Russia: Jaishankar has belled the Russian cat

Jaishankar Russia Visit: If things are too much in order, then rest assured that there is some kind of tyranny directing it. Perfection can rarely be achieved through willful cooperation. Bilateral ties are not different. Even India-Russia ties have their own set of problems which anyone rarely points out. But India’s EAM S. Jaishankar does not belong to that league. He makes no bones about belling the cat.

Jaishankar is worried about trade deficit

During his 2-day visit to Russia, Jaishankar pushed for more balance in India-Russia ties. He is particularly worried about the direction of India’s economic cooperation with Russia. In essence, it is only advantageous to Russia in bilateral trade. In the first 5 months of FY23, Russia dominated more than 95 per cent of bilateral trade. This is what worries EAM Jaishankar.

After meeting with his Russia counterpart Sergey Lavrov, Jaishankar said, “Minister Lavrov and I have noted the significant growth in our bilateral trade this year and focused on how to make it more sustainable. We are naturally concerned at the trade imbalance, and I have raised with the Russian side how to address impediments that stand in the way of greater Indian exports.”

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Trade deficit in numbers

During the time period of April and August, bilateral trade between both countries has soared to over $18.23 billion. India has imported stuff worth $17.23 billion from Russia while Russians consumed Indian products worth only $992.73 million. India imported stuff like mineral fuels, mineral oils and products of their distillation, bituminous substances, and mineral waxes from Russia.

These products alone accounted for 84 per cent of total imports from Russia. Fertilisers accounted for 7 per cent of total Russian imports in India. Precious stones, metals, coins, ships, boats, vegetable fats and oil, inorganic and organic chemicals, iron, steel, aluminium, aircrafts, space crafts, cosmetics, edible meat among others comprised the remaining 9 per cent of pie chart.

These numbers get more draconian in Year-on-Year terms. Out of 5 months, the import numbers increased by more than 500 per cent in 3 months. In August, it even crossed 600 per cent.

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Increase in bilateral trade should not result in increase in trade deficit

These numbers are bad on a preliminary basis. The fact of the matter is that India’s Russian export numbers for this year fares too bad compared to previous years as well. In 2021-2022, our bilateral trade with Russia was worth more than $13.12 billion. You will be astounded to know that in those 12 months, our export to Russia was more than 3.5 times that of five months of FY23.

Given the fact that there are 5 more months to trade in this financial year, Jaishankar does not want the trade deficit to worsen, not even in percentage terms. This is the reason why he is in Russia with senior representatives of seven different ministries. According to the latest projections, bilateral trade is expected to touch $30 billion in this financial year.

It is more than double the amount of cash flows in FY21. However, to be honest, even $30 billion looks a conservative estimate. Our oil imports from Russia are only increasing. In October, Russia fulfilled 22 per cent of our oil needs and reclaimed its position of number 1 oil supplier.

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To stop this, Americans are sending their Treasury Secretary Janet Yellen. However, even before she landed in India, Jaishankar has hinted it clear that India won’t stop buying oil from Russia. Definitely, in return India would want Russians to buy Indian products.

As usual, India’s maverick minister has raised the right issue at the right time. There is a G20 meeting scheduled next week. Russia needs India more than ever in that meeting. Though, India will stand by Russia anyway, it will be better if more of our concerns are sorted out by Russians.