Engineering, pharma, chemicals, agri hold huge potential for exports to Russia

New Delhi, Dec 3 (PTI) India's prospects for stronger exports to Moscow lie in sectors like engineering goods, pharmaceuticals, chemicals and agriculture where there is a large unmet demand in Russia, a government official said.

Besides these high-value sectors, labour-intensive industries such as textiles, apparel, leather goods, handicrafts, processed foods and light engineering too hold substantial promise given Russia's large consumer base and India's cost competitiveness.

Increasing exports from these sectors would help bridge the widening trade deficit with Russia, which stood at about USD 59 billion in the last fiscal.

Electronics and textiles currently have a market share below 1 per cent, yet demand is sizeable, offering space for scale if supported by stronger distribution networks.

India's next phase of export expansion to Russia hinges on a sharper alignment between India's globally competitive sectors and Russia's large, under-served import needs, the government official said.

"The most promising areas that mirror India's rising global strengths are engineering goods, pharmaceuticals, chemicals and agriculture, all of which correspond to substantial unmet demand in the Russian market," the official added.

India currently exports USD 452 million of products to Russia against their global import demand of about USD 4 billion. Engineering goods present one of the widest gaps with India exporting USD 90 million, while Moscow imports USD 2.8 billion in this segment, with growing room as Russia diversifies away from China.

Similarly, chemicals and plastics show a similar pattern, with India contributing USD 135 million to a demand of USD 4.06 billion.

Pharmaceuticals remain a strategic corridor too as India supplies USD 546 million, but Russia's pharma import bill touches USD 9.76 billion, making generics and APIs (active pharmaceutical ingredients) significant growth levers.

The bilateral trade between the countries will get a boost during the two-day visit of Russian President Vladimir Putinto India.

India and Russia are set to ink a number of agreements to enhance cooperation in an array of areas including trade and healthcare during the President's visit.

"India–Russia trade is moving from a narrow, energy-heavy engagement toward a more layered and resilient economic relationship. The next chapter depends on India's ability to deepen export penetration, especially in sectors where it has proven global competitiveness," the official added.

The country's exports to Russia have expanded steadily since the Covid pandemic, marking one of the fastest-growing bilateral trade lanes.

From USD 2.56 billion in 2020 to USD 4.92 billion in 2024, exports grew at a healthy pace even as Russia's overall trade pivoted toward Asia.

Russia accounts for 1.1 per cent of India's global exports.

The total trade has been growing steadily, with bilateral flows crossing USD 69.2 billion in 2024, up from USD 8.5 billion in 2020. Oil accounts for nearly 21 per cent of total India's imports of oil.

Beyond hydrocarbons, fertilizers and vegetable oils are other imported products.

On the other hand, India's share in Russia's import basket remains modest around 2.3 per cent.

Exports rose from USD 4.3 billion in FY24 to USD 4.9 billion in FY25.

The country's export basket include machinery (USD 367.8 million), pharmaceuticals (USD 246 million) and organic chemicals (USD 165.8 million) -- together accounting for most of the value in the first half of FY26.

Consumer-oriented and high-visibility categories remain marginal -- smartphones (USD 75.9 million), Vannamei shrimp (USD 75.7 million), meat (USD 63 million) and garments at just USD 20.94 million.

On the import side, it said dependence on Russian energy and commodities continues unabated.

India's imports stood at USD 63.2 billion in FY24 and inched up to USD 63.8 billion in FY25.

Petroleum dominates overwhelmingly, led by crude oil (USD 23.1 billion) and petroleum products (USD 2.5 billion), followed by coal (USD 1.9 billion).

Strategic inputs such as fertilisers (USD 1.3 billion) and food oils -- sunflower seed oil (USD 633 million) -- remain significant, while diamonds ( USD 202 million) add to the non-energy bill.

The bilateral trade relations are significant as India is facing a steep 50 per cent tariffs by the Trump administration and Russia facing western sanctions due to war with Ukraine. PTI RR CS RR ANU ANU