Living with the sanctions regime

Putin's December visit to India aims to strengthen ties, enhance trade, and address imbalances amid shifting global relations and US sanctions.

Russian President Vladimir Putin’s upcoming visit to New Delhi for an annual bilateral summit in December is being seen as an opportunity to add greater heft and give new direction to one of India’s legacy partnerships at a time when international relations are being rewritten because of the churn on the global stage. It will also be an opportunity for India to reassert its policy of strategic autonomy and backing for a multilateral world order against the backdrop of the US trying to unilaterally dictate trade terms for other nations.

As the Russian envoy pointed out, when sanctions are used only to pressure Moscow’s partners, they only spread resentment (REUTERS)

It is in this context that Russian ambassador Denis Alipov’s statement that India and Russia are set to improve trade settlements and institute mechanisms to limit the risk of Western sanctions on Moscow is significant. He has said Russian banks have adapted to Western sanctions, including the freezing of accounts by the US and the EU and disconnection from the SWIFT system, while Indian credit institutions have minimised the risk of secondary sanctions. Equally interesting were his remarks that both countries have shifted to national and alternative currencies for more than 90% of trade settlements, and that mutual settlements have become more secure and diversified. The government of President Donald Trump has wielded sanctions and tariffs in a purely transactional manner for short-term goals, a recent example being the one-year exemption granted to Hungary from sanctions on Russian energy purchases.

In an increasingly multipolar world where the US’s actions have reduced its global standing and forced more and more countries to explore new options to cope with the uncertainty triggered by Trump’s trade policies, larger nations will prioritise sovereignty and goals and find ways to take forward bilateral ties. This is what is happening in the case of India-Russia relations, which has seen a resurgence thanks to Trump’s whimsical policies. As the Russian envoy pointed out, when sanctions are used only to pressure Moscow’s partners, they only spread resentment.

As for Russia and India, the ties are becoming more broad-based, even though defence collaboration remains the key. Operation Sindoor indicated the centrality of Russian-origin weaponry to India’s armed forces. The two sides must now focus on addressing the imbalance in trade caused by India’s enhanced purchases of Russian energy and other commodities in the past two years. The upcoming summit provides the ideal platform for a long, hard look at these issues.