The India–Russia bilateral partnership can be propelled further by exploiting opportunities for cooperation in Russia’s Far East in energy, ship-building, aviation, tourism among other sectors. India will continue to pursue its relations with Russia from its strategic and national security perspective rather than from Western/European geopolitical frameworks and narratives.

India–Russia bilateral relations have remained intact despite global geopolitical upheavals. Bilateral trade between both the countries reached US$ 65 billion in 2023.1 India’s increased crude oil imports from Russia has been one of the primary reasons for increase in trade figures. Despite pressures of Western sanctions, Indian policy-makers have been vocal regarding India’s national interests and have consistently emphasised that Russia remains one of India’s important strategic partners.

India–Russia bilateral partnership encompasses multiple aspects ranging from trade, connectivity, defence, science and technology, nuclear and space issues to name a few. Over the years, hydrocarbons have emerged as an important component in bilateral trade.2 Russia, despite multiple challenges to its shipping fleet, has enabled consistent supplies of hydrocarbons to India at a discounted price and other favourable conditions. The onset of Ukraine–Russia crisis though has limited the scale and scope of India–Russia partnership. The Brief highlights new areas of possible cooperation with Russia. Russia’s Far East offers immense potential in some new areas that could take the bilateral partnership to new highs.

India’s ‘Act Far East Policy’ as outlined by Prime Minister Narendra Modi in 2019 could become a torchbearer in propelling India–Russia partnership. At the 5th Eastern Economic Forum at Vladivostok in 2019, Prime Minister Modi announced US$ 1 billion line of credit for development of the Russian Far East. Modi emphasised that both India and Russia share a common goal when it comes to development of Russian Far East and asserted that the region could play an important role in further diversifying India–Russia relations from trade, connectivity, resources and other strategic perspectives. He highlighted that Vladivostok could become India's springboard in North East Asia market.3

Since the launch of India’s Act Far East Policy, several positive developments have taken place. These include those related to new transport corridors like the Northern Sea Route (NSR) as well as the Eastern Maritime Corridor (EMC) and training of Indian seafarers for Polar Operations in Russian Far East universities.4 There still remains tremendous opportunities in several new and existing areas that need serious consideration from both the sides.

Exits by companies from Russian oil and gas field as a result of Western sanctions presents excellent opportunities for India to make long-term investment in Russian oil and gas field in the Far East region. Despite consistent push for transitioning to renewable resources, estimates suggest that India’s requirements for hydrocarbons to sustain its growing population and expanding industrial base are going to witness a significant rise in the near future. As per the International Energy Agency (IEA) report 2024, India’s oil imports by 2030 are expected to reach 5.8 million barrels per day.5 Other estimates note that despite global transitions to renewable sources of energy, global demand for oil by 2050 would still remain consistent to around 100 million barrels per day. These estimates therefore suggest that India’s refining capacities to sustain its own demands and to cater to the global orders of refined crude would significantly increase.6

In order to maintain consistent long-term supplies of crude oil, it is important for India to diversify its options. Instabilities in West Asia presents another reason for India to diversify its energy procurement sources. India needs to consider exploring opportunities for new long-term gains via direct stake purchase route from Russian energy projects in the Far East. The Oil and Natural Gas Corporation (ONGC) Videsh Limited maintains a 20 per cent stake in Russia’s Sakhalin-1 project located in the Far East region. ONGC Videsh and many other Indian oil exploration and exploitation companies have required expertise in the extraction of hydrocarbons from Russian fields operating in extreme temperatures.

Sakhalin-2 earlier was a consortium of Gazprom (Russia), Shell (US-based subsidiary of Royal Dutch), Mitsui & Co. (Japan) and Mitsubishi Corp. (Japan). Post Shell’s exit from the project, Gazprom acquired its 27.5 per cent stake and now the Russian and Japanese companies are the sole stakeholders in the project.7 There were initial reports of Japan’s possible exits from Sakhalin-2 as a result of continued Western pressures, but it retained its stakes in the project to cater to its energy security needs.8 Any opportunity either from Russian or Japanese side of possible stake sale in Sakhalin-2 could be worth considering for India’s long-term energy security.........

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