Putin and Modi hold talks and announce expansion of Russia-India trade ties

Putin was received by Modi at an airport in New Delhi on Thursday. The Indian leader gave Putin a bear hug and a tight handshake with the gusto of an old friend.

Leaders outline Russia-India expanding ties

After the talks, Putin and Modi announced that India and Russia have finalized an economic cooperation program until 2030, which will help diversify mutual businesses to boost annual trade to $100 billion by 2030. They also emphasized strong energy ties.

Bilateral trade between the two countries stood at $68.7 billion in the last fiscal year ended March. The trade is heavily skewed in favor of Russia with deep deficits for India, which it is looking to bridge by pushing exports.

"To achieve this significant goal, a program for the development of Russian-Indian economic cooperation until 2030 has been agreed upon," Putin said. He said work is underway on an agreement for India to establish a free trade zone with the Eurasian Economic Union, a Moscow-dominated economic grouping of several ex-Soviet nations, adding that it could help increase trade.

"Russia is a reliable supplier of energy resources and everything necessary for the development of India's energy sector," Putin said. "We are ready to continue ensuring the uninterrupted supply of fuel for the rapidly growing Indian economy."

Before the summit talks, the Russian leader said the two countries "have a very trusting relationship when it comes to military-technical cooperation."

Modi said after the talks that the two countries will work toward early conclusion of a free trade agreement with the Eurasian Economic Union. He also announced that India will soon start issuing free electronic visas for Russian tourists and groups visiting the country.

The Indian leader said energy security has long anchored India-Russia ties, with civil nuclear cooperation spanning decades. He added that such cooperation will continue, alongside collaboration in clean energy, shipbuilding, fertilizers and labor mobility.

U.S. seeks to push India away from Russia

While India has historically maintained deep ties with Russia, critics say Putin's visit could strain relations with the European Union and the United States and might jeopardize negotiations for major trade agreements with both that are seen as critical for India's exports.

U.S. President Donald Trump raised tariffs on Indian goods to 50% in August, citing New Delhi's discounted Russian oil. India has been the second biggest importer of Russian crude after China.

The U.S. says purchases of Russian oil help finance Moscow's war machine. In October, the U.S. sanctioned two of Moscow's biggest oil producers to force countries like India to cut down on imports. Indian officials have said New Delhi has always abided by international sanctions and would do so in the case of Russia oil purchases.

India's foreign secretary Vikram Misri told reporters that the recent sanctions imposed on Russian oil were discussed.

Without specifying India's position on its purchases, Misri said the government's priority was to secure the energy needs of its 1.4 billion people.

Misri said India's private and state-run oil companies make decisions based on evolving market dynamics and commercial issues they confront while sourcing supplies.

"We are continuing our cooperation between the two countries," he said.

India and the U.S. set a target for the first tranche of a trade deal by the fall, but the deal hasn't come through yet amid strains in relations, mainly because of New Delhi's unabated imports of Russian crude.

India is also in the final stages of talks on a trade agreement with the EU, which sees Russia's war in Ukraine as a major threat.

Given the timing and geopolitical context, Putin's India visit "underscores New Delhi's strategic tightrope walk between the West and the rest, chiefly Russia," said Praveen Donthi, a senior analyst with the International Crisis Group.

Donthi said India's tilt toward Russia dates back to the Cold War and persists despite its official nonaligned position. "The significant change now is its desire to be a strategic partner with the U.S. at the same time, which will be a diplomatic challenge," he added.

Defense and trade expansion on cards

Indian officials earlier said that Modi in the meeting with Putin would push for faster delivery of two further Russian S-400 surface-to-air missile systems. It has already received three under a 2018 deal worth about $5.4 billion. The delay has been tied to supply chain disruptions linked to the war in Ukraine.

Misri said the defense ministers of India and Russia met Thursday.

In a joint statement following the summit, the two sides said they have agreed to encourage joint manufacturing in India of spare parts and components for maintenance of Russian-origin arms and defense equipment. This would be done through transfer of technology and setting up of joint ventures.

India and Russia signed a pact in February to improve military cooperation, exercises, port calls, disaster relief assistance and logistics support. Moscow's State Duma ratified the same ahead of Putin's India visit.

India is also expecting to upgrade its Russian-made Su-30MKI fighter jets and accelerate deliveries of critical military hardware.

India is keen to increase exports of pharmaceuticals, agriculture and textiles to Russia and is seeking the removal of non-tariff barriers. New Delhi is also seeking long-term supplies of fertilizers from Moscow.

Another key area where the two countries hope to finalize an agreement is the safety and regulation of skilled Indian migrant workers to Russia.

Putin last visited India in 2021. Modi was in Moscow last year, and the two leaders briefly met in September in China during a Shanghai Cooperation Organization summit.