India asks Russia to unlock ‘Full Potential’ of trade amidst US tariff threats

Visiting Indian Foreign Minister Dr S Jaishakar charing a meeting with First DPM Denis Manturov of the India-Russia Business Forum. (@DrSJaishankar/X)

ISLAMABAD 21 August 2025: In a significant move reflecting India’s strategic recalibration in global trade relations, External Affairs Minister S. Jaishankar embarked on a two-day visit to Russia against the backdrop of increasing trade tensions with the United States.

This visit comes as a direct response to the looming threat of US-imposed tariffs, which could raise import duties by 50% on select Indian goods, combined with the recent impasse in India-US trade negotiations.

During his discussions with Russia’s First Deputy Prime Minister Denis Manturov, Jaishankar emphasized the urgent need for New Delhi and Moscow to collaborate more closely and unlock the “full potential” of their trade and investment relations.

Both sides acknowledged that their bilateral commercial ties have not yet reached their true capacity, and greater cooperation could serve as a buffer against economic uncertainties caused by shifting global trade policies.

According to news agency TASS Russia and India want joint exploration of the Northern Sea Route and the North-South corridor, First Deputy Prime Minister of Russia Denis Manturov said at the meeting of the Russian-Indian Intergovernmental Commission.

"It is obvious that the expansion of trade and economic ties is also linked to forming reliable logistical corridors and creating new container services. We target joint development of the Northern Sea Route and the North-South Corridor in this regard," Manturov said.

Russia is read to share competences in the sphere of space activity, the first deputy prime minister said. 

"This refers in the first instance to manned space exploration, rocket engines production and the satellite navigation segment," he noted.

The visiting Indian foreign minister is expected to meet his Russian counterpart Sergey Lavrov to discuss further expansion of trade and economic cooperation and the international agenda.

According to the Russian Foreign Ministry, "Russia’s and India’s foreign ministers will pay special attention to the current and future avenues for promoting bilateral cooperation." "The meeting’s agenda will focus on facilitating the emergence of transport, logistics, banking and financial links and chains that would be immune to any adverse pressures from unfriendly countries, while also increasing the use of national currencies in their mutual settlements. Expanding cooperation in transport, energy, agriculture, science and technology will also be on the meeting’s agenda," the ministry said.

The two top diplomats will exchange opinions on the schedule of future contacts. As Russian First Deputy Prime Minister Denis Manturov said, a Russia-India summit is planned later this year.

"The ministers will also coordinate their positions on the latest international developments, paying special attention to interactions within the United Nations, BRICS, the SCO and the Group of Twenty. The substantive exchange of opinions between the two officials will also include topics related to shaping a security architecture with greater justice for all in the Asia-Pacific Region, as well as the situation in Ukraine and Afghanistan, and the Israeli-Palestinian conflict," the Russian Foreign Ministry said.

"Moscow and New Delhi view multipolarity as a core factor for maintaining balance and equilibrium within a world order shaped over the previous decades. Russia focuses on building an inclusive political and economic system and promoting a positive agenda while maintaining constructive interstate dialogue," the ministry emphasized.

The broader context of Jaishankar’s visit involves India’s bid to diversify its trade partnerships and reduce over-dependence on traditional markets such as the US. With the US trade talks stalling, and tariffs threatening to disrupt Indian exports, Moscow presents a critical alternative partner, especially given its geopolitical significance and robust industrial base.

In line with this objective, India has also restarted negotiations with the Russia-led Eurasian Economic Union (EAEU), which includes member states Armenia, Belarus, Kazakhstan, Kyrgyz Republic, and Russia itself. This renewed engagement aims to enhance economic exchange within a larger regional bloc, potentially facilitating easier market access, lowered tariffs, and greater investment flows.

The decision to revive talks with the EAEU further signals India’s intent to strengthen its presence and influence in Eurasian economic corridors.

The resumption of EAEU trade negotiations comes at a crucial time when global supply chains are being recalibrated, driven by geopolitical tensions and protectionist trade practices.

For India, aligning more closely with the EAEU could open avenues for exporting pharmaceuticals, textiles, technology, and other sectors where Indian manufacturers have a competitive edge. Conversely, Indian consumers and companies stand to benefit from access to a wider range of raw materials, energy resources, and manufactured goods from EAEU countries.

Analysts note that the growing India-Russia economic engagement also serves larger strategic goals — reinforcing ties in defense collaboration, energy security, and technological innovation. Both countries have long-standing partnerships in defense procurement and nuclear energy, and expanding economic relations will only deepen this multifaceted cooperation.

However, challenges remain as well. Differences in regulatory standards, infrastructure bottlenecks, and limited connectivity hinder seamless trade flows, necessitating targeted policy interventions and stronger institutional frameworks. Both governments are reportedly committed to addressing these hurdles, signaling more active government-to-government coordination.

Ultimately, this diplomatic outreach and renewed trade focus embody India’s broader approach of diversifying partnerships amid rising economic nationalism worldwide. While the US remains a key economic partner, India’s strategic autonomy increasingly drives it to cultivate dependable alternatives.

As External Affairs Minister Jaishankar’s visit unfolds, all eyes will be on the concrete agreements and mechanisms that emerge to translate diplomatic goodwill into tangible trade outcomes. The strengthening of the India-Russia economic corridor, coupled with wider Eurasian collaboration, could prove pivotal in shaping India’s trade trajectory over the next decade — particularly if protectionism deepens in Western markets.

Jaishankar’s visit highlights India’s proactive steps to mitigate risks posed by deteriorating India-US trade relations.