India-Russia trade has jumped 3.6x compared to the pre-war period, entirely on account of rise in India’s imports from Russia.
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India-Russia trade has jumped 3.6x compared to the pre-war period, entirely on account of rise in India’s imports from Russia. Russia’s share in India’s imports jumped from 2.1% to 10.0% . As such, India’s trade deficit with Russia scaled a fresh peak of USD 4.8 bn in Jan-23 (India’s total trade deficit stood at USD 16.3 bn in Jan-23). Three key commodities have been driving this change – crude oil, fertilizers, and edible oils. With Russian crude oil (Urals) trading at an average discount of USD ~27 pb (vs. Brent), we estimate this to have lowered India’s import bill (and therefore trade deficit) by approx. USD 10 bn between Apr-Jan FY23. We expect India’s current account deficit to narrow to USD 72 bn in FY24 from USD 86 bn in FY23. However, rising imports from Russia could provide some downside risk to our estimates.