, analysts point out that there is a marked difference between government expressions of interest and Indian private entities doing business on the ground in Russia. Additionally, transport, safety and the time taken for Indian exports to reach Russia, with hostilities having erupted across the Middle East, further discourage private sector players from seriously investing in Russia. The International North-South Transport Corridor (INSTC), which passes through Azerbaijan and Iran and would drastically cut transport time, thereby allowing enhanced volumes of freight, is still far from ready.

    Refusing to be discouraged and to take their trade to the next level, both countries are working on options to boost bilateral trade, including deciding to facilitate movement of freight by using a new water route, the Northern Sea Shipping route. This route is among the safest routes for goods transport and the shortest route connecting East Asia and Europe.

    India is now among the top 10 suppliers of pharmaceutical products to the Russian market. Restrictions on supplies of such products from the European Union and the U.S. have given Indian companies new opportunities. Russian imports of pharmaceutical products grew by 16% $16 billion in 2022, from $14 billion in 2021, according to Russian customs data.

    The Russian government and businesses require machinery, equipment and spare parts, including for the automobile and civil aviation sectors and IT and electronics products, to substitute for a lack of western imports. Opportunities to further diversify into a wider range of products have not been very successful yet. The Indian services sector and Indian lifestyle products and services, along with gems and jewellery, handlooms and clothing and footwear manufacture remain areas with potential, but whether the Russian market is ready to look away from the West towards India remains unclear. Despite the multiple geostrategic dangers since 2022, both countries have managed to maintain and even improve their trade relations, crossing a mark of $18 billion in just six months in 2022.

    Geopolitical and strategic considerations do impact Indian trade with Russia, which is seen as drawing closer to China after western sanctions. China remains the largest market for Russian oil and is a major market for Russian defence hardware, naturally increasing Indian concerns. While enhanced trade with and increased economic involvement in India would certainly help Russia remain not solely dependent on China, all the alignments for enhanced trade have not yet taken off to attain cosmic volumes.

    By Nilova Roy Chaudhury

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    How a foreigner can bring money & pay in Russia in 2024

    Since mid-2022, the landscape of financial transactions in Russia has undergone significant upheaval as major international financial institutions, including Visa, MasterCard, and American Express, suspended their operations in the country. As a result, the use of these cards for payments or cash withdrawals became untenable, compelling both tourists and businesspeople to explore alternative methods of payment and currency importation.

    Currency Import: Travelers to Russia are permitted to bring various currencies into the country, with amounts up to $10,000 exempt from declaration requirements. However, any sums exceeding this threshold must be declared, and amounts surpassing $100,000 necessitate an explanation of the funds' origin. Failure to comply with these regulations can result in severe penalties, including confiscation of funds and potential criminal repercussions. It's important to note that these regulations apply equally to both air and land borders, underscoring the importance of adherence to customs procedures.

    Opening a Bank Account: For those seeking to conduct financial transactions within Russia, the option of opening a bank account presents itself as a viable alternative. Foreigners are permitted to open accounts in Russian banks, typically transacting in major currencies such as dollars or euros. However, the process requires specific documentation, including a passport, notarized translation, and visa or migration card. Notably, since July 2023, citizens of certain countries have been able to submit these documents remotely, streamlining the account opening process.

    Financial Services: In lieu of traditional banking methods, various financial services have emerged to facilitate money transfers to Russia. Platforms like Koronapay and Unistream offer convenient options for transferring funds, albeit with limitations on sending countries and associated transfer fees. Similarly, YooMoney provides a unique solution by issuing free MIR debit cards to foreign tourists, enabling currency exchange and deposits at select locations such as Sheremetyevo airport and designated offices. This streamlined approach simplifies the process for travelers, allowing for hassle-free financial transactions while in Russia.

    These alternative methods of payment and currency importation serve as vital lifelines for individuals navigating the complexities of financial transactions in the absence of major international card networks. By understanding and utilizing these options effectively, travelers and business people alike can navigate the evolving financial landscape of Russia with confidence and ease.

    (Source: Russia Beyond)

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    Sunday, December 29, 2024
    Will India manage to make a major trade mark in Russia?

    Indian exports to Russia declined 14% to $2.2 billion in April to December 2022, primarily due to logistical problems created by payment disruptions. The trade imbalance between the two countries would further delay efforts to switch contracts to local currencies.

    Indian Prime Minister Narendra Modi and Russian President Vladimir Putin share cordial relations and converse regularly, most recently a week ago, all the while trying to infuse a momentum into their bilateral relations, particularly the trade partnership.

    Their commitment to the special and privileged strategic partnership between the two nations saw them “chalk out a roadmap for future initiatives,” Mr Modi said which, India’s foreign ministry elaborated, includes expanding military and technical cooperation, including modern weaponry manufacturing, discussed when Indian Foreign Minister Subrahmanyam Jaishankar met his Russian counterpart Sergei Lavrov in Moscow last month.

