India Russia trade relations were strong during the Soviet era. But The Soviet Union disintegrated in 1991 and this resulted in a slowdown of economic and
trading relationship between India and Russia.
In Russia an economic transformation took place changing it from a centrally planned economy to a market economy in 1992. A similar change took place in India as well when it became a liberalized economy. These changes in the nature of economy of both the countries was bound to change the
bilateral relationship between them.
Most of the 1990s were spent getting used to these changes and the
bilateral trade and economy between the two countries suffered. While in 1993-94 India exported US$649 million worth of goods in 2003-04 it came down to US $ 383 million. The present situation in both countries is favorable for a greater amount of trade for both have witnessed significant economic development - 6.9% in the case of Russia and 7% for India.
The relationship between India and Russia got a major boost when Russian president Putin visited India in 2002. They resolved to become strategic partners and increase
bilateral trade in all spheres of mutual interest. In 2006, it was announced that a target of US$ 10 billion for
Russia-India's bilateral trade was being aimed at. And this announcement was made by Russia's Minister for Economic development and Trade, Mr German Gef and India Minister of Commerce and Industry, Mr. Kamal Nath.
The major items exported by Russia to India are:
Spices, tea, coffee, and mate
Preparations of nuts, fruits, and vegetables
Prepared foodstuff
Tobacco and manufactured tobacco products
The major items imported by Russia from India are:
Cultured or natural pearls
Steel and iron
Fertilizers
Nickel and its by-products
Paper pulp, paper, and its by-products
Among the areas where India and Russia could go for further in terms of trade the IT sector is the most promising field, in which India is a leader. Internet use in Russia has increased to 22 million in 2005 from 4 million in 2000. So India can invest in this area – in e commerce, computerization of schools, offices, and post offices. They can cooperate in the business of diamond trade through direct trade. India can help Russia in building state of art gas and oil infrastructure.
