India And Russia Strengthen Energy And Defence Ties Amidst International Sanctions

India, a major buyer of Russian oil, sources nearly 40% of its energy from Moscow. Despite US and EU sanctions, Russia assures uninterrupted oil supplies to India. Russian officials highlighted a "very special mechanism" to bypass these restrictions. This mechanism was developed in response to measures imposed by the Donald Trump administration aimed at curbing energy trade.

The Vadinar refinery in Gujarat, co-owned by Rosneft and an investment consortium, remains unaffected by EU sanctions. This facility is India's second-largest single-site refinery with a capacity of 20 million metric tonnes annually. Rosneft holds a 49.13% stake in this refinery.

India-Russia Defence Partnership

Russia continues to be India's preferred defence partner. The recent hostilities between India and Pakistan served as a successful test for Russian weaponry like the S-400 air defence system. Roman Babushkin, chargé d'affaires, confirmed this during a media briefing.

India's use of the BrahMos missile and S-400 system during Operation Sindoor demonstrated their effectiveness. The operation targeted terrorist infrastructure in Pakistan following the Pahalgam terror attack on May 7.

Bilateral Trade and Economic Cooperation

India and Russia aim to boost bilateral trade to $100 billion by 2030, with current growth at about 10% annually. In 2024-25, trade reached $68.7 billion, though India's exports were only $4.88 billion. Babushkin acknowledged the need to address this trade imbalance.

"We need to reduce the trade imbalance," Babushkin stated, emphasizing efforts to remove trade barriers and enhance business interactions. He also mentioned plans for new logistics corridors and improved payment mechanisms.

Future Prospects and Strategic Developments

President Vladimir Putin is scheduled to visit India later this year for an annual summit with Prime Minister Narendra Modi. The agenda will cover trade, investments, energy cooperation, infrastructure, and nuclear power projects.

Russia is expected to contribute to India's Sudarshan Chakra air defence shield project announced by Modi on Independence Day. This system aims to protect cities and vital infrastructure by 2035.

The S-400 system is already integrated into India's air defence network. Babushkin noted that Russian equipment would likely play a role in advancing these systems further.

Despite criticism from Western nations over India's purchase of Russian military hardware, Babushkin reiterated Russia's status as India's "partner of choice" in defence matters.

The US plans to impose a 25% tariff on Indian exports starting August 28 due to Russian oil purchases. This will add to an existing reciprocal tariff of the same rate.

The officials acknowledged potential fluctuations in oil import prices due to Western tariffs and sanctions but indicated these would be subject to negotiation.

External Affairs Minister S Jaishankar recently visited Moscow for discussions with his counterpart Sergey Lavrov and co-chaired a meeting with Deputy Prime Minister Denis Manturov on various cooperation aspects between India and Russia.