India, Russia in talks on free trade agreement, say ministers

India’s Foreign Minister S. Jaishankar told an event in New Delhi his government was in “advance agreement” on a trade treaty that Russia’s Trade and Industry Minister Denis Manturov said would bring a guarantee of bilateral investment.

India has not explicitly criticised Russia’s invasion of Ukraine – which Moscow describes as a “special military operation” – and has called for a peaceful resolution of the conflict through dialogue.

Russia, a traditional defence equipment supplier, also displaced Iraq last month to become India’s top supplier of crude oil. Overall Indian imports from Russia increased almost fourfold to $46.33 billion in the year to March 31.

Moscow was looking to increase machinery imports from India to improve the trade balance, Manturov said.

“We need to find a niche in the products which India can replace,” he told reporters on the sidelines of the event. “In civilian projects, we need as wide cooperation as it was before the sanctions.”

Reuters reported in November that Russia was potentially seeking to import more than 500 products from India for key sectors including cars, aircraft and trains, as western sanctions undermine Moscow’s ability to keep core industries operating.

India too aims to narrow its growing trade deficit with Russia, which has been India’s largest supplier of military equipment for decades and is the fourth-biggest market for Indian pharmaceuticals.

Jaishankar said Indian business could benefit from Russian technology and that New Delhi was working to iron out payments, certification and logistics issues.