Russia-India relations traditionally rest on long-term political confidence. At the same time, the priority is currently transferring this political confidence to the commercial sector.
Prioritizing Pragmatism
According to representatives of the Indian business community, the future of economic cooperation between Russia and India will be pragmatic, selective, and increasingly focused on compliance with agreements, while retaining its strategic significance for both states. India will continue to engage with Russia wherever this serves its economic and national interests, while simultaneously expanding relations with the United States and other global players. The goal is not to choose one relationship at the expense of another, but to build sustainable partnerships and preserve New Delhi’s freedom to make decisions in accordance with its own interests.
Energy Security and Strategic Autonomy
India’s approach is determined by national interests, energy security, and strategic autonomy. Russia remains an important energy partner, and Russian oil has played a significant role in India’s import basket in recent years. Access to reliable and affordable energy is important for economic growth, managing inflation, and enhancing the global competitiveness of industry. Therefore, India intends to maintain energy cooperation with Russia and deepen it selectively where commercial terms are attractive and the legal and financial framework is workable. This may include long-term agreements on hydrocarbon supplies, cooperation in LNG, coking coal, and, where appropriate, investment in energy projects.
However, deepening cooperation does not mean unlimited expansion. Indian refineries, banks, shipping companies, and insurers must carefully assess the risks associated with sanctions, existing payment mechanisms, insurance, freight, and access to international financial markets. India does not see this as a choice between Russia and the West. It strives for diversified energy security and will work with partners where this is justified by commercial terms and national interests.
Settlements in National Currencies: Progress and Conclusions
New Delhi supports the broader use of national currencies in international trade, including settlement mechanisms using the rupee and the ruble. The Reserve Bank of India has already established a settlement mechanism through special rupee-denominated vostro accounts, which provides an institutional basis for expanding trade in national currency. There has been substantial progress in the use of rupees and rubles in bilateral settlements. This is important because the payment difficulties after 2022 showed that strong political relations must be supported by reliable financial infrastructure.
Practical problems remain, the most important of which is the imbalance in bilateral trade. India imports significantly more from Russia than Russia imports from India, which creates accumulated rupee balances that must be used through trade, investment, or financial instruments. Large Indian companies are open to settlements in national currency, provided there is liquidity, convertibility, regulatory compliance, and predictability. At the same time, SMEs are more sensitive; they cannot afford long delays, blocked payments, or complex verification procedures. What matters to them is not the currency itself, but the simplicity, transparency, and reliability of the mechanism. Therefore, there should be less focus on slogans about de-dollarization and more on creating a payment system that actually works for ordinary companies. In the future, there is significant potential for closer linkage of national payment infrastructure and financial technology platforms among BRICS member countries.
Indian Business: Pragmatism and Compliance
According to the Indian side, when it comes to cooperation with Russian counterparts, the prevailing approach is pragmatic and focused on commercial benefit. This is particularly relevant in areas such as pharmaceuticals, fertilizer production, energy, mechanical engineering, the chemical industry, and agriculture – that is, where India and Russia have a natural complementarity.
At the same time, large Indian conglomerates are aware of their dependence on the United States, Western Europe, and the international financial system. A multinational corporation with Western investors, banks, or technology partners will assess transactions with Russia differently from a small company operating in India or in emerging markets. Large companies conduct extensive sanctions compliance checks covering counterparties, banks, vessels, insurers, and payment channels. This does not mean they are opposed to doing business with Russia; it means that commercial relations must be carefully structured.
Balance Between the US and Russia
It is important to distinguish between direct incentives for individual Indian companies and the broader strategic relationship offered to India. The United States is expanding cooperation with India in advanced technologies, defense production, semiconductors, critical technologies, supply chain resilience, clean energy, and investment. Washington provides access to one of the world’s largest markets and remains an important source of technology and investment. Trade access has also become an important instrument in India-US relations.
At the same time, Indian companies must consider the possibility of secondary sanctions, restrictions on financial transactions, and other measures when working with Russian companies under Western restrictions. The American approach contains both incentives and pressure. However, not every US proposal to India should be described as explicitly conditioned on reducing relations with Russia.
New Delhi intends to be guided by its own interests and to continue protecting its strategic autonomy, building a multi-vector policy in which the Russian track remains strategically important, but not the only one.
Vlad Markin, Deputy Editor-in-Chief of NEO
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