    While both New Delhi and Moscow appear eager to provide economic heft to their partnership beyond these traditional areas, the path to enhanced commerce is not proceeding as smoothly as both establishments would like. This is despite the spurt in the bilateral volume of trade since Russia’s conflict with Ukraine began two years ago, leaving Russia facing massive sanctions and cut off from its main energy market in Europe.

    Russia became India's fourth largest source of imports in 2022, driven by the energy trade boom, as a near insatiable India absorbed energy exports redirected from Europe, going on to import 17% of its crude oil and 9% of its coal from Russia, at hefty discounts. India’s fertilizer imports also rose to $2.1 billion in 2022, from $376 million in 2021, according to India’s Directorate General of Foreign Trade. In fact, Russian exports to India grew almost fivefold, to $32.8 billion in April-December 2022, from $6.6 billion the previous year. The problem lies in the fact that Russian imports far outweigh Indian exports to Russia.

    Beyond energy security, including nuclear energy sufficiency, food security has emerged as another area of enhanced cooperation, as Russian fertilisers, agricultural appliances and Indian demand for sunflower and soybean oil and legumes have added to India’s import bill.

    However, for Indians wishing to trade with Russia, the situation is more complicated and, analysts said, likely to remain at a government to government level for more time. India's trade deficit with Russia has rapidly burgeoned, as its exports lag far behind imports. Indian exports to Russia declined 14% to $2.2 billion in April to December 2022. This was primarily because of logistical problems, created by payment disruptions as, post-sanctions, Russia is now mostly cut off from international payment systems, making trade settlements longer and more convoluted.

    Analysts and officials say this trade imbalance would further delay efforts to switch contracts to local currencies, despite both governments being willing. To facilitate energy imports post-sanctions, the Reserve Bank of India set up, in July 2022, a new payment system to facilitate trade in Rupees. Media reports said, similarly, several Russian banks opened "Vostro" accounts with Indian banks.

    The continuing war in Ukraine, sanctions on Russia and geopolitical tensions remain major obstacles to enhanced Indian exports to Russia, along with the absence of enthusiasm in India’s private sector entities. The threat of secondary sanctions and penalties imposed on third country actors doing business with sanctioned organizations obviously discourages Indian private companies from actively pursuing trade with Russian entities.

    While India benefits from access to cheaper Russian commodities, analysts point out that there is a marked difference between government expressions of interest and Indian private entities doing business on the ground in Russia. Additionally, transport, safety and the time taken for Indian exports to reach Russia, with hostilities having erupted across the Middle East, further discourage private sector players from seriously investing in Russia. The International North-South Transport Corridor (INSTC), which passes through Azerbaijan and Iran and would drastically cut transport time, thereby allowing enhanced volumes of freight, is still far from ready.

    Refusing to be discouraged and to take their trade to the next level, both countries are working on options to boost bilateral trade, including deciding to facilitate movement of freight by using a new water route, the Northern Sea Shipping route. This route is among the safest routes for goods transport and the shortest route connecting East Asia and Europe.

    India is now among the top 10 suppliers of pharmaceutical products to the Russian market. Restrictions on supplies of such products from the European Union and the U.S. have given Indian companies new opportunities. Russian imports of pharmaceutical products grew by 16% $16 billion in 2022, from $14 billion in 2021, according to Russian customs data.

    The Russian government and businesses require machinery, equipment and spare parts, including for the automobile and civil aviation sectors and IT and electronics products, to substitute for a lack of western imports. Opportunities to further diversify into a wider range of products have not been very successful yet. The Indian services sector and Indian lifestyle products and services, along with gems and jewellery, handlooms and clothing and footwear manufacture remain areas with potential, but whether the Russian market is ready to look away from the West towards India remains unclear. Despite the multiple geostrategic dangers since 2022, both countries have managed to maintain and even improve their trade relations, crossing a mark of $18 billion in just six months in 2022.

    Geopolitical and strategic considerations do impact Indian trade with Russia, which is seen as drawing closer to China after western sanctions. China remains the largest market for Russian oil and is a major market for Russian defence hardware, naturally increasing Indian concerns. While enhanced trade with and increased economic involvement in India would certainly help Russia remain not solely dependent on China, all the alignments for enhanced trade have not yet taken off to attain cosmic volumes.

    By Nilova Roy Chaudhury

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    Friday, December 27, 2024
    Eastward Bound: Navigating Russia's Opportunities – A Monthly Window with 'Russia Perspectives

    Russia's financial alienation has created new opportunities, with the Russian luxury market booming and Chinese car manufacturers dominating the market. Indian businesses should take advantage of the growing trade between India and Russia, as the two countries share a trusted partnership.

