India-Russia Bilateral Trade Set to Rise After BRICS 2024

The 16th BRICS Summit 2024, which is taking place in Kazan, Russia, from October 22 to 24, 2024, is a pivotal moment for the alliance, which now has ten members. Leaders from Brazil, Russia, India, China, South Africa, Ethiopia, Iran, Saudi Arabia, Egypt, and the United Arab Emirates, attended the summit. The BRICS countries have decided to investigate new financial infrastructures and increase trade using local currencies. They decided to start a BRICS reinsurance business and explore the viability of a separate cross-border settlement system. There will also be more development of the New Development Bank. The members placed a strong emphasis on inclusiveness in financial transactions and financial collaboration. As two prominent members of the BRICS alliance, India and Russia have been steadily expanding their import-export opportunities, paving the way for a prosperous future. Let's delve deeper into the dynamics of India-Russia bilateral trade and how BRICS SUMMIT 2024 is set to boost import-export trade activities between the two nations further.

What is BRICS?

• Brazil, Russia, India, China, and South Africa are the five main emerging national economies that are referred to as the BRICS.
• Origin: In 2001, British economist Jim O'Neill came up with the term "BRICS" to refer to emerging economies.
• Beginning in 2006, the organization had yearly meetings on the sidelines of the UNGA, and as a result of its success, official summits were held.
• Since 2009, the BRICS countries have gathered yearly for official summits.
• In 2010, South Africa became a member.
• BRICS expansion: The six new members of the BRICS are Saudi Arabia, the United Arab Emirates, Iran, Egypt, Argentina, and Ethiopia.
• It unites five of the world's greatest developing nations, which together account for about 41% of the world's population, 24% of its GDP, and 16% of its trade and commerce.

Key Trade Sectors and Industries in Focus at BRICS 2024

The BRICS Summit 2024 focused on major issues and trade sectors such as finance, technology, and food trade, enhancing the bloc’s membership. The other prominent industries receiving concentrated attention include technology, healthcare, renewable energy, and infrastructure development. With a professional lens, stakeholders in these sectors are poised to leverage strategic partnerships, innovative technologies, and sustainable practices to drive progress and enhance cross-border trade within the BRICS nations.

BRICS Nations and their GDP with Import-Export Data

• Brazil: $1.92 trillion (Brazil Imports: $252.7 billion, Brazil Exports: $339.7 billion) 

• Russia: $2.24 trillion (Imports: $303.8 billion, Exports: $423.9 billion)

• India: $3.39 trillion  (Imports: $672.2 billion, Exports: $431.6 billion)

• China: $17.96 trillion  (Imports: $2.6 trillion, Exports: $3.4 trillion)

• South Africa: $0.41 trillion  (Imports: $130.7 billion, Exports: $110.9 billion)

• Saudi Arabia: $1.92 trillion  (Imports: $211 billion, Exports: $322.3 billion)

• UAE: $0.51 trillion  (Imports: $448.7 billion, Exports: $487.8 billion)

• Egypt: $0.48 trillion  (Imports: $78.9 billion, Exports: $39.9 billion)

• Iran: $0.39 trillion  (Imports: $65.3 billion, Exports: $91.2 billion)

• Ethiopia: $0.31 trillion  (Ethiopia Imports: $17.9 billion, Ethiopia Exports: $3.6 billion)

India-Russia Bilateral Trade: A Strong Foundation

India and Russia have a long-standing history of trade relations, dating back to the Soviet era. According to the India-Russia trade data and Global trade data, India-Russia Bilateral Trade totaled $71.12 billion in 2023, i.e. the previous year of BRICS 2024. India and Russia's bilateral trade is predicted to reach $100 billion by 2030, with further growth anticipated in 2024 as per the bilateral trade data. Over the years, the two countries have built a strong foundation of mutual trust and cooperation, which has been instrumental in fostering robust import-export ties. The sectors of defense, energy, pharmaceuticals, and agriculture have traditionally been the key areas of collaboration between India and Russia, contributing significantly to their bilateral trade volume. As we approach BRICS 2024, India and Russia are poised to play a significant role in shaping the future of the bloc's import-export dynamics. With a combined population of over 1.5 billion and a GDP of over $6 trillion, India and Russia have the potential to drive growth and prosperity within BRICS through enhanced trade cooperation.

Where do India and Russia stand amongst all the BRICS Nations?

