“Our Foremost Priority”: Jaishankar Confronts the Harder Business of India-Russia Ties

The 27th IRIGC-TEC marks a more demanding chapter for a relationship that has already demonstrated considerable resilience. The question is no longer whether India and Russia can announce ambitious economic goals. They clearly can. The harder task is ensuring that those ambitions survive contact with customs counters, bank compliance desks, freight terminals and factory floors.

From the grand halls of Moscow to the distinctive precincts of commerce, India-Russia ties are gradually blurring the lines between symbolism and substance. Moscow has long been a city of political symbolism for New Delhi. Jaishankar’s latest visit gave it a different role, that of a laboratory for economic pragmatism.

The setting was the 27th Session of the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC), co-chaired by External Affairs Minister S Jaishankar and Russia’s First Deputy Prime Minister Denis Manturov. The language of the meeting remained diplomatic, but its underlying message was warmer. A partnership repeatedly described as “special and privileged” now has to prove its value in the less glamorous machinery of commerce. That machinery is already in motion.

India-Russia goods trade has surged more than fourfold in just five years, rising from roughly USD 13 billion in 2021-22 to nearly USD 60 billion in 2025-26. Yet the trade deficit has widened just as sharply, from about USD 6.6 billion to more than USD 50 billion over the same period. The relationship has clearly gained scale, but the harder task now is to turn that scale into balance.

The USD 100 Billion Question

The headline ambition of taking bilateral trade to USD 100 billion by 2030 sounds impressive, but the number itself should not be taken as the measure of success. If the additional trade simply reproduces the existing pattern of Indian energy imports rising faster than Indian exports, the target could become a larger version of the same structural imbalance.

Russia remains an overwhelmingly important economic partner within the wider Commonwealth of Independent States space. It accounted for about 95.7 percent of India’s total trade with the CIS region between April and October 2024, a striking reminder of how concentrated India’s commercial engagement remains in the post-Soviet market.

The central task, therefore, is, and has always been, diversification. Indian pharmaceuticals, chemicals, machinery, engineering goods and electrical equipment need deeper access to Russian consumers and industrial supply chains. Russian demand cannot remain primarily an outlet for Indian exports on paper while the commercial relationship is dominated by crude oil, fertilisers, minerals and metals moving in the opposite direction.

Russian officials have divulged that bilateral trade grew by 8 percent in the first half of 2026, even as both sides acknowledged the need to move beyond traditional energy and fertiliser flows. That is an encouraging sign, but it also reveals where the next phase of the relationship must concentrate. Growth now needs composition, not merely volume.

Market Access Will Decide Whether Ambition Becomes Commerce

For Indian companies, the Russian market is not opened simply because diplomats agree that it should be. A company confronting certification requirements, unfamiliar regulations or cumbersome customs procedures will calculate the cost of entry long before it calculates the political value of a bilateral partnership.

This is why Jaishankar emphasised market access more. Tariff reductions can help, but they cannot by themselves create a functioning commercial relationship. Businesses need rules they understand, procedures they can navigate and payment channels they can trust.

The India-Eurasian Economic Union Free Trade Agreement could become an important instrument in this regard. India and the Eurasian Economic Union signed the Terms of Reference for launching FTA negotiations in August 2025, taking the idea beyond exploratory conversations and into a formal negotiating framework.

But an agreement will matter only if it changes behaviour at the company level. The real test of a trade pact is not the ceremony surrounding its signing, but whether an Indian manufacturer finds it easier to sell in Russia six months later.

Sometimes a Bank Account Says More Than a Summit

The Special Rupee-Vostro mechanism is perhaps one of the most underappreciated symbols of the new India-Russia relationship. Created to keep commerce moving when conventional financial channels became harder to use, it represents a broader truth of modern geopolitics. A bank account can sometimes matter to bilateral relations almost as much as a summit statement.

It is crucial to understand that financial mechanisms must work in practice, not merely exist in policy documents. Businesses need settlements that are predictable and efficient, while banks must remain able to manage sanctions-related compliance risks. Currency conversion cannot become an obstacle large enough to discourage otherwise viable transactions.

This is where economic diplomacy becomes tangible, and India-Russia ties become more personal. Government-to-government confidence eventually has to become business-to-business confidence. Unless companies believe that a transaction can be completed without disproportionate uncertainty, alternative payment arrangements will remain an interesting institutional experiment rather than the foundation of a larger trading relationship.

