By Suresh Unnithan
As Russian President Vladimir Putin touches down in the Indian capital today for the 23rd India-Russia Annual Summit, the eyes of the world—particularly those in Washington and Brussels—are fixed on this diplomatic rendezvous with a mix of curiosity and apprehension. This two-day state visit, the first by a Russian leader to India since the onset of the Ukraine conflict, underscores the enduring “Special and Privileged Strategic Partnership” between the two nations, forged over decades and elevated in 2010. Yet, amid escalating U.S. tariffs, a plummeting rupee, and whispers of an emerging China-Russia-India axis, the summit arrives at a pivotal moment for India’s foreign policy. Will New Delhi continue its policy of strategic neutrality, deftly balancing ties with Moscow without provoking its “Big Brother” in Washington? Or does this engagement signal a bolder assertion of autonomy in a multipolar world?
The summit, hosted alternately in India and Russia since its inception, serves as the highest institutional dialogue mechanism in bilateral ties. President Putin will hold bilateral talks with Prime Minister Narendra Modi tomorrow, exchanging views on regional and global issues. A ceremonial welcome by President Droupadi Murmu and a state banquet will cap the formalities, while a slew of agreements in trade, economy, healthcare, academics, culture, and media are anticipated. These pacts aim to review progress in bilateral relations and chart a vision for deeper cooperation, building on the 2000 Declaration on Strategic Partnership that has since expanded into multifaceted collaboration.
A Time-Tested Pillar of India’s Foreign Policy
Russia’s role as a “longstanding and time-tested partner” has been a cornerstone of India’s diplomacy, providing diplomatic cover during crises like the 1971 Indo-Pak War and technological transfers withheld by the West. From nuclear submarines to space exploration, Moscow has been instrumental in bolstering India’s defense capabilities—60-70% of its military platforms remain of Russian origin. The partnership’s resilience was evident post-1998 nuclear tests, when Russia defied Western sanctions to stand by New Delhi.
Bilateral trade, a priority area, has surged dramatically, reaching a record $68.7 billion in fiscal year 2024-25, up from $8.1 billion in 2020. This growth, driven largely by discounted Russian energy imports, positions India as Moscow’s second-largest market after China. Both nations eye $100 billion by 2030, with efforts underway for an India-Eurasian Economic Union Free Trade Agreement to slash tariffs and barriers. Yet, the trade is lopsided: Indian exports to Russia stood at a mere $4.88 billion last year, dominated by pharmaceuticals, machinery, and chemicals, while imports—primarily crude oil, coal, and fertilizers—towered at $63.84 billion. Russia’s fertilizers alone meet 80-90% of India’s needs for key categories, directly impacting food security and farmer costs.
Global Scrutiny: Fears of a New Axis?
In Europe and the U.S., Putin’s visit is viewed not just as routine diplomacy but as a potential harbinger of geopolitical realignment. Analysts in Washington fret that closer India-Russia ties, layered atop Moscow’s deepening dependence on Beijing, could coalesce into a China-Russia-India axis challenging U.S. global supremacy. This apprehension is amplified by India’s abstentions in UN votes on Ukraine and its role in BRICS as a counterweight to Western-led institutions. European envoys from Britain, France, and Germany recently drew India’s ire with a joint op-ed in an Indian newspaper criticizing the visit as enabling Russia’s war machine—a move New Delhi deemed “unacceptable” interference in its sovereign ties.
The U.S., under President Donald Trump, has been particularly vocal. Trump’s administration has weaponized economic levers, imposing 50% tariffs on Indian goods in August 2025—half explicitly as punishment for New Delhi’s Russian oil purchases. These tariffs, among the highest levied on any nation, stem from a ballooning U.S.-India trade deficit but are intertwined with sanctions on Russian entities like Rosneft and Lukoil, announced in October and effective November 21. Trump has berated India for “reselling” discounted Russian crude at profit, accusing it of funding Moscow’s Ukraine efforts. New Delhi counters that its imports prioritize energy security for 1.4 billion people, adhering to international sanctions while diversifying sources.
This visit tests India’s balancing act. As one Atlantic Council expert notes, it reasserts New Delhi’s “special relationship” with Moscow, signaling to Washington that it won’t be bullied into isolation. Yet, with a U.S. trade deal in negotiation—vital for easing tariffs—Modi must tread carefully. Recent gestures, like cutting Russian oil buys and inking a 2.2 million metric ton LPG deal with the U.S., aim to appease Trump without severing Moscow ties.