    I would like to introduce "Russia Perspectives’’—this new online supplement —which aims to be a window into Russia today. Peter the Great had built St. Petersburg—one of the most beautiful cities in Russia—as a window to the West. In 2022, this window was boarded shut and Russia was slapped with over 18000 financial sanctions. Yet, the country has withstood this financial alienation and life continues as usual.

    Every window that shuts, opens another one. Every crisis brings new opportunities. Big brands have quit Russia, but their leaving has opened up space for many more. Since 2022, neighbouring countries have stepped into take advantage of the situation. The Russian luxury market is booming. Russian retailers are now allowed to import any product from any market without the trademark owner’s consent. Products originally meant for countries such as Belarus, Armenia, Kazakhstan and Kyrgyzstan end up in Russian stores.

    China, so far, has chosen this time to enhance economic ties with Russia. Trade between Russia and China surpassed 200 billion dollars in the first 11 months of 2023, a level the countries had not expected to reach until 2024. One of the biggest winners have been Chinese car manufacturers. Chinese carmakers now have a lion’s share of 55 percent of the Russian market, according to GlobalData Automotive. China had 8 percent in 2021. The quick expansion of China in the Russian car market, shows just how much potential there is to grow.

    The window Peter built for the West has been boarded up and now Russia is looking East. It is an exciting time in Russia-- a golden period for expansion and one that Indian business should take advantage of. The trade between the two countries reached 50 billion dollars in 2023. Small and medium businesses can step and find new pastures. "We believe that this is something whose potential is now only beginning to be visible," said Minister of External Affairs S. Jaishankar on his visit to Moscow in December.

    There are many opportunities for Indian business from retail to even hospitality. Russia holds great promise for business in India—especially with the size of the market—but it has often not been seen as easy to navigate. This is where Russia Perspective comes in—the online supplement hopes to offer Indian business a view from Russia.

    The time is right to explore the Russian market, especially as India is a trusted partner. And India-Russia relationship is "the only constant in global politics,’’ as Minister Jaishankar put it. If Raj Kapoor wore his lal topi Russi, as a mark of friendship, the new generation of Russians are expanding their horizons by watching movies like Pushpa. The movie when released in Russia made 10 million rubles in the first 25 days. There are many new opportunities waiting for India and Indians.

    The supplement will offer an in-depth, unbiased view on Russia so that India and Russia trade links become deeper. A monthly affair, the supplement will have analysis/stories/ reports to help Indian business understand the potential Russia holds. I am confident that the Russian economy will continue to grow and the sanctions imposed will make the country more resilient. As an Indian who has found his feet in Russia, this is my small effort to help other Indians to open doors to new opportunities.

    Each month, there renowned authors and analysts will be invited to write in these pages to make this supplement relevant. I hope that, we will be able to give an alternative narration of Russia' s realities. India so far has only been reading a one-sided story reflected through the prism of the West. I must, however, clarify that the aim of the supplement is not political but to give the other side of the coin

    That's why I request the readers to give us their feedback and suggestions.

    Moreover, if anyone (readers) requires any detailed analysis/reports we shall be happy to help.

    Devdathan Nair, dathan.nair@ric.media

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    Tuesday, December 31, 2024
    Welcoming remarks by Ambassador of Russia to India Denis Alipov for the Russian Perspectives – Russia Digest journal

    Ambassador Denis Alipov's welcoming remarks celebrate the strong Russia-India partnership, highlighting their shared values, expanding cooperation across various sectors, and expressing hope for the success of the newly established Russian Perspectives – Russia Digest journal.

    Dear Readers,

    Hereby I wholeheartedly congratulate the people of friendly India on the solemn occasion of the Republic Day and welcome you to the first edition of the Russian Perspectives – Russia Digest journal in 2024 by The Times Group!

    Impressive achievements of modern India as the fastest growing innovative economy and a well-reputed global player solidly rest on the civilizational wisdom and mature democratic institutions as well as human-centric Indian philosophy that are so harmoniously epitomized in the Constitution.

    The values of sovereignty and national interests have become a notable brand of India’s independent foreign policy. India’s increasing influence in the world affairs combined with the consistent and responsible approach to vital issues of peace and security and equitable and sustainable development based on the central role of the UN and the principles of the UN Charter are making a defining contribution to the promotion of an inclusive international dialogue.

    Russia as a true and historic well-wisher of the people of India cherishes the trusted, comprehensive and ever-expanding bilateral cooperation that enjoys the level of special and privileged strategic partnership. Our like-minded positions on pressing global challenges make it a rock-solid integral part of a stable, just and equal world order. Our common approach to the reform of global governance is the case in point in our close coordination in major multilateral institutions, including the G20, BRICS, the SCO and other fora, where we together with other partners stand united to ensure a rising profile of developing countries and respect of their interests. Through the advancement of our shared goals we strive to create a favorable environment for mutually beneficial cooperation and well-being of the people of our proud nations.

