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Prime Minister Modi's Upcoming Visit to Russia: A Trade Perspective

Introduction

On July 8, 2024, Indian Prime Minister Narendra Modi is set to embark on a three-day visit to Russia. This visit holds significance as it marks his first bilateral engagement since taking office for a rare third consecutive term as India's prime minister. Traditionally, Modi has chosen neighboring countries for his initial foreign visits, emphasizing India's neighborhood as a foreign policy priority. However, this time, the choice of Russia and Austria may seem unconventional. Let's delve into the reasons behind this decision and explore the trade implications of Modi's visit to Russia.

Background: India-Russia Relations

India and Russia share a longstanding relationship that dates back to the Indo-Soviet Treaty of Peace, Friendship, and Cooperation signed in 1971. Despite the collapse of the Soviet Union in 1991, their ties have endured, with annual India-Russia summits playing a crucial role in anchoring this partnership. Defense and energy cooperation have been key elements, but recent years have seen a decline in summit meetings due to geopolitical shifts and India's growing reliance on the West for technology and investments.

Trade Dynamics and Strategic Considerations

1. Energy Cooperation

One of the critical aspects of India-Russia trade is energy cooperation. Despite Western objections during the Ukraine conflict, India has continued to receive Russian oil at discounted prices. This strategic move allows India to secure energy resources while navigating global tensions. Modi's visit provides an opportunity to strengthen energy ties and explore avenues for further collaboration.

2. Payment Mechanisms Amid Sanctions

Western sanctions have strained Russia's economic relations, making it essential for both countries to find alternative payment mechanisms. During the visit, discussions are likely to focus on smoothening payment issues arising from these sanctions. The use of national currencies for bilateral trade, which now accounts for 60% of the total trade, will be a key topic of conversation.

3. Maritime Connectivity: Chennai-Vladivostok Route

Modi's visit may also address the Chennai-Vladivostok maritime route, which aims to enhance connectivity between India and Russia. By improving sea links, both countries can boost trade and facilitate smoother movement of goods across the Indo-Pacific region.

4. Defense Exchanges and RELOS Agreement

The Reciprocal Exchange of Logistics Agreement (RELOS) is expected to be concluded during Modi's visit. This agreement will pave the way for more defense exchanges, reinforcing India-Russia defense ties. Given Russia's limited credible friends on the global stage, Modi's engagement becomes crucial for both nations.

Conclusion

Prime Minister Modi's upcoming visit to Russia holds immense significance for bilateral trade and strategic cooperation. As the world faces intense global flux, India's multi-alignment approach seeks to maximize advantages by engaging with different partners. By strengthening energy ties, addressing payment challenges, and promoting maritime connectivity, Modi's visit underscores the importance of India-Russia relations in an ever-changing world.

Please note that this article provides an overview, and further research and analysis would be needed to delve deeper into specific trade agreements and implications. If you have any additional requests or need further details, feel free to ask!

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