India discussing FTA with Russia despite geopolitical tensions over Ukraine war

The war in Ukraine has disrupted Russia's trade with the rest of Europe and the west, which led to major brands pulling out of the country and gas supply being cut. But the geopolitical crisis came with a silver lining for India, as it defied western pressure to buy oil at discounted prices from Russia.

Now the two countries have initiated negotiations about a free trade agreement, which will boost the export of machinery from India.

Resisting geopolitical pressure

• Russia is already India's biggest oil supplier and has been exporting defence equipment to the country for decades.

• The FTA is expected to balance out trade with exports from India, after goods flowing into the country from Russia went up four-fold.

• The plan was announced by Russia's deputy PM Denis Manturov on his two-day India visit.

• This will be India's next big trade deal after pacts with UAE and Australia, as well as one with UK in the works.

Trading in national currency also on the agenda

• The negotiations will include a meeting between the co-chairs of the Russia-India commission and representatives of industries from both countries.

• Manturov will also discuss trade in national currencies to replace the US dollar, during his meeting with India's foreign minister S Jaishankar.

• Facing restrictions from NATO allies, Russia has also opened an India office for its chamber of commerce and industry.

• At the same time, its exports to India's neighbour China have also jumped by 43 per cent, while imports went up by almost 20 per cent.