• According to global trade data for 2023, out of the 10 BRICS nations, India stands at the 17th position in terms of total goods exports ($431.6 billion), based on customs data and Russia export data, Russia stands at the 18th position in terms of total goods exports ($424.2 billion).
• Regarding Imports, India is the 8th biggest importer in terms of total goods imports ($672.2 billion), while Russia stands at the 23rd position in terms of total goods imports ($303.3 billion), out of all the 10 BRICS members, based on Russia import data. 
• Major exports made by India to other BRICS members in 2023 were Refined Petroleum Products ($3.6 billion), Iron Ore and Iron Products ($2.5 billion), Organic Chemicals ($1.7 billion), Pharmaceuticals ($1.6 billion), and Diamonds and Precious Stones ($1.5 billion).
• Major exports made by Russia to other BRICS members in 2023 include Mineral Fuels and Oils ($58 billion), Fertilizers ($8.5 billion), Iron and Steel ($6.2 billion), Precious Metals ($4.7 billion), and Coal ($5.0 billion).
• Both India and Russia are crucial in contributing to the economic and political agendas of BRICS, further solidifying their roles as key members of the bloc.

India Exports to Russia in 2023

India’s total Exports to Russia accounted for $4.05 billion in 2023, according to Russia import data and bilateral trade data. Nuclear Reactors and machinery followed by Pharmaceuticals were the biggest exports from India to Russia in the previous year. Let’s explore India’s top 10 exports to Russia in 2023, which Include:

1. Nuclear reactors and machinery (HS code 84): $576.71 million
2. Pharmaceutical products (HS code 30): $371.74 million
3. Organic chemicals (HS code 29): $323.78 million
4. Iron and steel (HS code 72): $322.18 million
5. Electrical machinery and equipment (HS code 85): $268.64 million
6. Inorganic chemicals (HS code 28): $208.90 million
7. Miscellaneous chemical products (HS code 38): $150.36 million
8. Fish and other aquatic invertebrates (HS code 03): $149.93 million
9. Optical, medical, or surgical instruments (HS code 90): $125.22 million
10. Ceramic products (HS code 69): $116.37 million

India Imports from Russia in 2023

India’s total imports from Russia totaled $67.07 billion in 2023, based on Russia export data and India-Russia trade data. India’s top 10 imports from Russia in 2023 include:

1. Mineral fuels and oils (HS code 27): $58.72 billion
2. Fertilizers (HS code 31): $2.62 billion
3. Precious stones and metals, pearls (HS code 71): $1.30 billion
4. Animal or vegetable fats and oils (HS code 15): $1.25 billion
5. Iron and steel (HS code 72): $924.02 million
6. Paper and paperboard (HS code 48): $605.16 million
7. Inorganic chemicals (HS code 28): $163.47 million
8. Nickel and articles thereof (HS code 75): $154.80 million
9. Nuclear reactors and machinery (HS code 84): $154.56 million
10. Salt, sulfur, lime, and cement (HS code 25): $145.99 million

India-Russia Bilateral Trade Data of the last 5 years

Russia's President Putin presents the BRICS grain trade plan

The establishment of a BRICS grain market, which might subsequently be extended to trade other significant commodities, was suggested by Russian President Vladimir Putin during the opening comments of the BRICS summit on Wednesday. The BRICS nations rank among the top producers and exporters of oilseeds, grains, and legumes worldwide. We suggest starting a BRICS grain exchange and trade in this context," Mr. Putin informed the leaders.

BRICS Summit 2024: A Catalyst for Growth

As we step into the year 2024, the BRICS alliance is poised to play a pivotal role in shaping the future of global trade. With India and Russia being integral members of this powerhouse grouping, BRICS 2024 presents a golden opportunity to further strengthen their import-export linkages. The collective strength of the BRICS nations, including Brazil, China, and South Africa, creates a conducive environment for fostering trade synergies and exploring new avenues of cooperation. 

BRICS COUNTRIES BILATERAL TRADE DATA

Let’s take a look at some of the important bilateral trade relations of BRICS nations involved in global import-export trade according to the Bilateral trade data:

India-China Trade Relations

One of the most notable trade relationships within the BRICS group is between India and China. In 2023, the total trade volume between India and China reached $138.16 billion. China is India's largest trading partner, with imports from China accounting for a substantial portion of India's total imports. On the other hand, India exports various products such as raw materials, pharmaceuticals, and agricultural produce to China. Despite occasional tensions between the two nations, their trade relationship continues to play a significant role in the global import-export trade data market.

