Mumbai: External Affairs Minister S Jaishankar on Monday called for “urgent” measures to address the issue of widening trade deficit between India and Russia.
While India’s exports to Russia stood at only $2.24 billion in April-August this fiscal, imports soared to $27.35 billion during the period. The trade deficit is aggregated at $25.11 billion.
The high trade deficit is mainly on account crude imports. Russia emerged as India’s biggest supplier of crude oil, which is converted into fuels like petrol and diesel in refineries, after Russian oil was available on discount following some European nations shunning purchases from Moscow over its invasion of Ukraine in February 2022.
Addressing the India-Russia Business Forum here, Jaishankar also pitched for removal of non-tariff barriers and regulatory impediments to help improve the trade balance with Russia. “The balance of trade needs urgent redressal since it is so one-sided. It is imperative that non-tariff barriers and regulatory impediments are speedily addressed for this to happen,” he said.
The bilateral trade currently stands at $66 billion, and the goal of reaching $100 billion is “more than realistic”, he added.
Further, he advocated for mutual settlement of trade in the national currencies, especially in the “current circumstances”.
“Special Rupee Vostro Accounts are right now an effective mechanism. However, even in the short run, a better trade balance with national currency settlements is the answer,” he added. Jaishankar said the meeting between Prime Minister Narendra Modi and President Vladimir Putin at the Annual Summit in Moscow and last month in Kazan provided a “strategic direction”.
“A partnership between an India that has an 8 per cent growth rate for multiple decades ahead, and a Russia that is a key natural resources provider and a major technology leader will serve both of them and the world well,” he said.