    Against this background, the unstoppable growth trajectory of our multifaceted ties is an undeniable factor for our nations to progress. Our dialogue is well structured, elaborately institutionalized and extensively diverse but, most importantly, it is cemented by the credit of traditional national consensus and mutual goodwill. Ours is the partnership genuinely immune from negative external influence.

    Our joint and unparalleled endeavours in trade and investments, hydrocarbon energy and nuclear power, security and space, science and high-tech, digitalization and innovations, infrastructure and smart-cities, education, culture and vibrant people-to-people interaction make us natural and leading partners in the above and other areas. Russia contributes to India’s energy security and its defence capabilities, together we make dedicated efforts to a greater connectivity in the Eurasian space.

    We are committed to take our partnership forward through bilateral and multilateral endeavours such as an early conclusion of the FTA between the Eurasian Economic Union and India, efficient promotion of the North-South Transport Corridor and relaunching of the Vladivostok – Chennai Eastern Maritime Corridor, strengthening of the independent inter-banking networks, synchronization of customs regimes, multiplication of joint ventures, expansion of tourism and educational linkages.

    2024 will be rich of many prominent events designed to deepen the dialogue between Russia and India in various bilateral and multilateral formats, including during Russia’s presidency in BRICS, for the best of interests of our two friendly nations. I do hope that the newly established journal will become a reliable source of information and motivation for everyone who wants to be a party to our never-ending success story.

    On the occasion of the Republic Day, I wish the Indian people the best of health, well-being and prosperity! Jai Hind, Jai Rus!

    By Denis Alipov, Russian Ambassador to the Republic of India

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    Tuesday, December 31, 2024
    5 oldest Russian companies whose goods are still in high demand

    For centuries, Russian craftsmanship has captivated hearts around the world with its timeless elegance and exquisite quality. From delicate porcelain to sumptuous chocolates, these treasures from Russian companies continue to enchant and delight discerning connoisseurs, transcending borders and generations.

    Imperial Porcelain Factory: Renowned for its opulent sets, the Imperial Porcelain Factory traces its origins back to 1744. Established during the era of Tsarist Russia, it embodies a legacy of unparalleled artistry and craftsmanship, cherished by collectors worldwide. The factory's founder, Dmitry Vinogradov, was a visionary chemist who revolutionized porcelain production, creating compositions, glazes, and paints that adorned the tables of Russian royalty. Over the years, the factory has evolved, but its commitment to excellence remains unwavering, evident in the intricate designs and impeccable quality of its creations.

    Pavlovsky Posad Kerchief Manufacture: The vibrant hues and intricate floral designs of Pavlovsky Posad shawls evoke a sense of tradition and luxury. Rooted in a heritage dating back to 1795, these iconic kerchiefs are not just fashion statements but also cherished symbols of Russian culture. Each shawl tells a story, with motifs inspired by nature, folklore, and centuries-old traditions. From the black, burgundy, and unbleached linen classics to the expanded palette of modern designs, Pavlovsky Posad kerchiefs continue to captivate with their timeless beauty and craftsmanship.

    Babayevsky Confectioners: Sweet memories are woven into the fabric of Russian childhoods through Babayevsky chocolates. With origins dating back to 1804, this storied confectionery delights young and old alike with its whimsical treats and timeless flavours. From the iconic "Mishka kosolapy" ("Clumsy bear") to the nostalgic "Belochka" ("Squirrel"), Babayevsky chocolates evoke a sense of joy and indulgence that transcends generations. With each bite, one is transported to a world of sweetness and nostalgia, where every confection tells a tale of tradition and craftsmanship.

    Red October: From the imperial courts to modern-day indulgence, Red October chocolates have remained a symbol of decadence and delight. Founded in 1851 and rechristened after the October Revolution, this iconic chocolate factory continues to weave magic with every bite. Its trademark candies, including ’Alyonka,’ ‘Krasnaya shapochka’ (Red Riding Hood), and ‘Rakovye sheyki’ (Crayfish tails), are beloved by generations of Russians and esteemed guests alike. With each confection crafted to perfection, Red October chocolates are a testament to the enduring legacy of Russian confectionery craftsmanship.

    Imperial Tula Arms Factory: With a history dating back to 1712, the Imperial Tula Arms Factory stands as a testament to Russian ingenuity and craftsmanship in the realm of weaponry. From rifles to anti-tank guided missiles, it blends tradition with innovation to produce arms of unparalleled quality. Beyond its military prowess, the factory also produces unique pieces of art, with facets cut into metal that showcase the skill and precision of its craftsmen.

