Russia is considering non-energy joint ventures and product localization in India. Russian firms are in talks over manufacturing engineering, shipbuilding, IT, renewable energy, oil refining, and metallurgy. This move is intended to expand trade and increase non-resource and non-energy goods. 

 

Author : Akshita Jain | EQmint | Finance News

Russia has been actively investing in non-energy joint ventures with India, including manufacturing,engineering, IT, shipbuilding, metallurgy, andpharmaceuticals, as well as ongoing energy deals to diversify trade, to promote India’s “Make in India” initiative and to achieve a $100 billion trade goal by 2030. 

 

The main areas include creating local production for industrial goods, digital tech, and defense (such as BrahMos missiles), funded by Russian funds such as RDIFand banks, indicating a deeper economic integration beyond commodities.

 

This is a development that occurred in the context of the bilateral annual summit in December, which had a strong economic agenda. “India is the absolute top priority of Moscow’s foreign economic agenda,” Andrey says.

 

Key​‍​‌‍​‍‌​‍​‌‍​‍‌ Areas of Non-Energy Investment

• Manufacturing & Engineering: Local production of machine-building, advanced manufacturing, and industrial products with the participation of Russian companies is the highlight of the collaboration.

• Technology & IT: Digitization and technology sectors attract a larger share of new-business investment through joint operations.

• Shipbuilding & Metallurgy: Considerable discussions have taken place on the localization and production of these heavy industries.

• Defense: BrahMos Aerospace JV, which is a model of success, is actively going on with plans for further collaboration; tank engine production is one among them.

• Pharmaceuticals: The two countries are setting up production facilities of pharma and Active Pharmaceutical Ingredient (API) by a joint venture, benefiting from Russian facilities. 

Strategic Goals & Support

• Diversification: The key focus of the strategy is to reduce reliance on energy and defense sectors for trade between the two countries; the share of non-resource exports and imports will be increased dramatically.

• “Make in India”: Russia has been very active in the relationship between the two countries from the very beginning, supporting local production and industrial growth within India.

• Financial Backing: Russian Direct Investment Fund (RDIF), with the help of Sberbank and VTB Capital, is channelling significant funds (around 100 billion rubles) towards helping Russian companies to penetrate the Indian market.

• Trade Target: All of this revolves around the goal of a $100 billion bilateral trade in 2030 as per the 5-year economic ​‍​‌‍​‍‌​‍​‌‍​‍‌program.

Funding for Non-renewable Joint Venture Investment

• Financial Mechanisms: The RDIF is in negotiations for a $1 billion joint fund to support these expansions, and 96% of bilateral transactions are now done in national currencies (rupees and rubles) to avoid international sanctions.

• Trade Imbalance: These non-energy investments are specifically designed to address the high trade deficit in India, as Indian non-energy exports remain around $4.9 billion compared with over $60 billion of Russian imports, mostly oil.

Broader Strategic and Regional Cooperation

• Defence and Military Cooperation: While not strictly a commercial JV, defence remains a strong pillar. Cooperation is shifting towards joint research, development, and co-production under the “Make in India” initiative. Existing collaborations include the BrahMos missile system and licensed production of Su-30MKI aircraft and T-90 tanks. Russia has committed to delivering the remaining S-400 air defence systems by 2026.

• Space Exploration: Both nations are deepening their partnership in the peaceful use of outer space. Key areas include cooperation in human spaceflight programs (supporting India’s Gaganyaan mission), satellite navigation, and joint development of rocket engines.

• Science and Technology: A joint roadmap aims to boost collaboration in areas like nanotechnology, materials science, and digital technologies, with a focus on commercialization and supporting start-ups.

• Regional Development: A specific program for cooperation in the Russian Far East for 2024-2029 provides a framework for investment in agriculture, mining, pharmaceuticals, and maritime transport, including the development of the International North-South Transport Corridor (INSTC) and the Chennai-Vladivostok Eastern Maritime Corridor.

2026 Outlook for Russia and India

India will take up the Chair of the BRICS in 2026 and intends to institutionalize these economic processes with Russia, particularly in climate finance and sustainable technology. At the same time, negotiators are attempting to conclude a Free Trade Agreement (FTA) with Eurasian Economic Union (EAEU) by mid-2026 to eliminate any remaining non-tariff barriers.

 

For more such information : EQmint

Resource Link : WhalesBook