Historical Background of Russia-India Economic Cooperation

One of the priority tasks in the development of the foreign economic policy of the Russian Federation in the current geopolitical context is the consolidation of strategically advantageous interstate partnership with the Republic of India, which holds increased significance in the context of international geo-economic cooperation. The expansion of economic collaboration with New Delhi sets a positive dynamic for the diversification of Russia's foreign economic ties and actualizes the prospects of sustainable multipolar economic interaction.

Even in pre-revolutionary foreign policy planning, at the end of the 19th century, Emperor Nicholas II outlined the vectors of consular presence in Bombay (modern-day Mumbai) The Eastern Journey of Tsarevich Nicholas II / Text : electronic // PublisherNews. – 2023. – URL: https://publishernews.ru/... (accessed: 20.01.2025)., thereby anticipating diplomatic institutionalization.

India's post-colonial statehood, established in 1947, was marked by the formalization of interstate relations with the Soviet Union, covering a wide range of economic and technological factors. At the same time, the dominant economic doctrine of India's first Prime Minister J. Nehru was an ideologically articulated course toward an autonomous path of modernization, based on the hybridization of socialist and capitalist paradigms within the framework of a new economic model Yurlov, F.N. The Role of Jawaharlal Nehru in Independent India / F.N. Yurlov. – Text : electronic // Bulletin of the Institute of Oriental Studies of the Russian Academy of Sciences. – 2022. – No. 2. – Pp. 35-48. – URL: https://lk.ivran.ru/...pdf (accessed: 20.01.2025)..

During the industrialization phase of the 1950s, with direct institutional and resource support from the USSR, India implemented a large-scale heavy industrialization project, including the construction of metallurgical and machine-building plants, hydrotechnical facilities, key segments of chemical production, and the formation of power infrastructure. An important component of bilateral interaction was the training of Indian specialists in Soviet specialized educational institutions, which contributed to the reproduction of national engineering and technical capital. Lunev S.I. Soviet-Indian Relations (1955 - 1971): The Birth of Friendship / S.I. Lunev. – Text : electronic // MGIMO Bulletin. – 2017. – No. 2 (53). – URL: https://cyberleninka.ru/... (accessed: 06.02.2025).

The Treaty of Peace, Friendship, and Cooperation between the USSR and India, signed on August 9, 1971 70 Years of Indian-Russian Relations: A Historic Milestone / Text : electronic // Embassy of India : official website. – https://www.indianembassy-moscow.gov.in/... (accessed: 06.02.2025)., institutionalized bilateral relations in a legal and international context and established a legal framework for further intensification of trade and economic ties.

In the foreign trade sphere in the 1970s, the USSR became India's key partner: Soviet-Indian joint ventures accounted for up to 30% of national steel production, 16% of iron ore mining, 60% of oil extraction, and approximately 30% of crude oil refining. Nearly 25% of generated electricity and a significant share of metallurgical, energy, and mining equipment bore the mark of Soviet cooperation. By the end of the decade, the Soviet Union had firmly established itself as India's primary partner in both export and import operations. Kundu, N. Russian-Indian Relations: Past, Present, Future / Nivedita Das Kundu. – Text : electronic // Valdai. – 2016. – URL: https://ru.valdaiclub.com/... (accessed: 06.02.2025).

The 1990s opened a vector of transformation in bilateral interaction, oriented toward cooperation in high-tech sectors—aerospace, nuclear, and IT clusters. Strengthening coordination in international formats (UN, BRICS, SCO, G-20) became a new institutional track of partnership.

India's economic liberalization in the early 1990s, initiated by Finance Minister M. Singh, transformed the country's macroeconomic landscape: deregulation of domestic markets, attraction of foreign direct investment, privatization of loss-making state assets, and tax reforms became catalysts for growth. While retaining elements of socialist planning in the form of the Planning Commission, the Indian economy constructed a unique hybrid of market and directive management, focusing on strategic forecasting and long-term planning documents. Sadovnikova Ya. India: From "M. Singh's Reform" to the Economic Policy of N. Modi / Ya. Sadovnikova. – Text : electronic // Contemporary Development Problems. – 2020. – No. 5. – URL: https://www.imemo.ru/... (accessed: 16.02.2025).

The systematic implementation of this strategy contributed to sustained GDP growth of over 7% between 1997 and 2011, allowing India to claim the status of one of the drivers of global economic dynamics. However, amid growing structural imbalances caused by global economic fluctuations, crises in commodity markets, and the accelerated development of China, an obvious trend toward stagnation emerged: since 2011, a decline in economic growth rates has been observed, exacerbated by a current account deficit, rupee devaluation, and capital outflows. Akarashov I.S. Russian-Indian Relations: From the "Pause" in the Mid-1990s to the "Strategic Partnership" of the Early 21st Century / I.S. Akarashov. – Text : electronic // Manuscript. – 2017. – No. 12-4 (86). – URL: https://cyberleninka.ru/... (accessed: 16.02.2025).

In 2013, GDP growth rates fell to 5% (compared to 8% previously), and according to expert assessments from certain analytical centers, further slowdown to 4.5–4.7% seemed likely. The IMF emphasized in its reviews that the nature of stagnation in the Indian economy was unique—deep, accompanied by inflationary pressure, differing from typical patterns of "emerging" economies. IMF Annual Report 2013: Toward a Stronger and More Stable Global Economy: published October 1, 2013. – Text : electronic // International Monetary Fund. – 2013. – URL: https://www.imf.org/... (accessed: 16.02.2025).

The aforementioned macroeconomic configuration, coupled with the inertia of post-Soviet formats of Russian-Indian interaction, highlighted the lack of new cooperation models, necessitating the development of a qualitatively updated strategic program for economic interaction that aligns with the realities of the 21st century. The degradation of Soviet integration mechanisms led to a decline in Russia's share in India's foreign economic priorities.

Moreover, since the late 20th century, the Indian economic system has seen a shift from a protectionist import-substitution model to a liberalized export-oriented model, institutionally cemented by the 1991 reforms (Fursov K.A. 2003. 03.039. Ahluwalia M.S. Economic Reforms in India Since 1991: Has Gradualism Worked? / K.A. Fursov. – Text: electronic // Social and Humanitarian Sciences. Domestic and Foreign Literature. – Ser. 9, Oriental Studies and African Studies: Abstract Journal. – 2003. – No. 3. – URL: https://cyberleninka.ru/... (accessed: 16.02.2025)). This transition was accompanied by the strengthening of market mechanisms, deregulation of the business environment, and deepening privatization processes, which, in turn, reorganized the priority structure of foreign economic interactions. The growing importance of high-tech industries and the expansion of the IT sector contributed to the restructuring of both India's export and import profiles, leveling traditional sectoral linkages with socialist bloc states, including Russia.

Simultaneously, in post-Soviet Russia, due to shock liberalization, the radical dismantling of the centralized planned system, and rapid integration into the globalized economy, a one-sided export-raw material model emerged, with the hydrocarbon sector at its core. This specialization led to changes in production potential, progressive destruction of inter-industry linkages, devaluation of the industrial base, and institutional degradation of key elements of the reproduction mechanism.

As a result, amid the increasing influence of globalization processes, Russian-Indian economic relations faced the need for strategic reorientation, driven by challenges related to the instability of national economic systems, volatility in global markets, and the limitations of transnational macroeconomic regulation mechanisms.