    Through the centuries, these Russian companies have crafted treasures that transcend time and geography, enchanting generations with their beauty and craftsmanship.

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    Tuesday, December 31, 2024
    How a foreigner can bring money & pay in Russia in 2024

    Since mid-2022, the landscape of financial transactions in Russia has undergone significant upheaval as major international financial institutions, including Visa, MasterCard, and American Express, suspended their operations in the country. As a result, the use of these cards for payments or cash withdrawals became untenable, compelling both tourists and businesspeople to explore alternative methods of payment and currency importation.

    Currency Import: Travelers to Russia are permitted to bring various currencies into the country, with amounts up to $10,000 exempt from declaration requirements. However, any sums exceeding this threshold must be declared, and amounts surpassing $100,000 necessitate an explanation of the funds' origin. Failure to comply with these regulations can result in severe penalties, including confiscation of funds and potential criminal repercussions. It's important to note that these regulations apply equally to both air and land borders, underscoring the importance of adherence to customs procedures.

    Opening a Bank Account: For those seeking to conduct financial transactions within Russia, the option of opening a bank account presents itself as a viable alternative. Foreigners are permitted to open accounts in Russian banks, typically transacting in major currencies such as dollars or euros. However, the process requires specific documentation, including a passport, notarized translation, and visa or migration card. Notably, since July 2023, citizens of certain countries have been able to submit these documents remotely, streamlining the account opening process.

    Financial Services: In lieu of traditional banking methods, various financial services have emerged to facilitate money transfers to Russia. Platforms like Koronapay and Unistream offer convenient options for transferring funds, albeit with limitations on sending countries and associated transfer fees. Similarly, YooMoney provides a unique solution by issuing free MIR debit cards to foreign tourists, enabling currency exchange and deposits at select locations such as Sheremetyevo airport and designated offices. This streamlined approach simplifies the process for travelers, allowing for hassle-free financial transactions while in Russia.

    These alternative methods of payment and currency importation serve as vital lifelines for individuals navigating the complexities of financial transactions in the absence of major international card networks. By understanding and utilizing these options effectively, travelers and business people alike can navigate the evolving financial landscape of Russia with confidence and ease.

    (Source: Russia Beyond)

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    Wednesday, December 25, 2024
    India-Russia Economic Ties

    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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    Sunday, December 22, 2024
    Seizing Opportunities: A Guide to Thriving Amidst Russian Sanctions

    Navigating the intricate web of economic sanctions, Russia has embarked on a journey of opportunities, reshaping its economic landscape in ways that might surprise you, my esteemed colleague from India. As the world adapts to the new normal, nations, businesses, and individuals find themselves at a juncture where strategic thinking, innovation, and resilience can open doors to unforeseen possibilities.

    In the complex tapestry of global affairs, the imposition of sanctions on Russia has created a seismic shift, prompting nations to reevaluate their economic strategies. I want to share some fascinating insights into how Russia is navigating through economic sanctions. It's like a chess game, and unexpected opportunities have emerged in the midst of challenges.

    Firstly, the local industries have become the unsung heroes of this transformation. With global ties strained, Russia is championing self-sufficiency. Industries across the spectrum, from manufacturing to technology, are thriving on domestic soil, ushering in a new era of resilience and adaptability. Tech is where the real magic is happening. Faced with limitations, Russian innovators are not merely filling gaps but rather creating a homegrown tech renaissance. Artificial intelligence, cybersecurity, and green technologies are taking centre stage, positioning Russia as a potential player in the global tech arena.

    An emphasis on education and skill development provides a unique advantage for businessmen in times of sanctions. The export of skilled professionals to nations grappling with talent shortages creates new revenue streams. It is time to establish consultancy firms, training centres, and skill development initiatives that cater to global industry needs. This not only contributes to the development of the global workforce but also enhances positions as providers of high-quality human capital.

    Energy, traditionally synonymous with fossil fuels, is experiencing a paradigm shift. Russia is diversifying its energy portfolio, investing heavily in renewable sources such as solar, wind, and hydroelectric power. This strategic move not only aligns with global environmental trends but also fortifies the nation against the volatility of traditional energy markets.

    The financial sector is undergoing a metamorphosis as well. In the face of banking restrictions, cryptocurrencies are emerging as a viable alternative. Blockchain technology, the backbone of cryptocurrencies, is being harnessed for secure and transparent financial transactions. This shift signifies not just adaptation but active participation in shaping the future of finance.

