Free trade between India and Russia is being worked upon, official says
At the "From the Volga to the Ganges" Russian-Indian Forum organised by the National Stock Exchange (NSE), senior Russian official Sergey Glazyev — State Secretary of the Union State of Russia and Belarus — confirmed that work on a free trade agreement between India and Russia is actively underway.
Glazyev highlighted the need to reduce dependence on US-dominated capital markets and build an alternative financial architecture.
He proposed an intergovernmental digital settlement currency, "BRICScoin," to facilitate cheaper cross-border transactions within the BRICS bloc and reduce currency capital challenges.
Pilot projects for digital national currencies are being discussed as part of broader financial integration efforts.
India and Russia's bilateral trade reached approximately $69 billion in 2024, driven largely by Indian imports of discounted Russian crude oil.
India-Russia Strategic Partnership: Depth and Evolution
India and Russia share a "Special and Privileged Strategic Partnership," elevated to this status during the 22nd India-Russia Annual Summit in 2021. The bilateral relationship traces back to the 1971 Indo-Soviet Treaty of Peace, Friendship and Cooperation. Russia remains India's largest supplier of defence equipment — supplying platforms including the BrahMos missile (a joint venture), S-400 Triumf air defence systems, and nuclear reactors (Kudankulam). After 2022, economic ties deepened dramatically as India absorbed discounted Russian crude oil shunned by Western sanctions. Over 90% of bilateral trade is now settled in Indian rupees or Russian roubles.
Key Details
- India-Russia relations: "Special and Privileged Strategic Partnership" (since 2010; upgraded 2021)
- 1971 Indo-Soviet Treaty: 20-year friendship and cooperation pact — foundational document
- Russia's share in India's crude oil imports: rose from ~2% pre-2022 to ~35-40% post-sanctions
- India-Russia bilateral trade (2024): ~$69 billion; India's imports dominate ($64 billion)
- BrahMos missile: joint venture — Russia-India, range 290-800 km
The FTA discussions represent an effort to institutionalize and deepen the trade relationship that expanded rapidly on an ad hoc basis after 2022.
Free Trade Agreements: Instruments and India's FTA Architecture
A Free Trade Agreement (FTA) is a treaty between two or more countries to reduce or eliminate tariffs and non-tariff barriers on goods traded between them. A more comprehensive variant is a Comprehensive Economic Partnership Agreement (CEPA) or Comprehensive Economic Cooperation Agreement (CECA), which covers goods, services, and investment. India has FTAs/CEPAs with ASEAN, Japan, South Korea, UAE, and Australia (interim). FTA negotiations with the UK, Canada, and the EU are ongoing. An India-Russia FTA would be negotiated through the India-Eurasian Economic Union (EAEU) framework, as Russia is an EAEU member — along with Belarus, Kazakhstan, Kyrgyzstan, and Armenia.
Key Details
- Eurasian Economic Union (EAEU): established January 1, 2015; members: Russia, Belarus, Kazakhstan, Kyrgyzstan, Armenia
- India formally began FTA negotiations with EAEU — ADB's Asia Regional Integration Center tracks this as an ongoing negotiation
- CEPA vs FTA: CEPAs cover services and investment in addition to goods tariffs
- India's existing FTAs: ASEAN (2009), Japan (2011), South Korea (2009), UAE CEPA (2022), Australia Interim ECTA (2022)
Any India-Russia FTA would be structured through the EAEU framework, making it a multilateral agreement with significant geopolitical and economic implications extending beyond the bilateral relationship.
De-Dollarisation and BRICS Monetary Alternatives
De-dollarisation refers to efforts by countries to reduce their dependence on the US dollar in international trade, reserves, and financial settlements. The US dollar currently constitutes about 58% of global foreign exchange reserves and is used in approximately 88% of global trade transactions. BRICS nations (Brazil, Russia, India, China, South Africa, plus new members from 2024) have discussed creating alternative payment systems. The proposed BRICScoin is a concept for an intergovernmental digital settlement currency to be used among BRICS members. India has been cautious about full de-dollarisation, maintaining large USD-denominated reserves, but supports rupee-based trade as a pragmatic alternative.
Key Details
- USD share of global FX reserves: ~58% (IMF COFER data, 2025)
- USD's share in global trade invoicing: ~88% (BIS estimates)
- India's forex reserves: over $650 billion (2025), largely USD-denominated
- India-Russia trade: over 90% now settled in rupees/roubles (Economic Times reports)
- BRICScoin: proposed intergovernmental digital settlement currency — concept stage, not operational
Glazyev's BRICScoin proposal reflects the broader BRICS push to build transaction infrastructure that bypasses SWIFT and USD, in which India plays a pivotal but cautious role.
- India-Russia bilateral trade (2024): ~$69 billion
- India's imports from Russia (2024): ~$64 billion (mostly crude oil)
- Russia's share in India's crude oil imports (post-2022): ~35-40%
- EAEU established: January 1, 2015 (headquarters: Moscow)
- EAEU members: Russia, Belarus, Kazakhstan, Kyrgyzstan, Armenia
- India-Russia trade: 90%+ settled in rupees/roubles
- JCPOA withdrawal date for context: May 2018 (affected Iran oil, redirected India toward Russia)
- BRICScoin: proposed, not yet operationalized