New Delhi: India’s trade partnership with Russia is gaining momentum despite mounting pressure from the United States, with Washington warning New Delhi to scale down its Russian oil imports. Even as former U.S. President Donald Trump claimed Prime Minister Narendra Modi assured him of reduced Russian oil purchases, India continues to strengthen economic and defence ties with Moscow.
Rising India–Russia Trade
India’s trade with Russia has reached record levels, with energy imports continuing to dominate. Nearly 90% of India’s purchases from Russia comprise mineral fuels, including crude oil, coal, and petroleum products. According to The Economic Times, mineral fuels accounted for over 56% of India’s imports in FY25 — underscoring Russia’s vital role in India’s energy security.
But the trade relationship now extends beyond oil. India’s non-energy exports to Russia — from machinery and pharmaceuticals to agricultural goods — are growing fast, reflecting a strategic effort to diversify exports and reduce dependence on any single market.
Exports of heavy industrial goods such as nuclear reactors, boilers, and machinery rose from $0.65 million in FY24 to $1.14 million in FY25. Pharmaceuticals, organic and inorganic chemicals, and electrical machinery also saw steady gains. Agricultural exports — particularly marine goods, fruits, and vegetables — surged sharply between April and August FY26.
Defence Cooperation on the Rise
India and Russia are also in advanced talks over a ₹10,000 crore deal to supply missiles for the Indian Air Force’s S-400 Sudarshan air defence systems. Sources told ANI that the proposal will be reviewed by the Defence Acquisition Council on October 23.
The S-400 has reportedly proven successful in Operation Sindoor, where it was used to down several Pakistani fighter and reconnaissance aircraft. India has already inducted three of the five S-400 squadrons, with negotiations ongoing for the remaining units. Discussions have also begun around acquiring the next-generation S-500 system and upgrades to BrahMos missiles ahead of Russian President Vladimir Putin’s expected visit to India in December.
Trump’s Warning and U.S. Tariff Shock
During a Diwali event, Donald Trump said that PM Modi “is not going to buy much oil from Russia” and expressed optimism about ending the Russia–Ukraine war. However, Modi offered no confirmation of such a commitment.
Meanwhile, the U.S. has imposed sweeping 50% tariffs on more than 60% of Indian exports — including textiles, gems, jewellery, marine goods, and leather. According to the Global Trade Research Initiative (GTRI), Indian exports to the U.S. fell 37.5% between May and September 2025.
Still, India’s overall export performance has remained resilient. The IMF’s World Economic Outlook (October 2025) projects India’s GDP growth at 6.6% for FY26, driven by strong domestic demand and expanding export diversification.
Diversification and Recovery
Despite tariff challenges, Indian exporters have quickly adapted by expanding into new regions. Exports to 24 countries — including Germany, the UAE, Vietnam, Brazil, and Nigeria — saw positive growth in the first half of FY26.
Electronics exports jumped 50.5%, rice exports surged 33.2%, and marine products rose 23.4% year-on-year in September 2025. Even the gems and jewellery sector managed modest gains.
However, labour-intensive industries such as textiles and garments remain under pressure, posting double-digit declines as small manufacturers struggle with higher costs and weaker demand.
The Bigger Picture
India’s strategic trade diversification is yielding early results. Exports in Q2 FY26 grew 9% year-on-year, reversing a 7% fall a year earlier. Imports also rose 4%, signaling a healthy rebound in trade activity.
While India’s trade deficit widened slightly to $155 billion in the first half of FY26, experts see the expansion of export destinations and product categories as a sign of long-term stability.
At the same time, India’s strengthening partnership with Russia — across energy, defence, and agriculture — highlights a new era in foreign trade strategy: one focused on self-reliance, geopolitical balance, and economic resilience amid global tensions.
Summary:
India’s approach marks a clear pivot — maintaining strategic autonomy while adapting to global disruptions. As Washington exerts economic pressure, New Delhi is responding not with retreat but with reinvention — building new markets, bolstering defence alliances, and protecting its economic interests in a shifting world order.