    As geopolitical dynamics reshape infrastructure projects globally, Indian businessmen can seize the moment by accelerating domestic infrastructure initiatives. Smart cities, transportation networks, and digital infrastructure projects not only boost the national economy but also position Indian entrepreneurs as pioneers in shaping the future of urban development. Collaborations with international players bring in expertise and capital, creating synergies that transcend geographical boundaries.

    Agriculture is experiencing a green revolution of its own. Sustainable and organic farming practices are gaining momentum as Russia redefines its agricultural landscape. The focus is not only on immediate food security but also on leading the charge in responsible and eco-conscious agriculture. Implementing advanced farming techniques, adopting sustainable agricultural practices, and investing in research and development can position these nations as reliable suppliers of agricultural products on the international stage. Collaborations with international agricultural research institutions can drive innovation and foster sustainable farming practices.

    Healthcare is emerging as a beacon of innovation. The imperative of self-sufficiency in pharmaceuticals has led to substantial investments in biotechnology and medical research. Russia is not just meeting healthcare needs; it is positioning itself as a pioneer in cutting-edge medical advancements.

    Culture is flourishing amid adversity. Restricted access to foreign content has sparked a renaissance in local art, literature, and media. Russia's creative scene is finding new admirers globally, showcasing a cultural heritage that is both profound and diverse.

    In conclusion, while economic sanctions bring undeniable challenges, Russia's response has been characterised by resilience, adaptability, and a proactive approach to shaping its economic future. The landscape is evolving, and the lessons learned during this transformative period may well set the stage for a new era of economic prominence. The challenges posed by sanctions become stepping stones for visionary businessmen to reshape industries, foster international collaborations, and write a compelling chapter in the saga of global entrepreneurship. As we witness these dynamic shifts, I extend my warm regards from Russia to India.

    So, generally, I can confidently say: to be continued. I'll be sharing updates on the situation and opportunities for Indian businesses. The journey ahead is challenging, but within it lies the promise of a brighter and more prosperous future for those who dare to seize the opportunities within the chaos.

    Olga Kharina, PhD, Associate Professor, HSE University

  • img
    Tuesday, December 24, 2024
    Heartfelt Congratulations on the Launch of the New Economic Supplement Showcasing Russia's Economic Landscape

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Industry

  • Russia and India: Towards New Horizons

    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

  • Bonds and barriers: Why Russia and India ties need more “Atmanirbhar”

    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

  • Empowering Minds, Inspiring Futures: HSE University

    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.

  • India-Russia Economic Ties

    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

  • Heartfelt Congratulations on the Launch of the New Economic Supplement Showcasing Russia's Economic Landscape

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Innovations

  • India- Russia relations: The importance of a Resilient Friendship

    Prime Minister Narendra Modi’s telephone conversation with President Vladimir Putin, on 15 January 2024 sent the important signal that communication between the two leaders is as robust as ever, setting the tone for pursuing the key priorities in our strategic partnership and the bilateral summit that is planned for this year.

    The year 2023 ended with the successful five-day visit of External Affairs Minister Dr S. Jaishankar to Moscow and St Petersburg, the highlight of which was the call by EAM on President Putin. A message from Prime Minister Modi was handed over to the Russian President. Against the background of a crisis-ridden international situation, with the Russia-Ukraine conflict in its second year and raging conflicts in the Middle East, it was important for both sides to exchange notes and to coordinate positions. Russia was appreciative that under India’s Presidency the G20 summit adopted a statement that took into Russian sensitivities. The document included PM Modi’s reference made earlier at the Samarkand meeting with President Putin, that this was not an era of war.

    Bilateral trade has increased to record levels. Though estimates put it above 50 billion USD, considering trade through third countries it is reported the figure may be higher than 60 billion USD. This is mostly due of the rise in Indian imports of Russian crude, making Russia the top energy supplier to India. While the trend is upward, it is may also be temporary as it is dependent on discounted prices driven by Russia’s current geopolitical circumstances. Both sides can give a more permanent shape to these energy links in the spirit of long-term partnerships- but projects of such scale will require a commitment to insulate such projects from the uncertainties of geopolitics. It will also be test of whether India and Russia can withstand international pressures when bilateral cooperation projects of such critical importance are involved.

    This also applies to the inventory management of Russian origin defence spares and supplies with our armed forces. For Russia it is a test of its commitment to engage in Make-in-India defence projects for the Indian market and for third country exports. Both countries need to look at nuclear cooperation beyond the Kudankulam NPPs by establishing joint ventures in small modular nuclear reactor (SMR) technology – Russia currently is only country which has an operational SMR. Russia has partnered with India in training astronauts for our Gaganyan programme.