A Corridor Is Useful Only If the Cargo Arrives

The highly anticipated International North-South Transport Corridor (INSTC), the Chennai-Vladivostok corridor and the Northern Sea Route carry immense potential, with their promise strong enough to nudge investors towards materialising long-held ideas. But promises alone do not lower freight costs, shorten transit times or make a route commercially viable.

The INSTC is particularly important because it offers India an alternative multimodal route into Eurasia, linking the Indian Ocean and Persian Gulf with the Caspian region before extending towards Russia and Europe. Its roughly 7,200-kilometre network could reshape the economics of movement between the two countries if it delivers what businesses actually need.

It promises competitive transit times, dependable customs coordination and manageable insurance costs. A corridor that looks impressive on a map but leaves exporters facing delays and unpredictable charges has limited commercial value. This is where connectivity projects must graduate from geopolitical vocabulary to commercial performance. India is simultaneously pursuing other major connectivity ambitions, including the India-Middle East-Europe Economic Corridor (IMEC).

IRIGC-TEC Needs Fewer Conversations and More Evidence

The most consequential shift in Jaishankar’s remarks might be more institutional than geopolitical. The IRIGC-TEC has existed since 1992 and has accumulated a wide network of Working Groups and Sub-Groups covering the breadth of bilateral economic cooperation.

Such institutional depth is useful, but it can also create a familiar diplomatic problem. A mechanism can become very good at discussing obstacles without becoming equally good at removing them.

Jaishankar’s call for Working Groups to identify deliverables before the next session points towards a more demanding standard. The commission should be judged by what changes between meetings. Has a customs bottleneck disappeared, has a payment channel become more usable, or has an investment moved from discussion to execution?

This is where economic diplomacy crosses the barrier between consultation and implementation. It is also where the credibility of the USD 100 billion target will eventually be established.

The Partnership Needs Companies at the Table

Regular engagement with Indian and Russian industry can make the IRIGC-TEC more responsive to the realities of commerce. The forthcoming hosting of INNOPROM in India offers another opportunity to push industrial partnerships, technology cooperation and investment closer to the centre of the relationship.

The Russian Business Centre in New Delhi can play a useful facilitating role here, particularly by connecting companies with commercial information and potential partners. The strongest India-Russia relationship would be the one in which governments need to intervene less because businesses have learned how to work together more.

It is a subtle but important change in how economic alliances mature. Political leaders create trust at the top. Companies give that trust economic weight at the bottom.

Beyond Oil Lies the Real Test of Resilience

Energy will remain indispensable to India-Russia economic relations, and there is little reason to pretend otherwise. But excessive dependence on energy imports has also become the clearest explanation for the trade deficit.

The answer is not to dismantle energy cooperation. It is to build enough economic activity around it that energy no longer defines the entire balance of the relationship.

Agriculture and pharmaceuticals offer immediate possibilities, while industrial equipment and automotive components could support a broader manufacturing relationship. Technology partnerships, nuclear power, metallurgy, railways and space cooperation can deepen the industrial base further.

Investment matters for the same reason. Russian capital in Indian energy, petrochemicals, banking and manufacturing can create production within India rather than simply adding another import transaction. Indian investment in Russian energy and pharmaceuticals can work in the opposite direction.

Talent mobility deserves greater attention too. Russia has skilled labour requirements in areas where India possesses considerable human capital, while Indian institutions can benefit from Russian scientific expertise. An economic partnership becomes considerably more resilient when knowledge and capability travel alongside goods.

Geopolitics Will Keep Testing the Commercial Architecture

It is important to keep the wider political backdrop of the third decade of the 21st century in view, because none of this unfolds in a geopolitical vacuum. Western sanctions have complicated banking, shipping, insurance and technology transactions involving Russia, while Indian companies now operate under compliance pressures that were far less pronounced before the Ukraine conflict.

At the same time, India’s economic engagement with the United States and Europe continues to deepen, while Russia has expanded its commercial orientation towards Asia, particularly China. Neither side can afford to build an economic strategy around a single external relationship, making flexibility more valuable than nostalgia.

India-Russia ties have survived profound changes in the international system because both countries have repeatedly found areas where their interests overlap. The next challenge is to institutionalise that adaptability in commerce. Governments can survive cumbersome procedures. Companies simply take their business elsewhere.

The 27th IRIGC-TEC therefore marks a more demanding chapter for a relationship that has already demonstrated considerable resilience. The question is no longer whether India and Russia can announce ambitious economic goals. They clearly can. The harder task is ensuring that those ambitions survive contact with customs counters, bank compliance desks, freight terminals and factory floors.