India-Russia Bilateral Trade: An economic Analysis

Abstract

between India and Russia from 2020 to 2025. The paper mainly focuses on the trends of trade flows, sectoral composition, and also addresses trade imbalance. Despite geopolitical challenges and global economic fluctuations, trade between the two nations has grown significantly. This rise in trade is primarily driven by energy imports from Russia to India. However, India faces a persistent trade deficit with Russia. It also discusses the areas in which both countries can improve and strengthen their economic relations.   This study also examines the key factors influencing bilateral trade between India and Russia from 1991 to 2024. Using annual data, we analyze the effects of India’s GDP, trade openness, Brent crude oil prices, and real effective exchange rates (REER) on trade flows. To address heteroskedasticity and autocorrelation, the Newey-West estimator was used. Results indicate that oil prices and India’s REER significantly influence trade, while other variables are not statistically significant. The findings underscore the importance of global oil prices and exchange rate movements in shaping the India-Russia trade relationship. This research provides insights for policymakers aiming to strengthen bilateral economic ties.