    Western sanctions on Russia created huge challenges but the expected collapse of its economy did not materialize. This created opportunities for countries capable and interested in occupying the market space in Russia vacated by western firms. Companies from China, Turkey, Central Asia, and the Gulf have moved in. Indian companies have tended to be cautious even in areas of economic activities outside the scope of western sanctions. This is partly due to lack of information but also due to persistent hurdles, despite remedial efforts by the Indian and Russian Governments, of inadequate bilateral banking channels. Physical connectivity is also problematic – no Indian carrier flies now to Moscow and trade and transit routes remain expensive and time-consuming.

    Recent disruptions in maritime shipping through the Red Sea have once again underlined the importance of pushing the INSTC through Iran and Chennai Vladivostok EMC to their full potential. Russia is now a major long-term supplier of fertilizers and coking coal. Indian manpower exports can contribute to the Russian economy which now faces a critical demographic shortage. Russia can benefit from investing in India which is now poised to be for the next decade amongst the fastest growing economies globally. For Russia, there is no other country like India which is both friendly and which offers a secure and profitable investment destination.

    This is clearly an era of prolonged global instability. Hence the standard of ‘reasonable risk’ of doing international business and trade cannot be the same as that during the golden age of globalization. This is a test case for Indian companies as it is for their Russian partners. Implicit in multipolarity is the message that doing business like in a unipolar world is a self-imposed limitation that is not sustainable in the long term.

    To benefit from the strong legacy of friendly relations with Russia, there is need to think anew and act anew. Old mind sets and current hesitations will not work. Future resilience in our relations can be assured through forward-looking projects of mutual benefit. India and Russia have unique strengths- strong strategic convergences and a time-tested friendship backed by a strong public sentiment. But every era poses its own set of challenges which cannot be addressed through past sentiment alone. There is a need for new ideas and new drivers, taken forward not just by governments but the broader business community, technology experts and entrepreneurs - not cowed down by geopolitical change but instead having the appetite and the mind set to shape and profit from it.

    DB Venkatesh Varma, (former Ambassador of India to the Russian Federation 2018-21)

  • Will India manage to make a major trade mark in Russia?

    Indian exports to Russia declined 14% to $2.2 billion in April to December 2022, primarily due to logistical problems created by payment disruptions. The trade imbalance between the two countries would further delay efforts to switch contracts to local currencies.

    Indian Prime Minister Narendra Modi and Russian President Vladimir Putin share cordial relations and converse regularly, most recently a week ago, all the while trying to infuse a momentum into their bilateral relations, particularly the trade partnership.

    Their commitment to the special and privileged strategic partnership between the two nations saw them “chalk out a roadmap for future initiatives,” Mr Modi said which, India’s foreign ministry elaborated, includes expanding military and technical cooperation, including modern weaponry manufacturing, discussed when Indian Foreign Minister Subrahmanyam Jaishankar met his Russian counterpart Sergei Lavrov in Moscow last month.

    While both New Delhi and Moscow appear eager to provide economic heft to their partnership beyond these traditional areas, the path to enhanced commerce is not proceeding as smoothly as both establishments would like. This is despite the spurt in the bilateral volume of trade since Russia’s conflict with Ukraine began two years ago, leaving Russia facing massive sanctions and cut off from its main energy market in Europe.

    Russia became India's fourth largest source of imports in 2022, driven by the energy trade boom, as a near insatiable India absorbed energy exports redirected from Europe, going on to import 17% of its crude oil and 9% of its coal from Russia, at hefty discounts. India’s fertilizer imports also rose to $2.1 billion in 2022, from $376 million in 2021, according to India’s Directorate General of Foreign Trade. In fact, Russian exports to India grew almost fivefold, to $32.8 billion in April-December 2022, from $6.6 billion the previous year. The problem lies in the fact that Russian imports far outweigh Indian exports to Russia.

    Beyond energy security, including nuclear energy sufficiency, food security has emerged as another area of enhanced cooperation, as Russian fertilisers, agricultural appliances and Indian demand for sunflower and soybean oil and legumes have added to India’s import bill.

    However, for Indians wishing to trade with Russia, the situation is more complicated and, analysts said, likely to remain at a government to government level for more time. India's trade deficit with Russia has rapidly burgeoned, as its exports lag far behind imports. Indian exports to Russia declined 14% to $2.2 billion in April to December 2022. This was primarily because of logistical problems, created by payment disruptions as, post-sanctions, Russia is now mostly cut off from international payment systems, making trade settlements longer and more convoluted.

    Analysts and officials say this trade imbalance would further delay efforts to switch contracts to local currencies, despite both governments being willing. To facilitate energy imports post-sanctions, the Reserve Bank of India set up, in July 2022, a new payment system to facilitate trade in Rupees. Media reports said, similarly, several Russian banks opened "Vostro" accounts with Indian banks.

