Modi, Putin push economic links to revitalise India-Russia ties in closely watched visit

NEW DELHI - Russian President Vladimir Putin’s closely watched visit to India began with the warmest of welcomes and ended with pledges of closer economic cooperation between the two countries, announced alongside his friend, Prime Minister Narendra Modi.

Seeking to revitalise economic ties, the two countries agreed to ease the movement of Indian workers to Russia and pledged to increase bilateral trade by expanding the goods basket during Mr Putin’s two-day visit, his first to India since Russia’s invasion of Ukraine in 2022.

India rolled out the red carpet for the Russian President, who has been shunned in many Western capitals.

Signalling the importance of the visit, Mr Modi broke from the usual protocol and welcomed the Russian leader at the airport on Dec 4, where he enveloped him in a warm hug, and then hosted him to a private dinner, and lunch the following day.

Mr Putin was also accorded a ceremonial welcome and Tri-Services Guard of Honour at the forecourt of Rashtrapati Bhavan, the official residence of the Indian President.

“Humanity has faced numerous challenges and crises. Yet, through all of this, the India-Russia friendship has remained steady like a guiding star,” said Mr Modi as he addressed the press with Mr Putin on Dec 5.

The Russian leader’s visit to India came as the US continues to press for a ceasefire in Ukraine. Mr Modi has been under pressure by the West to push Russia towards a peaceful resolution, given the close ties between the countries that date back to the Cold War.

India has had to thread the needle between pacifying the West and maintaining ties with a country with which it has important energy and defence links. In a sign of the bonhomie and level of trust between the current leaders of both countries, Mr Modi and Mr Putin had spoken 14 times over the phone since 2022 and met in person four times since 2024.

Beyond the symbolism of the trip, Russia, squeezed by sanctions and Western censure, has sought to push economic and labour ties with India, while India is seeking diversification of its exports to counter a punitive 50 per cent tariff from the US.

Thus, the centrepiece of the visit was an effort to boost the economic partnership and revitalise a relationship in which the traditional areas of cooperation like defence have lagged in recent years.

The two sides signed a new labour mobility pact and road map for economic cooperation, among other agreements.

The former will smoothen the movement of skilled Indian workers in information technology, construction and engineering to Russia, to ease a labour shortage there.

“Manpower mobility will not only connect our people but also create new strength and new opportunities for both countries,” said Mr Modi in his statement to the press.

The two sides also said they had come up with a new programme for economic cooperation, which includes greater access for Indian products, like marine products, to reach a target of US$100 billion (S$129 billion) by 2030 and reduce a trade imbalance in Russia’s favour.

Mr Modi said the road map would “add new dimensions to our areas of cooperation”.

Trade was worth US$68.7 billion in the 2024-2025 financial year, largely due to India’s purchases of oil from Russia.

Russian export of discounted oil to India, a major driver in the economic relationship, is declining because of Western sanctions. The share of oil imports from Russia to India is expected to touch a three-year low this year.

India’s exports to Russia, including pharmaceuticals, were worth US$4.9 billion, while India’s imports from Russia, which include oil and petroleum products, vegetable oil and fertilisers, amounted to US$63.8 billion. 

The shadow of the Ukraine peace deal

The war in Ukraine loomed over the visit, the show of solidarity notwithstanding.

In a statement aimed more at the West than Russia, Mr Modi said: “The world should return to peace, and we support every effort towards peace. India is not neutral; India is on the side of peace. India-Russia relations should grow and touch new heights.”

While bilateral ties have ebbed and flowed, Moscow and New Delhi have stayed close despite successive US presidents cultivating the South Asian nation as a counter to China.

This strategic calculus has held even with Russia’s close ties with China and China-India tensions, which only recently have been dialled down amid fraying India-US ties.

To force it to stop buying Russian oil – but even more so in pursuit of a trade deal that US President Donald Trump deems favourable to the world’s largest economy – the US has slapped 50 per cent tariffs on India, which include

a 25 per cent punitive tariff for buying Russian oil.

While negotiations are still ongoing with the Trump administration, India is stepping up its efforts to deepen economic ties with other countries, including Russia.

Mr Putin offered India a continued supply of oil, even though heavy US sanctions have made it difficult for Indian companies to accede.

“Russia remains a reliable supplier of energy resources and everything necessary for the development of India’s energy sector. We are ready to continue ensuring uninterrupted fuel supplies for India’s fast-growing economy,” said Mr Putin in his statement to the press.

The Russian leader also thanked the Indian leadership for “the warm and hospitable welcome accorded to the Russian delegation”.

He said talks were “useful, constructive and friendly in the spirit of the special and privileged partnership”.

The traditional defence ties

Defence, the bedrock of ties, also featured in the talks.

Russia remains a key defence supplier to India, even though the share of India’s total arms imports from Russia has dropped from 72 per cent in 2010-2014 to 36 per cent in 2020-2024, as reported by the Stockholm International Peace Research Institute.

While India has been diversifying its purchases to include equipment from Israel and France and also pushed for production within India, Russia remains keen to boost defence cooperation and maintain its edge in India’s defence market. 

A joint statement said that both sides were “reorienting” the military partnership towards “joint research and development, co-development and co-production of advanced defence technology and systems”.

It added that they agreed to “encourage joint manufacturing in India of spare parts, components, aggregates and other products for maintenance of Russian-origin arms and defence equipment” through transfers of technology and joint ventures.

Russia has offered India unfettered access to its fighter jet technology, with the Kremlin at pains to underline that its defence industrial production is not all geared towards the war in Ukraine and can also feed exports.

“We’re interested in the continuation of cooperation in this very sensitive field. And hopefully we’ll continue to do it,” Mr Dmitry Peskov, Mr Putin’s press secretary, told reporters on the sidelines of the Russian President’s visit to Delhi on Dec 2. 

However, India has faced delays in the delivery of defence equipment by Russia since the outbreak of the Ukraine war.

The delivery of the fourth and fifth S-400 Triumf surface-to-air missiles has been running behind schedule. India inked the US$5.43 billion deal in 2018 and was supposed to get all five missiles by the end of 2023. Indian media reports have given the new timeline as 2026-2027.

India used the systems during the limited military conflict with Pakistan in May and is understood to be keen on acquiring more. 

Analysts noted that it remained to be seen how much the two countries could boost the economic partnership and add substance to the relationship, given constraints like tariff barriers and the struggle to create transit corridors safe from Western sanctions.

“The summit is important for both India and Russia in their own ways,” said Professor Harsh Pant, vice-president of the Observer Research Foundation, a New Delhi-based think-tank.

“India is showcasing a certain strategic autonomy by hosting Putin. Despite the pressure from the US, India continues to manage its foreign policy in its own way,” he said. India’s strategic autonomy relates to how India has followed a foreign policy without aligning fully with any great power.

“It is important that this relationship is strengthened... But how do you do that?” Prof Pant said. “That remains something of an open question.”