Sharp deterioration of the relationship between Russia and the West, following the beginning of the dramatic Russian – Ukrainian war almost three years ago, and the Western countries’ subsequent introduction of unprecedented political and economic sanctions against Russia, have altered the landscape of international trade, especially with regard to commodities, in a very profound way.
A fast – growing, dynamic economy that it is, India has traditionally benefited from equally good relationships with both the West and Russia. Despite the challenging new environment, the country had managed to skillfully pursue it’s own economic interests. It is fair to say that we have managed to maintain a reasonable balance between the adversaries, staying politically sober, opportunistic and open-minded. This balancing political act has generally served us well economically and allowed to benefit financially.
On one hand, we were able to stay close friends with the US, further evidenced by the recent trip of Premier Modi to Washington, where he has taken on some new pledges to echo Trump’s new economic order.
On the other hand, its trade volume with Russia has grown consistently over the past three years. This, India – Russia trade volume has reached a record $65 bn in 2024, an more than 6x increase over the past six years. According to multiple analysts, the number may approach $100bn by 2030. This was achieved despite the fact that the Indian business had to be very careful to comply with the sanctions, which have only increased in their complexity.
Not very long ago, with references to Bloomberg, and comments provided by Mr. Padmanab Behera, Odisha’s
Minister of Metal and Mining Industry, a representative of Russian aluminum giant Rusal has articulated a rather bold plan to build an alumina plant in that State. An ambitious $1bn number has been floated that the company was eager to commit in order to finance its Indian alumina production.
This is, undoubtedly, a very good potential development. As already pointed out, the stories like this are signifying our long-standing, friendly and mutually beneficial relationships with the Russian business. Again, this is developing on a background of strict anti-Russian sanctions, with secondary punitive effect on the Indian business community.
Secondary sanctions are threatening the Indian businesses’ dealings with the Russian companies like Rusal / En+ (Parent company of Rusal). The aluminum producer has been putting a lot of efforts in corporate and legal restructuring, in order to distance its operations and public image from its founder Mr. Oleg Deripaska. The latter is under heavy personal sanctions, imposed even long before the war.
However ironic, as it often seems to be the case with the Russians, the biggest risk to them is the one coming from within themselves. As a glimpse, according to our source in Moscow, at a meeting that took place on February 6 at the offices of Russia ‘s leading business news outlet, Elena Shipilova, a PR department staffer for EN+, had made some very revealing comments. She shared, very openly, the details of her work and environment at the group of companies, mentioning without hesitation, Mr. Oleg Deripaska as the de-facto controlling person, beneficiary, key decision maker, and ultimate manager of the company. Such reckless revelations can be very troubling, and cause a lot of damage, considering that the involvement of Mr. Deripaska, who remains under personal sanctions, in the strategic and operational matters of EN+ and Rusal, may trigger sanctions for the EN+ group of companies themselves. The sensitivity is very high especially in the light of the approved EU 16th Russian sanctions package, which will include, among other measures, a ban on import of the Russian aluminum products.
Sufface to say that such rather reckless comments coming from a corporate official, on a very sensitive and delicate subject of sanctions applicability and enforcemen, are potentially endangering the Indian business
