Key Takeaways:
- Faced with Western sanctions, Russia is increasingly growing closer to China
- China, meanwhile, is poses a serious threat to India, Moscow’s traditional ally in Asia
- Strong bilateral ties between Moscow and Beijing is a serious concern for New Delhi
YEREVAN (CoinChapter.com) — Russia-India relations continue to grow strong amid the rapidly changing geopolitical developments. The war in Ukraine, and the damaging Western sanctions on the Kremlin, have brought the two countries even closer. However, these developments have also forced Vladimir Putin to forge closer ties with China, India’s top adversary.
The Indian Government describes bilateral ties with Russia as “a key pillar of India’s foreign policy”. New Delhi has always credited Moscow for playing a significant role in the country’s overall development and security.
Russia has been India’s main defense partner. Shunned by the West and facing aggression from neighboring China and Pakistan, New Delhi relied on Moscow to acquire a much-needed arsenal for its security needs. This partnership later changed from imports to joint research & development, joint production, and marketing of advanced defense technologies and systems.
Between 2013–17, Russia accounted for 64% of Indian arms imports. Although these numbers dropped to 45% in 2018-2022, Moscow still tops the list of Indian defense suppliers.
The decrease is partly due to Indian Government’s policy to ramp up indigenous defense manufacturing in the country. Moreover, competitors like France, which took over the United States to become the second-largest supplier to India, have reduced Indian reliance on Moscow.
Moreover, the Kremlin’s invasion of Ukraine has rendered it unable to continue its role as a major weapons exporter.
Although Indian Prime Minister Narendra Modi called for negotiations to end the war in Ukraine, he fell short of condemning Moscow for the invasion. India has also constantly abstained from UN resolutions that openly label Russia as an aggressor.
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China-Russia trade on the rise
Since it invaded Ukraine in February 2022, Moscow has grown close to China. Last year, trade between the two countries hit a record $190.27 billion. According to official data from Beijing, exports and imports from Russia in 2022 accounted for as much as 3% of the country’s total trade.
The trade turnover between Russia and China in 2022 increased year on year by 29.3%. Exports from Russia to China increased by 43.4%, reaching $114.15 billion.
Meanwhile, exports from China to Russia also jumped by 12.8% to $76.12 billion.
In 2023, the numbers are even more aggressive so far. China’s exports and imports with Russia in January-February doubled from a year earlier. While imports from Russia soared by 31.3% to $18.65 billion, Chinese exports to Russia jumped 19.8% in the same period, reaching a total of $15 billion.
In March 2023, Chinese President Xi Jinping visited Moscow. Following bilateral talks, his counterpart Vladimir Putin pledged to use the Chinese yuan instead of the US dollar to settle its trade with countries in Asia, Africa, and Latin America.
Russia has offered China and India crude oil at a 30% discount. Owing to this, Moscow overtook Saudi Arabia as the world’s top energy supplier in 2022.
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The China Problem in Russia-India Ties
The growing ties between Russia, India’s “longstanding and time-tested friend” and China, its strongest adversary, is a huge problem for New Delhi.
India-China ties are a mix of a love and hate affair. Bilateral trade between both countries grew year over year to reach $136.26 billion in 2022.
However, the two have been struck in a long dispute over the sovereignty of Aksai Chin (a part of the Pakistan-controlled Kashmir) and Arunachal Pradesh border regions. Each country claims the areas for itself. India has also raised objections to Beijing’s constant support for Pakistan and its investment in areas that violate the country’s territorial integrity.
Traditionally, India would have counted on Russian support to defend itself in case of an attack. However, with Russia increasing its dependence on Beijing, New Delhi is concerned.
Moscow may no longer be as ready to come to India’s defense as it did back in 1971, during the Indo-Pakistan War (Bangladesh liberation war).
“We have looked to Russia as a balancing power, but how useful can a Russia reduced to being a junior partner of China be to us? If our principal friend is helplessly dependent on our principal adversary, what’s the friendship worth?”
Indian opposition lawmaker Shashi Tharoor, who previously served as the Under-Secretary-General of the United Nations, wrote for The Week magazine.
Meanwhile, Indo-Russian trade continues to increase. Last month, Moscow’s share of New Delhi’s oil imports reached 34%. This is double the figure for Iraq, which is India’s traditional top supplier.
If Russia continues to give prominence to China, including promoting the yuan as an alternative to the USD, New Delhi might have to relook at its foreign policy.