    The continuing war in Ukraine, sanctions on Russia and geopolitical tensions remain major obstacles to enhanced Indian exports to Russia, along with the absence of enthusiasm in India’s private sector entities. The threat of secondary sanctions and penalties imposed on third country actors doing business with sanctioned organizations obviously discourages Indian private companies from actively pursuing trade with Russian entities.

    While India benefits from access to cheaper Russian commodities, analysts point out that there is a marked difference between government expressions of interest and Indian private entities doing business on the ground in Russia. Additionally, transport, safety and the time taken for Indian exports to reach Russia, with hostilities having erupted across the Middle East, further discourage private sector players from seriously investing in Russia. The International North-South Transport Corridor (INSTC), which passes through Azerbaijan and Iran and would drastically cut transport time, thereby allowing enhanced volumes of freight, is still far from ready.

    Refusing to be discouraged and to take their trade to the next level, both countries are working on options to boost bilateral trade, including deciding to facilitate movement of freight by using a new water route, the Northern Sea Shipping route. This route is among the safest routes for goods transport and the shortest route connecting East Asia and Europe.

    India is now among the top 10 suppliers of pharmaceutical products to the Russian market. Restrictions on supplies of such products from the European Union and the U.S. have given Indian companies new opportunities. Russian imports of pharmaceutical products grew by 16% $16 billion in 2022, from $14 billion in 2021, according to Russian customs data.

    The Russian government and businesses require machinery, equipment and spare parts, including for the automobile and civil aviation sectors and IT and electronics products, to substitute for a lack of western imports. Opportunities to further diversify into a wider range of products have not been very successful yet. The Indian services sector and Indian lifestyle products and services, along with gems and jewellery, handlooms and clothing and footwear manufacture remain areas with potential, but whether the Russian market is ready to look away from the West towards India remains unclear. Despite the multiple geostrategic dangers since 2022, both countries have managed to maintain and even improve their trade relations, crossing a mark of $18 billion in just six months in 2022.

    Geopolitical and strategic considerations do impact Indian trade with Russia, which is seen as drawing closer to China after western sanctions. China remains the largest market for Russian oil and is a major market for Russian defence hardware, naturally increasing Indian concerns. While enhanced trade with and increased economic involvement in India would certainly help Russia remain not solely dependent on China, all the alignments for enhanced trade have not yet taken off to attain cosmic volumes.

    By Nilova Roy Chaudhury

  • Bonds and barriers: Why Russia and India ties need more “Atmanirbhar”

    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

  • Culinary dreams: Business success stories reshaping Russia's food scene

    In the bustling landscape of Russian public catering, amidst the backdrop of sanctions and the rise of local producers, the arena is rife with fierce competition. Yet, in this cauldron of culinary ambition, success knows no bounds for those with the audacity to seize it.

    Join us as we unravel these captivating stories, each a testament to the power of perseverance and the triumph of the human will. Through their stories, we are reminded that amidst the challenges of the present, the promise of a brighter future in Russia awaits those bold enough to seize it.

    Opened by a family from Omsk, the cafe has been a hotspot for all coffee lovers in the city. The cafe offers visitors a unique interior, following the Japandi style. The owners Sergey Rubin and Sofia Rasner wanted to provide their patrons with a simple open safe to unwind in the Russian weather. Drawing inspiration from the elegant fusion of Japanese and Scandinavian aesthetics, the design seamlessly incorporates authentic touches indigenous to the Russian locale.

    Initially, the founders decided to focus on their location and ambience instead of looking into the marketing of the cafe. Located in the centre of the city, the cafe saw a good amount of footfall from day one. On the very first day, they had more than 200 visitors, and this number only doubled the following day, exceeding their expectations.

    The quality of their coffee, the soothing ambience of their cafe, and the customer service created enough marketing for them through word of mouth. People started sharing pictures from the cafe online, prompting more and more people to visit the cafe.

    Rapid growth and impressive profits allowed the couple to open five coffee shops in Moscow within a year, and later – their training centre and workshop.

  • Unlocking new horizons: India-Russia visa-free travel agreement set to transform tourism landscape

    In spite of the longstanding friendly ties between Russia and India, the level of travel between the two countries has not reached its desired potential. However, with both nations offering rich cultural experiences, breathtaking vistas, and adventurous opportunities, there's a world of exploration waiting to be unlocked. Now, poised on the brink of a new chapter, talks have emerged regarding the easing of travel restrictions for Indians in Russia. Indians will soon be able to travel to Russia with more ease than ever before, making it the next destination on every travel enthusiast’s list.

    This potential breakthrough comes in the form of the Visa Free Group Travel Agreement, currently under negotiation between the two countries. Once finalised, Indians will gain access to Russia through designated visa-free groups, marking a significant shift in the dynamics of cross-border travel. Set to be finalised by the end of June 2024, the agreement draws inspiration from existing models with China and Iran.

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