New Delhi: Steps such as increasing exports, making local currency trading workable and a free trade agreement with the Eurasian Economic Union will help boost trade between India and Russia, think tank GTRI said on Thursday.

India should not worry over the trade deficit, as it is getting crude petroleum oil at cheaper than market rates from Russia and it is also cutting India’s overall oil import bill, the Global Trade Research Initiative (GTRI) said. Since the Ukraine war began in February 2022 and the US imposed sanctions on Russia, the trade relationship between India and Russia has shifted significantly.

There has been a sharp increase in imports from Russia, resulting in a notable trade imbalance. Exports during the financial year 2020-21 and 2023-24 grew by 59 per cent, while imports surged by about 8,300 per cent, the report said, adding the trade deficit rose from $2.8 billion before the war in 2020-21 to $57.2 billion at present.

It said that the import surge is solely due to India’s strategic procurement of crude oil from Russia influenced by favourable trade terms and Russia’s need to find new markets amidst Western sanctions. During Prime Minister Narendra Modi’s Russia visit on July 8-9, India and Russia have set an ambitious bilateral trade target of $100 billion by 2030. With current bilateral trade at $65.7 billion in 2023-24, the target seems achievable, GTRI Founder Ajay Srivastava said. In 2023-24, India’s exports to Russia were 4.3 billion, while imports driven by crude oil stood at $61.4 billion.