Prime Minister Narendra Modi and Russian President Vladimir Putin are set to meet in New Delhi on Friday ahead of the BRICS Summit, with trade, investment and economic cooperation expected to feature prominently in their bilateral discussions.
The meeting comes at a crucial moment for India-Russia economic ties. Bilateral trade has surged to unprecedented levels in recent years, largely driven by India’s growing purchases of Russian crude oil. But beneath the headline numbers lies a persistent challenge: how to transform an oil-heavy relationship into a broader and more balanced economic partnership.
The two countries have also developed alternative payment mechanisms that have helped keep trade flowing despite Western sanctions and restrictions on conventional financial channels.
The immediate question facing New Delhi and Moscow is therefore not simply how to increase trade, but how to diversify it.
From $65.7 Billion to a $100-Billion Target
India-Russia merchandise trade reached an all-time high of $65.70 billion in 2023-24, according to the Ministry of External Affairs.
However, the figure highlighted a significant imbalance. India’s exports to Russia stood at just $4.26 billion, while imports from Russia reached $61.44 billion.
The imbalance widened sharply after the Ukraine conflict, as Indian refiners emerged as major buyers of discounted Russian crude.
According to an ORF analysis, bilateral trade rose further to $68.7 billion in FY2024-25, with crude oil accounting for around 80 per cent of India’s imports from Russia.
Russia has consequently become a critical energy supplier for India, while India has emerged as one of Russia’s most important major markets as Moscow’s trade with Western economies has faced sanctions and restrictions.
Yet both sides have acknowledged that the relationship cannot remain overwhelmingly dependent on oil.
During the 2024 India-Russia Annual Summit, Modi and Putin revised their bilateral trade target to $100 billion by 2030.
The challenge now is determining what will drive the next phase of growth.
The bilateral economic roadmap identifies several priorities, including reducing tariff and non-tariff barriers, addressing logistics bottlenecks, improving connectivity, facilitating payments and resolving insurance and reinsurance-related issues.
These issues are likely to be central to the upcoming Modi-Putin discussions.
The Bigger Challenge: What Will India Sell?
For India, simply increasing imports from Russia is not enough. A sustainable expansion in bilateral trade will require a substantial increase in Indian exports to the Russian market.
India’s major exports to Russia include pharmaceuticals, organic chemicals, electrical machinery, mechanical appliances, iron and steel.
Russia, meanwhile, supplies India with crude oil and petroleum products, fertilisers, minerals, precious stones and metals, among other commodities.
This has created a structural trade imbalance in which India purchases far more from Russia than it sells.
That imbalance also creates a financial challenge: how to efficiently manage the large rupee balances generated through India’s purchases from Russia.
Both countries have spent the past few years developing mechanisms to ensure that sanctions and restrictions on conventional dollar-based banking do not disrupt bilateral commerce.
The Rupee-Rouble Payment Push
Russia says 96 per cent of India-Russia commercial transactions are now conducted in national currencies.
During his December 2025 visit to India, Putin said the share of business deals conducted in national currencies had reached 96 per cent.
The development reflects how significantly India and Russia have reduced their dependence on traditional dollar-based payment channels for bilateral trade.
Sberbank’s India chief Ivan Nosov recently told Reuters that there were no major problems with financial settlements between India and Russia.
Reuters reported that 22 Russian and 17 Indian banks are participating in the bilateral payment infrastructure, with around 90 per cent of transactions being completed within 10 minutes.
Moscow, however, has been cautious about presenting the arrangement as an outright campaign against the US dollar.
Ahead of the BRICS Summit, Kremlin spokesman Dmitry Peskov said Russia does not seek “de-dollarisation” and remains open to different acceptable payment methods. He also argued that national currencies should not be used as political instruments.For India, the priority is less about replacing the dollar and more about ensuring that geopolitical tensions between Moscow and the West do not disrupt legitimate India-Russia trade.
Pharmaceuticals, Agriculture and Manufacturing
If bilateral trade is to cross the $100-billion mark by 2030 without increasing India’s dependence on Russian crude, Indian exports will have to expand substantially.
Pharmaceuticals are one of the most promising sectors. Agricultural products, engineering goods, machinery, chemicals, electronics and other manufactured products also offer significant opportunities.
The two governments have discussed expanding joint ventures and securing longer-term fertiliser supplies.
Their economic roadmap also focuses on improving connectivity and payment interoperability, including potential links between national payment and financial messaging systems.
Another major opportunity lies in investment.Russian companies already have significant interests in India’s oil and gas, petrochemical, banking, railway and steel sectors. Indian companies, meanwhile, have invested in Russian oil and gas and pharmaceutical businesses.This creates the possibility of moving beyond a traditional buyer-seller relationship towards greater joint production, investment and technology partnerships.
The BRICS Factor
The Modi-Putin meeting comes as India prepares to host the 2026 BRICS Summit in New Delhi.
Many of the economic issues being discussed bilaterally by India and Russia overlap with wider BRICS priorities, including alternative payment mechanisms, investment, connectivity and greater economic cooperation among emerging economies.BRICS has also expanded significantly beyond its original five members, with countries including Egypt, Ethiopia, Iran, Indonesia, Saudi Arabia and the UAE joining the grouping.
Its economic weight and diversity have consequently increased, although differences among member countries remain.
For India, however, BRICS is not simply about challenging Western financial systems.The BRICS framework continues to emphasise cooperation across three broad pillars: politics and security, economy and finance, and cultural and people-to-people exchanges. It also stresses mutual respect, equality, inclusiveness and consensus.
Russia, meanwhile, views BRICS as another platform through which economic cooperation with India can be expanded.Putin has previously highlighted logistics, financing and transaction processing as major obstacles to unlocking the full potential of Russia’s trade with India.In remarks reported on the Kremlin website, he pointed to the need to address the trade imbalance and explore ways to expand economic ties, including through BRICS mechanisms.
What Could Drive the Next Big Leap?
India and Russia have already addressed one of their most immediate challenges: keeping bilateral trade moving despite sanctions and restrictions affecting conventional payment channels.
The harder question is what the next $30 billion-plus in trade will actually look like.Defence cooperation, nuclear energy, fertilisers, pharmaceuticals, technology, critical minerals, investment and connectivity could all play a role.The upcoming talks are also expected to cover major strategic issues, including the Su-57 fifth-generation fighter programme and civilian nuclear projects.
For Russia, India represents a vast consumer market, a potential source of investment and a major strategic partner outside the Western bloc.
For India, Russia remains an important source of energy, defence equipment, nuclear technology and key commodities.The Modi-Putin meeting will therefore be closely watched not merely for announcements on existing trade, but for signs of whether the two countries can build a more diversified economic relationship—one that goes beyond Russian oil and towards trade, investment, technology and joint production.
The real test of the $100-billion target will not be how much India and Russia trade, but what they trade with each other.
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