The India-Russia partnership has been among the “steadiest big relationships” in the last 70-80 years, and President Vladimir Putin’s visit to New Delhi was about “reimagining” the ties with a focus on economic engagement, External Affairs Minister S. Jaishankar said on Saturday (December 6, 2025).

In an interactive session, he also disagreed with views that Mr. Putin’s visit could complicate India’s negotiations with the U.S. on a bilateral trade agreement.

“No, I disagree with you. I think everybody knows that India has relations with all the major countries in the world,” Mr. Jaishankar said at a media summit in Delhi.

“I think for any country to expect to have a veto or a say in how we develop our relations with others is not a reasonable proposition.”

Mr. Jaishankar was asked if Mr. Putin’s two-day visit to New Delhi that focused largely on significantly enhancing the economic dimension of India-Russia ties will have a bearing on the negotiations with the U.S. for the proposed trade deal.

“Because remember, the others can expect the same. I think we’ve always made it very clear that we have multiple relationships. We have a freedom of choice,” he said.

“We talk about what is called strategic autonomy and that continues and I cannot imagine why anybody would have reason to expect the contrary,” he added.

The External Affairs Minister (EAM) acknowledged that the focus of the Trump administration has been on trade and noted that India’s approach in navigating it is totally driven by national interests.

“I think clearly right now trade is the most important issue there. We have, it’s clearly very central to the thinking in Washington, much more than it was to earlier administrations, which is something which we have recognised, and we are prepared to meet,” he said.

“But we are prepared to meet it on reasonable terms. I mean, for those of you who think that diplomacy is about pleasing somebody else I’m sorry, that’s not my view of diplomacy. I mean, to me, it is about defending our national interests,” he said.

The India-U.S. relations are going through possibly the worst phase in the last two decades after Washington imposed a whopping 50% tariff on Indian goods, including 25% levies for New Delhi’s procurement of Russian crude oil.

The two sides are currently holding negotiations for the proposed a trade deal “We believe that there can be a landing point for our respective trade interests. Obviously, that is something which will be negotiated hard because it has an implication for livelihoods in this country,” he said.

“At the end of the day, for us the interests of the workers and the farmers and the small business and the middle-class matters. When we look at a trade agreement with a country like the U.S., you have to be extremely judicious about your position, about what you put on the table,” he said.

On President Putin’s two-day trip to India, Mr. Jaishankar said for a “big” and “rising” country like India, it is important to maintain good cooperation with as many important players as possible in the world in line with freedom of choice.

“I think if you look at India-Russia, the world has seen a lot of ups and downs in the last 70-80 years. I’ve said this before and I’ll say it again, India, Russia have actually been among the steadiest big relationships, big power or big country relationships in the world,” he said.

“Even Russia’s own relationship with China or U.S. or Europe has had its ups and downs. Our relationships with many of these countries have had it too,” he added.

In any relationship, Mr. Jaishankar noted, it is natural that some aspects of it develop and some kind of don’t keep up.

“In the case of Russia, what had happened for a variety of reasons, I think they visualised the West and China as their primary economic partners. We visualised perhaps the same. So, the economic side of the relationship had somehow not kept pace. You can see that in the numbers,” he said.

Mr. Putin’s visit in many ways was about reimagining the relationship, he said.

“It was about building dimensions and facets which it lacked or didn’t have in enough measure. if I were to pick two or three big takeaways, for me, the mobility agreement where Indians would now much more seamlessly find work opportunities in Russia was one big outcome,” he added.

The understanding on a joint venture on fertilisers was another major take away, according to Mr. Jaishankar.

“We are the world’s second biggest fertiliser importer after Brazil. It’s a recurring issue that we have. And also, because the fertiliser sources have been very unstable. They’ve turned on and turned off the tap. So, we had an agreement to create an important substantial joint venture on fertilisers,” he said.

On India’s ties with China, Mr. Jaishankar said the key point that New Delhi made was that peace and tranquillity in the border areas is a prerequisite for good relations and it is being maintained and is being built upon.

“But it’s not like that was the only issue in the relationship. There were many other issues, some of which predated Galwan. So, there are issues about trade, there are issues about investment, there are issues about competition, about subsidies, about fairness, about transparency,” he said.

“These are real issues as well. We are trying to work our way through some of it. Some of it is easier, some of it is harder,” he added.

To a question on Pakistan Army Chief Field Marshal Asim Munir, Mr. Jaishankar said much of India’s problem emanates from the military of that country and even referred to its support for terror groups.

Like there are good terrorists and bad terrorists, there are good military leaders and apparently not-so-good ones, he said, seen as a reference to Mr. Munir.

