Reorientation of Economic Cooperation Between Russia and India

In the previous article, we noted the inevitability of a shift in the model of Russian-Indian economic cooperation. While the Soviet period was dominated by an asymmetric model of supporting India's industrialization, the modern paradigm shows a shift toward facilitating modernization processes in the Russian economy, leveraging Indian investment, technological, and labor potential.

Amid geo-economic turbulence and the reorientation of Russia's foreign policy and economic priorities toward the Asia-Pacific region, the Republic of India emerges as a key strategic partner, possessing significant demographic capital (over 1.4 billion people), progressive industrial and military capabilities, and a growing domestic market with high investment multipliers.

The strategic benefit of this new cooperation model for Russia lies in the long-term potential for institutionalizing a Eurasian logistics function, positioning the country as a hub integrating transit corridors between the Asia-Pacific region and Europe. This could transform Russia's image from a peripheral resource-based economy into a global economic hub.

Key constraints hindering the intensification of Russian-Indian economic cooperation include insufficient institutional awareness among counterparties, complex administrative procedures, fragmentation of the financial and credit system, underdeveloped transport and logistics infrastructure, a shortage of skilled personnel, and cross-cultural differences in the business environment.

According to Indian think tanks, the most promising areas of cooperation include: licensed production of high-tech goods based on Russian designs, joint projects in mineral resource development, industrial cooperation, Russian technology transfers, and the integration of Indian labor into capital-intensive projects in Russia Kupriyanov A.V. Russia-India Cooperation in the Indo-Pacific Region Under Sanctions. A.V. Kupriyanov. – Electronic text // Bulletin of International Organizations: Education, Science, New Economy. – 2019. – №3. – URL: cyberleninka.ru/... (accessed: 18.02.2025)..

The economic strategies of both countries in the current context focus on reviving private entrepreneurship, deepening trade ties, boosting tourism exchange, and cooperating in strategic sectors—energy, coal mining, agrochemicals, nuclear power, pharmaceuticals, metallurgy, IT, and mineral resources. A representative example of bilateral investment partnership is the "Sakhalin-1" project, where the Indian state-owned corporation ONGC Videsh Ltd ONGC Videsh Limited - A Navratna Company Working globally for the Energy Security of India / Electronic text // ONGC: official website. – 2024. – URL: ongcvidesh.com (accessed: 18.02.2025).. (OVL) holds a 20% stake under a production-sharing agreement, receiving a corresponding share of hydrocarbon products since 2006, including liquefied natural gas since 2009.

Another significant investment case involves Russian private capital in India—the initiative by AFK Sistema to establish a unified nationwide telecommunications operator. The joint venture Sistema Shyam Teleservices Ltd Sistema Shyam TeleServices (SSTL) / Electronic text // TAdviser. – 2025. – URL: tadviser.ru... (accessed: 20.02.2025).. (SSTL), incorporated in March 2008, obtained a universal license to provide a wide range of mobile services across India. SSTL operates on the CDMA-800 frequency band, serving 20 administrative regions with a wireless subscriber base of around 15 million. Its broadband mobile internet service, MBlaze, has over 1.3 million users in more than 200 urban agglomerations.

In industrial cooperation through foreign direct investment, the multinational company MGK "Light Technologies" Light Technologies : official website. – Moscow, 2025. – URL: www.ltcompany.com (accessed: 20.02.2025). launched a project in 2014 to establish a production cluster in Jigani (Karnataka, India) for high-tech lighting equipment of varying complexity, with a planned monthly output exceeding 60,000 units. By 2024, Russian metallurgical and chemical companies had already entered the Indian market, with joint ventures in gas and other sectors. Discussions are underway on investments in transport infrastructure, particularly the North-South Corridor, where dozens of trains now operate India invested over $760 million in Russia in 2024 / Electronic text // TV BRICS. – 2025. – URL: tvbrics.com/... (accessed: 20.02.2025)..

The historical rationale for reorienting Russia-India cooperation stems largely from geopolitical shifts in the global landscape. Moreover, both nations share aligned interests and goals, making cooperation mutually beneficial.