The St. Petersburg International Economic Forum (SPIEF), an annual event since 1997, plays a significant role in bringing together business leaders for discussions on global economic issues. This year, however, the representation of Indian businesses is not as extensive as it has been previously. The recent elections in India, coupled with Russia’s broadening interests toward China, are the primary reasons behind this restrained participation. Despite these challenges, there are several areas where Indo-Russian economic cooperation can still flourish, including start-ups, artificial intelligence (AI) and manufacturing digitisation.
Historical Engagement: Defence, Energy, Pharmaceuticals
Historically, Indo-Russian economic ties have largely concentrated in three sectors: defence, energy, and pharmaceuticals. Defence, in particular, has been a longstanding cornerstone of the bilateral relationship, originating from the Cold War era when India was one of the largest buyers of Soviet weaponry. Energy has also formed a critical part of the equation, with Russia supplying significant volumes of oil and natural gas to India. Lastly, the pharmaceutical sector is another area where both countries have seen substantial cooperation, with Indian generic drugs finding a large market in Russia.
The New Growth Drivers: Start-ups, Artificial Intelligence, Manufacturing Digitisation
Today, there’s a growing impetus to diversify the range of sectors involved in the Indo-Russian economic partnership. The rise of start-ups, AI, and manufacturing digitisation — collectively known as the Fourth Industrial Revolution technologies — could serve as the new growth drivers in this regard. Both India and Russia have a burgeoning start-up scene, with young entrepreneurs leveraging technology to find solutions to pressing societal and business challenges. AI, in particular, is being harnessed for a multitude of applications, from predictive analytics for businesses to smart public services for citizens. Similarly, efforts are being made to digitalise manufacturing processes, ushering an era of increased productivity and efficiency.
Key Facts on Indo-Russian Economic Relations
| Sector | Contribution |
|---|---|
| Defence | Leading area of cooperation with India being one of the largest buyers of Russian arms |
| Energy | Significant volumes of oil and natural gas supplied by Russia to India |
| Pharmaceuticals | Indian generic drugs find a large market in Russia |
| Start-ups | Growing sector with potential for bilateral cooperation |
| Artificial Intelligence | Emerging technology with wide-ranging applications |
| Manufacturing Digitisation | Potential for increasing productivity and efficiency in manufacturing processes |
The Road Ahead: Exploring New Opportunities
Going forward, there are numerous opportunities that India and Russia can explore to further strengthen their economic ties. Given their respective strengths in the technology sector, both countries could collaborate on joint research and development projects, exchange of best practices, and cross-border investments in start-ups. Additionally, leveraging AI and digital technologies for more efficient and sustainable manufacturing could constitute another promising area of partnership. At the policy level, both governments could also consider instituting measures to facilitate greater business exchanges – such as easing visa restrictions for business travellers, establishing direct air connectivity, and reducing trade barriers — thereby setting a robust foundation for future growth and collaboration.
