India-Russia merchandise trade reached an all-time high of $65.70 billion in 2023-24, according to the Ministry of External Affairs.
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 and economic cooperation expected to be at the heart of their bilateral discussions. But behind the headline numbers lies a more complicated challenge of turning a trade relationship dominated by Russian oil into a broader and more balanced economic partnership between India and Russia.
The stakes are high. Bilateral trade has already surged from traditional levels to tens of billions of dollars, but the relationship remains heavily skewed in Russia’s favour. At the same time, the two countries have built alternative payment channels that have insulated much of their commerce from Western financial restrictions.
The Modi-Putin meeting, therefore, comes at a moment when India-Russia trade has both unprecedented momentum and some very old problems to solve.
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. But the headline figure concealed a striking imbalance: Indian exports to Russia were worth only $4.26 billion, while imports from Russia stood at $61.44 billion. The gap widened further as Indian refiners became major buyers of Russian crude following the Ukraine war.
According to an ORF analysis, bilateral trade turnover reached $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 crucial source of energy for India, while India has become one of Russia’s most important large markets at a time when Moscow’s trade with Western economies has been constrained by sanctions.
Yet both sides have repeatedly said that the relationship cannot remain an oil-heavy one. During the 2024 India-Russia annual summit, PM Modi and Putin revised their bilateral trade target to $100 billion by 2030. The challenge now is figuring out what will fill that additional $30-billion-plus gap.
The official roadmap identifies several priorities: reducing tariff and non-tariff barriers, fixing logistics bottlenecks, improving connectivity, making payments smoother and resolving insurance and reinsurance issues.
This is what makes the upcoming talks particularly significant.
Not Just About Volume
There is a basic contradiction at the centre of India-Russia trade. The two countries want substantially more commerce, but India needs to sell more to Russia if that expansion is to be sustainable.
India’s major exports to Russia include pharmaceuticals, organic chemicals, electrical machinery, mechanical appliances, iron and steel. Russia, meanwhile, supplies India with oil and petroleum products, fertilisers, minerals, precious stones and metals, among other commodities.
The result is a relationship where India buys substantially more from Russia than it sells. That imbalance has also created a financial problem: what happens to the rupees generated when Russia sells goods to India?
The two countries have spent the past few years building mechanisms to ensure that sanctions and restrictions on conventional dollar-based banking do not disrupt trade. That system has now reached a remarkable scale.
The Rupee-Rouble System
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 in business deals has already reached 96 percent.”
The figure demonstrates how far the two sides have moved towards insulating bilateral commerce from the traditional dollar-based financial system.
More recently, Sberbank’s India chief Ivan Nosov told Reuters that there were now 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 completed within 10 minutes.
Yet, Moscow is careful about describing the process as an outright campaign against the 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. Peskov also argued that national currencies should not be used as political instruments.
For India, the objective is less about abandoning the dollar and more about ensuring that a geopolitical dispute between Moscow and the West does not shut down India’s legitimate trade with Russia.
What India Can Sell More Of
If India-Russia trade is to cross $100 billion by 2030 without becoming even more dependent on crude oil, India will need substantially greater access to the Russian market. Pharmaceuticals are an obvious candidate. So are agricultural products, engineering goods, machinery, chemicals, electronics and other manufactured products.
The two governments have also discussed joint ventures and longer-term fertiliser supplies. Their economic roadmap includes efforts to improve connectivity and payment interoperability, including links between national payment and financial messaging systems.
The bigger opportunity could be investment. Russian companies already have significant exposure to sectors such as oil and gas, petrochemicals, banking, railways and steel in India, while Indian companies have invested in Russian oil and gas and pharmaceutical businesses. The next phase could therefore be about moving from a buyer-seller relationship to a production-and-investment relationship.
The BRICS Dimension
The Modi-Putin meeting is taking place against the backdrop of India’s hosting of the 2026 BRICS summit in New Delhi.
The economic questions India and Russia are discussing bilaterally overlap with some of the broader questions being debated within BRICS: alternative payment mechanisms, greater economic cooperation, investment, connectivity and a larger role for emerging economies in global decision-making.
BRICS itself has expanded well beyond its original five members, bringing in countries including Egypt, Ethiopia, Iran, Indonesia, Saudi Arabia and the UAE. Its economic weight and diversity have consequently grown, even as differences among members remain.
For India, however, BRICS is not simply about challenging the West. The official BRICS framework continues to emphasise cooperation across three broad pillars – politics and security, economy and finance, and cultural and people-to-people exchanges – while stressing mutual respect, equality, inclusiveness and consensus.
Russia, meanwhile, sees BRICS as another avenue through which India-Russia economic ties can expand.
Putin has previously pointed to logistics, financing and transaction processing as major obstacles to unlocking the potential of Russia’s trade with India. In remarks reported on the Kremlin website, he said there was a need to address the “trade imbalance” and explore ways to expand economic ties, including through BRICS mechanisms.