EAM bats for trade in national currencies ahead of Russia meet

• Ahead of the 25th session of the India-Russia Inter-Governmental Commission meeting, External Affairs Minister S Jaishankar on Monday (November 11, 2024) said bilateral trade in national currencies is of “great importance”.

Highlights:

• India and Russia are gearing up for the 25th session of the India-Russia Inter-Governmental Commission in Mumbai, underscoring their evolving partnership. External Affairs Minister S. Jaishankar highlighted the criticality of bilateral trade in national currencies and expressed optimism about achieving a $100 billion trade volume by 2030.

Key Themes and Initiatives

Trade in National Currencies:

• Special Rupee Vostro Accounts: Currently functioning as an effective mechanism for settlements.
• Balancing Trade: Focus on achieving better trade balance through settlements in local currencies.
• Stemming from global multipolarity, this approach safeguards economic sovereignty.

Connectivity Projects:

• International North-South Transport Corridor (INSTC): Connecting India to Russia via Central Asia and Iran.
• Chennai-Vladivostok Corridor: Aimed at enhancing maritime trade links.
• Northern Maritime Route: Strategic for Arctic trade and shipping.

Ease of Doing Business:

• Customs Agreement: Bilateral deal signed in May 2024 between customs authorities for Authorized Economic Operators, streamlining trade processes.

Energy and Technology Cooperation:

• Post-2022, India expanded trade with Russia, particularly in energy and technology, despite Western sanctions.

Strategic Partnerships in Focus

Growing Bilateral Trade:

• 2023 saw record trade volumes, driven by shared goals and external pressures.
• Diversification of Trade: Emphasis on high-tech products to balance commodity-heavy trade structures.

Regional and Global Cooperation:

• At the BRICS Summit in Kazan, bilateral trade in local currencies emerged as a dominant theme, further echoed in the Kazan Declaration.

External Challenges and Resilience:

• Nineteen Indian entities faced U.S. Treasury sanctions for Russian trade. Both sides reaffirmed their commitment to sustaining economic and political cooperation.

New Developments

Russian Business Centre in India:

• Opening on November 12 in New Delhi, aimed at fostering ties between Russian and Indian business communities.
• Goals: Provide a platform for interaction and strengthen economic collaboration.
• Attendees include Russian Ambassador Denis Alipov and Sergey Cheremin, Head of Moscow’s Department of External Economic and International Relations.

High-Level Delegations:

• Russia’s First Deputy Prime Minister Denis Manturov leads the delegation, reaffirming cooperation in technology, energy, and healthcare.

Significance of the Partnership:

• Mutual Benefits: India and Russia’s economic ties are vital amidst shifting geopolitical alliances.
• Focus on Innovation: Diversifying trade toward high-tech products and balancing energy imports with exports.
• A Strategic Partnership: Deepened cooperation reflects shared resilience against external pressures and a commitment to multipolarity.

Prelims Takeaways

• BRICS summit
• India-Russia Business Forum
• Chennai-Vladivostok Corridor