Post-COVID Energy Boom and Sanctions Squeeze
The post-COVID era marked a watershed in India-Russia energy ties. As global prices spiked, India ramped up imports of discounted Russian crude—from under 1% of total imports pre-2022 to 35-37% by 2024-25, saving an estimated $12.2 per barrel. This shift, peaking at 1.8 million barrels per day (bpd) in 2025, fueled bilateral trade growth but drew U.S. ire. Sanctions on Rosneft and Lukoil have since slashed volumes by a third, with November imports at 1.27 million bpd and December projections dipping to 1.0 million bpd—or even 800,000 bpd temporarily. Indian refiners, wary of secondary sanctions, are pivoting to non-sanctioned Russian entities and opaque channels, while boosting U.S. imports to 10.7% in October.
The Kremlin views this dip as temporary, pledging deeper discounts on Urals crude to retain India as a lifeline offsetting EU losses. For India, it’s a pragmatic hedge: Russian oil remains cheaper, but diversification—via “Mission 500” targeting $500 billion U.S. trade by 2030—mitigates risks.
Economic Crunch: Rupee’s Record Plunge Amid Uncertainty
India’s visit preparations coincide with domestic headwinds. The economy, Asia’s fastest-growing major, expanded 8.2% in Q3 2025—its strongest in six quarters—yet the rupee breached 90 per USD on December 3, hitting a record low of 90.2950 amid persistent outflows and stalled U.S. trade talks. Down 5% year-to-date and 6.43% over 12 months, the currency’s woes stem from trade imbalances, foreign investor jitters, and Trump’s tariffs exacerbating a widening current account deficit. The Reserve Bank of India intervened with dollar sales, but limited ammo leaves the rupee vulnerable to further slides toward 90.30.
This “economic crunch” amplifies the stakes of Putin’s trip. While Russian deals offer short-term relief—via rupee-ruble settlements and BRICS financial tools like linking Mir-RuPay systems—deeper integration risks alienating U.S. investors and inflating import costs. Markets, superstitiously linking past Putin visits to Nifty dips, are already hedging volatility.
India’s Path Forward: Neutrality with Nuance
India’s response to this conundrum? A masterclass in “multi-alignment.” New Delhi vows to safeguard Russia ties from “third-country pressures,” as a Moscow analyst put it, while signaling to Washington that autonomy isn’t antagonism. Defense talks will likely focus on S-400 deliveries, AK-203 localization (aiming for 600,000 units by 2030), and potential Su-57 co-production—framed as technology transfers to localize production. Yet, Russia’s arms share in India’s imports has halved to 36% since 2014, reflecting diversification toward U.S. and French platforms.
On the axis front, India rebuffs notions of a formal CRI bloc, viewing Russia’s China tilt warily as a rival to its Indo-Pacific ambitions. BRICS remains a venue for de-dollarization experiments—national currency trades, New Development Bank loans—without anti-Western overtones. As Gerashchenko notes on X, India gains “cheap oil in rupees” from Russia but eyes U.S. tech and capital for long-term growth.
Expected outcomes include 10 inter-governmental pacts and 15 commercial deals, plus a labor mobility agreement for Indian IT workers in Russia. These will diversify beyond energy, targeting Indian exports in engineering, pharma, and agri-products to Russia’s 2.3% import share.
Toward a Resilient Partnership
Putin’s visit isn’t a pivot toward confrontation but a pragmatic recalibration. In a fractured world, India leverages Russia’s vulnerabilities for gains—discounted resources, defense tech—while insulating against sanctions via diversification and U.S. outreach. As GTRI analysts envision, outcomes range from cautious tie-strengthening to ambitious Eurasian integration, but the core remains: managing dependencies without choosing sides.
For the Global South, this exemplifies leadership: prioritizing sovereignty amid great-power jostling. As Modi and Putin toast to deepened bonds, India reaffirms that neutrality isn’t passivity—it’s power. The rupee may wobble, tariffs bite, and axes loom, but New Delhi’s tightrope walk ensures it remains a pole, not a pawn, in the evolving world order.