“I think for us, the reality of the Pakistani army has always been and much of our problems actually emanate from them. When you look at the terrorism, when you look at the training camps, when you look at the sort of a policy of almost ideological hostility towards India, where does that come from? It comes from the army,” he said.

Mr. Jaishankar said India and Pakistan should not be hyphenated at all.

“Look at the state of Pakistan. See the differentials and the capabilities and frankly the reputation on either side. We should not get over obsessed and hyphenate ourselves with them. There is a challenge, there are issues that we’ll deal with,” he added.

On Bangladesh, the EAM said India is a well-wisher of that country.

“We think as a democratic country, any democratic country likes to see the will of the people ascertained through a democratic process.”

“I’m quite confident that whatever comes out of the democratic process would have a balanced and mature view about the relationship and, hopefully things would improve,” he said.

Asked if former Bangladesh prime minister Sheikh Hasina will continue to stay in India, he said, “She came here in a certain circumstance, and I think that circumstance clearly sort of is a factor in what happens to her. But again, that is something which she has to make up her mind.”

The European Union has set out a plan to upgrade its strategic ties with India, even as it warned that India’s military exercises with Russia and its purchase of Russian oil are risks to the growing strategic ties between Brussels and New Delhi.

The European Commission and the EU’s top diplomat Kaja Kallas released ‘A New Strategic EU-India Agenda’ on Wednesday (September 17, 2025) in Brussels, and urged the European Parliament and Council (i.e., the heads of member states) to adopt it.

Ms. Kallas called India a “crucial” partner for the EU and sought closer ties with New Delhi as she outlined the strategy that encompassed trade, technology, security, defence and climate. She was speaking at a televised press conference in Brussels on Wednesday (September 17, 2025).

“The EU and India have the potential and determination to shape one of the defining partnerships of the 21st century,” said the document.

Brussels and New Delhi are in the midst of negotiating a free trade agreement (FTA), with the EU’s trade chief Maroš Šefčovič visiting New Delhi last week for talks with Commerce Minister Piyush Goyal.

“We are also negotiating an agreement of exchange of classified information and deepening ties between defence industry [sic],” Ms. Kallas said, adding that there were hesitations here among the College of Commissioners (comprised of Commissioners from the 27 EU countries).

“India’s participation in Russia’s military exercises and its purchase of Russian oil stand in the way of closer ties, because ultimately, our partnership is not only about trade, but also about defending rules-based international order,”  Ms. Kallas said. 

“It is of utmost importance to the EU that any enablement of the war be curtailed,” the strategy document says.

The negotiations with New Delhi would address these challenges with the aim of adopting a joint roadmap at the next EU-India summit in early 2026, according to Ms. Kallas.

Prime Minister Narendra Modi said he was “delighted” by the adoption of the new strategic document.

“We remain committed to an early and peaceful resolution of the Ukraine conflict,” he said, reflecting on his phone call on Wednesday with European Commission President Ursula von der Leyen.

India and the EU have been seeking to bolster ties in the face of increasing geopolitical uncertainty and challenges in their trade relationships with the U.S. The Trump administration has slapped a 25% tariff on India (in addition to a ‘reciprocal’ tariff of 25%), straining ties between New Delhi and Washington. The relationship has begun to thaw in recent days.  U.S. President Donald Trump greeted Mr. Modi for his birthday over a phone call on Tuesday.

Trade between India and the EU has grown over 90% in the last decade, Mr. Šefčovič said at Wednesday’s press conference, but the two sides had just “scratched the surface”, according to the Commissioner. Brussels and New Delhi are hoping to conclude a trade deal by the end of the year.

Mr. Šefčovič said he was in frequent touch with Mr. Goyal but wished that there had been “more progress” on talks during his visit to New Delhi last week. He also said that Indian trade negotiators have a reputation for being “tough”.

Tariff barriers

On the question of agricultural tariffs, Mr. Sefcovic said that the issue was not about numbers but rather about whether what was being offered was commercially meaningful, after taking into account tariff and non-tariff barriers. He cited India’s Qualitative Control Orders (QCOs) as an example and said they were something the EU should consider in its negotiations.

The 14^th round of trade talks is due to take place in Brussels from October 6-10.

Quizzed specifically on India’s participation in the recent Zapad-2025 military exercises led by Russia, Ms. Kallas said she had spoken to External Affairs Minister S. Jaishankar on Tuesday. She reiterated that exercises with Russia and buying oil were issues to the relationship.

“The question is always whether we leave this void to be filled by somebody else. So we try to fill it ourselves,” she said in response to the question on cooperation with India. She responded similarly, when quizzed on India’s apparent détente with China.

The College of Commissioners had agreed that the EU should deepen ties with India to “not really push them into Russia’s corner”.

Ms. Kallas cited the principle of ‘nothing is agreed until everything is agreed’ several times, including when asked about how the trade talks would be impacted if India did not take on the EU’s concerns regarding Russia.