Brazil-Russia Trade Relations

Brazil and Russia are another set of BRICS nations with notable bilateral trade relations. These countries share a common interest in commodities such as oil, gas, and agricultural products. In 2023, the total trade volume between Brazil and Russia amounted to $11.35 billion according to the Russia customs data and Brazil export data. Russia is a significant importer of Brazilian agricultural products, including soybeans, poultry, and beef. In return, Brazil imports machinery, fertilizers, and pharmaceuticals from Russia. This trade relationship has strengthened over the years, contributing to the economic growth of both nations.

Russia-China Trade Relations

Russia and China, two major economies with vast land resources, have also established robust bilateral trade relations. These countries have a shared interest in various sectors, including energy, technology, and manufacturing. In 2023, the total trade volume between Russia and China exceeded $239 billion. China is Russia's largest trading partner, importing a significant amount of Russian oil, gas, and minerals. In return, Russia imports electronics, machinery, and textiles from China.

South Africa-India Trade Relations

While not as prominent as other BRICS trade relationships, South Africa and India have also established significant bilateral trade ties. These countries share a history of cooperation in various sectors, including mining, healthcare, and information technology. In 2023, the total trade volume between South Africa and India amounted to $12.52 billion as per India-South Africa trade data. India is a major importer of South African minerals, including gold, platinum, and diamonds. South Africa is a top importer of pharmaceuticals, machinery, and textiles from India.

India-Russia Trade Relations: A Closer Look

India and Russia share a diverse trade portfolio encompassing a wide range of products and services. While India is renowned for its IT services, textiles, and agricultural produce, Russia boasts of its rich reserves of oil, natural gas, and minerals. The complementary nature of their economies makes them natural trading partners, with ample scope for enhancing collaboration in strategic sectors such as technology transfer, research, and development. 

In recent years, both India and Russia have been exploring avenues to reduce their dependence on the US dollar in bilateral trade transactions. The concept of de-dollarization trade has gained traction as a strategic move to insulate their economies from the fluctuations of the global currency market. In the context of the India-Russia trade, by conducting business in their local currencies or through barter agreements, India and Russia are aiming to minimize the impact of external factors on their import-export activities. 

BRICS 2024: A Win-Win Proposition for India-Russia Trade Relations

The BRICS platform offers a unique opportunity for India and Russia to leverage the collective market potential of the member countries. By aligning their trade policies and harmonizing regulations, the BRICS nations can create a conducive environment for greater trade facilitation and investment flows. The annual BRICS summits serve as a vital platform for dialogue and cooperation, enabling India and Russia to explore new avenues for expanding their import-export opportunities.

De-dollarization Trade: A Strategic Move

• Since Egypt, Ethiopia, Iran, and the United Arab Emirates joined the BRICS earlier this year, this is the first BRICS summit. Reducing dependency on the US dollar in foreign operations is one of the many items on the agenda. In terms of foreign exchange reserves and fuel commerce, we believe the bloc has the most opportunity to further its de-dollarization trade objective.  
• With 42% of the world's central bank foreign exchange reserves, BRICS+ is probably helping the world de-dollarize. The bloc's most promising substitute for the US dollar is gold. Gold still only makes up 10% of the central bank reserves of BRICS+, which is half of the global average, despite their active purchasing. As a result, the developed market will mostly gain from the de-dollarization of global foreign exchange reserves, not the emerging market.
• In addition, BRICS+ is growing its influence in regional commerce, concentrating more on member-to-member trade, and becoming a more significant trading partner for other emerging economies, particularly in the fuel sector. 37% of the EM gasoline trade, a major area of focus for de-dollarization, is accounted for by BRICS.

BRICS 2024: ADDRESSING TRADE CHALLENGES

• Rising Protectionism: One of the biggest challenges facing the BRICS nations is the rise of protectionism around the world. This is especially problematic for countries like Brazil and South Africa, which rely heavily on exports for economic growth.
• Currency Volatility: Another major challenge facing the BRICS countries is currency volatility. As emerging market economies, these nations are particularly vulnerable to fluctuations in the value of their currencies.
• Infrastructure Deficits: Infrastructure deficits are another key challenge facing the BRICS countries as they seek to expand their trade networks. In many developing nations, inadequate infrastructure can hinder the movement of goods and services, making it difficult for businesses to compete in the global market.

Final Verdict and Conclusion

To sum it up for you, the BRICS Summit 2024 can make huge financial changes in the world of global trade. The burgeoning relationship between India and Russia holds immense promise for the future of import-export activities between the two nations. As BRICS 2024 approaches, the stage is set for deeper collaboration and enhanced trade linkages that will benefit not only India and Russia but also the broader global economy. By capitalizing on their shared strengths and synergies, India and Russia are poised to unlock new avenues of growth and prosperity in the years to come.