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Growing trade between Russia and India opens a new era for Silk Road
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IANS | 02 Nov, 2022
According to the Observatory of Economic Complexity, a global trade
statistics platform, India increased monthly imports from Russia by 430
per cent compared to the five-year average.
The Ministry
of Industry and Trade of India reported that trade turnover between
Russia and India exceeded $18.2 billion in the first five months of the
fiscal year. The surge in trade between the two countries made Russia
the country's seventh largest trade partner, rising from 25th place with
a total trade turnover of $13.1 billion in 2021.
Of the total
bilateral trade from April to August, India's imports from Russia
totalled $17.2 billion, while Indian exports to Russia totalled $992.73
million.
The start of transportation along the International
North-South Transport Corridor (INSTC) and the partnership relations
established between the countries in recent years have largely
contributed to bilateral trade growth.
"Our economies are
increasingly benefitting from the interaction. The leadership of Prime
Minister Modi saw many achievements in recent years, and the trade
between our countries is growing. For example, Prime Minister Modi asked
me to supply more fertilisers, which are vital for Indian agriculture.
And we have done so. We increased our fertiliser exports to India by a
factor of 7.6. Not 7.6 per cent but 7.6 times," said Russian President
Vladimir Putin at the Valdai Club meeting.
He also mentioned that trade in agricultural commodities between the two countries has doubled.
"Indian
entrepreneurs should leverage the current situation in Europe to
strengthen trade ties with Russia," stated S. Adikesavan, former CEO of
the State Bank of India (SBI).
"After the West imposed
anti-Russian sanctions, trade turnover between Russia and India
increased. Trade in INR and RUB will help India reduce its dependence on
the US dollar," he explained.
Increased energy exports from
Russia have already allowed India to pursue its energy relief plan,
while trade growth has enabled the country to increase its GDP and
become a leader among the world's economies. The development of
international economic and transport corridors, such as the INSTC, is
crucial to these efforts.
Professor Agnieszka Kuszewska of the
Polish Institute of Middle and Far East, speaking at an international
conference on Central Asia in Bishkek, stated that the 7,200-km-long
INSTC serves as a geostrategic alternative to China's New Silk Road
stipulated by the Belt and Road Initiative.
According to the
professor, INSTC could potentially strengthen India's geostrategic
position in the region manifold, increasing its chances to counteract
China's expansionism, while cooperation with Iran and Central Asian
countries would allow Indian cargoes to bypass Pakistan.
The
growing role of the INSTC in trade between the two countries is driven
not only by the sanctions against Russia, but also by the change in
economic hubs.
According to Andrei Belousov, First Deputy Prime
Minister of the Russian Federation, the longitudinal transport
infrastructure between Russia and neighbouring countries no longer meets
global trends, as now the key role is played by latitudinal routes,
especially the North-South route. Belousov also believes that the
corridor could become a full-fledged competitor to the Suez Canal.
"By
2030, we expect to double the volumes of Russian cargo passing through
the INSTC, reaching 32 million tonnes as compared to the current 17
million tonnes. Furthermore, we have great hopes for the western route
that passes through Azerbaijan," said the First Deputy Prime Minister of
Russia.
"For Russia, the INSTC is a powerful, landmark trade
route that will bring us closer to Iran and India, the two key players
at this time. In the long term, India may prove to be a much bigger
strategic partner for us than China," suggested Konstantin Andrianov,
associate professor at the State University of Management, member of the
Russian Academy of Natural Sciences, and an expert at the Russian State
Duma.
According to the expert, India is currently the leader in
economic growth and has the potential to become the world's largest
economy, as it regularly outpaces even China's development.
Once
the INSTC is fully operational, India will be in a position to fully
meet its demand for energy, metals, and military equipment, cutting
delivery time and cost.
Moreover, the country would stand to
develop international collaboration in new and promising sectors and
industries, including aluminium, pharmaceuticals, and food exports.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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