Published – September 17, 2025 09:47 pm IST

Oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia on June 4, 2023.
| Photo Credit: Reuters

The story so far: As India continues to import oil from Russia, it is getting tougher for the country to pay for it. On the one hand, it faces repercussions of breaching the oil price cap of $60 a barrel put in place by the U.S. and European nations as Russia offers lower discounts on its crude. On the other hand, using currencies like the Chinese yuan for payments, which India has already started doing, has its own geopolitical ramifications amid strained ties with Beijing.

Where do oil imports from Russia stand?

Until a year ago, most of India’s oil imports came from West Asia, the U.S., and West Africa but today, a bulk of crude unloading at India’s ports is likely to be coming from Russia.

In February 2023, Russia surpassed Saudi Arabia to become the second biggest exporter of crude oil to India in FY23. Since the start of Russian President Vladimir Putin’s “special military operation” in Ukraine on February 24, 2022, Moscow has been hit by Western banking and economic sanctions. Against this backdrop, it found a ready market for its goods, especially crude oil, in India and offered steep discounts. India, meanwhile, unlike the West, chose to not join the list of countries formally imposing sanctions on Moscow.

As a result, India’s imports of crude oil from Russia increased nearly 13 times in 2022-23 to over $31 billion from less than $2.5 billion in 2021-22. Russia is now the largest supplier of oil to India, displacing traditional players such as Iraq, Saudi Arabia, and UAE. In the four-month period between November 2022 and February 2023, Russia took over the top spot from Iraq. An analysis by Reuters showed how India accounted for more than 70% of the seaborne supplies of Russian-grade oil under $60 dollars a barrel in May.

Which currency is being used for payments?

For starters, as part of war-induced sanctions on Moscow, the U.S., the EU, and the U.K. have blocked multiple Russian banks from accessing the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global secure interbank system. An estimated $500 million is pending for goods already shipped by Indian exporters to Russia and it is now not possible to get the payments through the SWIFT channel.

Thus, in an effort to economically strain Russia, the West targeted one of its biggest traded goods — energy — for which transactions have traditionally been dollar-dependent. Besides an oil ban jointly agreed between multiple countries last year, it was also decided to cap the price to a maximum of $60 per barrel of Russian oil transported through waterways. While India is not a formal signatory, it has tacitly agreed to maintain the price cap as much as possible. Besides, banks and traders may not want to get involved in transactions that breach the oil cap over fears of repercussions for their funds. Until recently, the blends of oil India was importing from Russia were largely below the price cap fixed by G-7 countries and India was able to pay for the oil using dollars. However, Russia has lowered its discounts due to high demand from China and lower-grade oil is now in short supply.

Also Read Data | Russia’s exports to India rise further, trade deficit balloons

What about the rupee-rouble mechanism?

Notably, India was in negotiations with Russia to reactivate the rupee-rouble trade arrangement, which is an alternative payment mechanism to settle dues in rupees instead of dollars or euros.

However, media reports showed in May that the rupee-rouble payment mechanism could not take off. There are a couple of reasons for this — analysts point out there is scepticism on the rupee-rouble convertibility as the rouble’s value is kept up by capital controls and not determined by the market, as in the case of reserved currencies. On the flip side, Russia has also pointed out that it finds the rupee to be “volatile”.

Lastly, and more significantly, the unforeseen surge in oil trade between India and Russia in one year alone has led to a massively ballooning trade deficit. India’s trade deficit with Russia touched $43 billion in 2022-23 as it imported goods worth $49.35 billion while its exports were at $3.14 billion. This has led to staggering amounts of Indian rupees in Russian banks that cannot be used by Russia in its war efforts.

Is de-dollarisation being attempted?

Since the dollar is largely considered the global reserve currency, many countries have seen the U.S. sanctions as a way for America to weaponise the dollar. This has given rise to countries looking at de-dollarisation, which means the replacement of the U.S. dollar with other currencies as the global reserve currency.

India too, has recently released a roadmap for the internationalisation of the Indian rupee to create broader acceptance. It is important to note, however, that the value and the acceptability of any currency depend mainly on its purchasing power, that is, the number of goods and services that can be bought using it and right now, the daily average share for the rupee in the global foreign exchange market is ~1.6%, while India’s share of global goods trade is ~2%.

Meanwhile, Indian refiners have also settled some non-dollar payments for Russian oil in the Chinese yuan and the UAE dirham.

What next?

Experts have pointed out that while India could use the yuan for payments, there are concerns about how that would appear geopolitically as it continues to have strained ties with Beijing since the border standoff. Besides, another solution could be to counter the deficit with Russia by getting it to make investments in energy projects in India or to invest in government bonds.