Get your free copy of Editor’s Digest
FT editor Roula Khalaf picks her favourite stories in this weekly newsletter.
Indian Prime Minister Narendra Modi is due to visit Russia to meet with Russian President Vladimir Putin as he seeks to strengthen ties with Moscow and stave off concerns about his administration’s tilt toward China.
PM Modi, who arrived in Moscow on Monday, hailed the two-day visit as a “great opportunity to deepen ties with Russia”.
Kremlin spokesman Dmitry Peskov said Western countries were “jealous… and with good reason” that Modi chose Russia for his first bilateral visit after winning a third five-year term in Indian elections last month.
The visit is also Modi’s first since Russia’s invasion of Ukraine in 2022. Russia has sought to rally countries such as India behind Putin’s vision of a Moscow-led “global majority” to challenge US hegemony.
India, meanwhile, has sought to avoid taking sides in the war in order to protect its decades-old ties with Russia, which is the country’s largest arms supplier and, since the conflict began, a key source of cheap oil.
Those ties have become especially important to New Delhi as Western sanctions imposed to isolate Russia have drawn Moscow closer to China. Beijing has provided Moscow with an economic lifeline, expanding bilateral trade to record levels and becoming a key supplier of Western-made parts to Russia for potential battlefield use.
“India wants to give Russia room to maneuver,” said Alexander Gabuev, director of the Carnegie Russia and Eurasia Center in Berlin. “India may not have the means to wean Russia off China, but it wants to give Russia as many chances as possible to stop it from betting all its money on China.”
India is also at odds with China along its disputed border in the Himalayas and considers Russia’s neutrality crucial to its national security, the officials said. “China is the biggest threat,” said Pankaj Saran, a former Indian ambassador to Russia. “Turning a friend into an enemy is simply not acceptable.”
India-Russia trade has surged to more than $65 billion since Moscow’s all-out invasion, driven mainly by a surge in discounted oil purchases. Russian oil accounted for 43% of India’s crude imports in June, making it the second-largest importer after China, according to data provider Vortexa.
“The two countries have agreed to cooperate with each other in the construction of a new plant in the country, and we will continue to cooperate with each other in the construction of a new plant in the country,” he said.
Sanctions have also complicated Russia’s ability to repatriate oil revenues due to the rupee’s low convertibility. The U.S. crackdown has forced banks to drastically cut back on business with Russian counterparties and restrict access to certain currencies, forcing traders to transact in rubles or even barter for goods, according to financiers involved in the trade.
The United States and EU have also stepped up efforts to target convoys transporting Russian crude, leaving buyers such as India exposed to possible future sanctions.
“Global banks will likely stay away from deals that could be subject to U.S. enforcement actions,” said Benjamin Hilgenstock of the Kyiv Institute of Economics. “The expansion of the tanker designation campaign could pose problems for Indian buyers.”
India and Russia are working on promoting domestic payments systems for trade, but implementing them on a large scale will be difficult due to limited capacity and the difficulty of converting rubles and rupees into dollars and euros, he added.
Some analysts said Modi’s visit was a cover for the fact that India is increasingly betting its future on economic and military cooperation with the West.
According to data from the Stockholm International Peace Research Institute, Russia’s share of India’s arms imports fell to its lowest in nearly 60 years between 2019 and 2023 as India sought more advanced military technology from countries such as the United States and Israel.
Kwatra said Modi would also express concern about dozens of his country’s citizens being unwittingly drafted into the Russian military to fight in Ukraine.
Carnegie’s Gabuev said Moscow’s arms industry’s growing reliance on Chinese supplies is creating new concerns for India, which fears that without Chinese supplies Moscow will not be able to maintain its weapons systems or sell new weapons to them.
“Key parts of the relationship are built on very fragile foundations,” said Pramit Pal Chaudhuri, head of South Asia at consultancy Eurasia Group. “I would argue this is a managed decline.”
