Quick Overview
India’s engagement with Russia received a major boost at the 23rd Annual Summit, with major agreements in defence, trade, nuclear energy, connectivity, and Arctic cooperation. At the same time, the Indian Rupee hit a record low due to FPI outflows, widening trade deficit, rising imports, and uncertainties in India–US trade negotiations. These two developments highlight India’s evolving foreign policy, strategic partnerships, and macroeconomic vulnerabilities, making them crucial for UPSC and law entrance examinations.
India–Russia Strategic Deepening: Key Outcomes of the 23rd Annual Summit
The 23rd India–Russia Annual Summit reinforced the Special and Privileged Strategic Partnership, marking 25 years since its formal establishment. Both countries signed 16 agreements covering defence, energy, healthcare, education, and culture, demonstrating continuity in bilateral trust despite changing geopolitical realities.
1. Strategic & Economic Cooperation
Target of USD 100 billion trade by 2030 under Programme 2030.
Acceleration of the India–Eurasian Economic Union (EAEU) FTA.
Collaboration on payment systems and settlement challenges caused by sanctions.
Strengthening energy partnership across nuclear, hydrocarbons, and renewables.
2. Connectivity Corridors
Both sides prioritized three critical geoeconomic corridors:
International North–South Transport Corridor (INSTC)
Chennai–Vladivostok Maritime Corridor
Northern Sea Route (NSR)
Russia will also train Indian specialists in polar-water navigation, strengthening cooperation in the Arctic region.
3. Russian Far East & Arctic Cooperation
India’s presence in the Russian Far East and the Arctic has expanded through:
2024–29 cooperation roadmap across mining, agriculture, energy, and maritime logistics.
Regular Arctic consultations and support for India’s role as an Observer on the Arctic Council.
4. Civil Nuclear & Space Partnership
Continued work on Kudankulam Nuclear Power Plant, India’s largest civilian nuclear project.
Collaboration across nuclear fuel cycle technologies.
Strengthened ISRO–Roscosmos cooperation in human spaceflight, navigation systems, and planetary missions.
5. Defence & Multilateral Cooperation
The defence partnership now shifts toward co-production and joint R&D, aligned with India’s Make-in-India push. Russia reaffirmed support for India’s:
UNSC permanent membership
BRICS Chairship (2026)
Entry into the International Solar Alliance and CDRI
Joint counter-terrorism commitments emphasized zero tolerance for terror financing and strict implementation of UN conventions.
Challenges and Corrective Measures in India–Russia Relations
Key Challenges
Delays in S-400 and submarine deliveries due to the Ukraine conflict.
Unbalanced trade (India imports > USD 63 bn; exports < USD 5 bn).
Banking sanctions disrupting payments.
Russia’s growing dependence on China.
Fraudulent recruitment of Indian nationals into Russian forces.
Suggested Measures
Accelerate indigenous production under Aatmanirbhar Bharat & iDEX.
Expand market access via India–EAEU FTA.
Use alternative payment mechanisms like Vostro accounts and rupee settlements.
Strengthen migrant protection via the MADAD and eMigrate portals.
Indian Rupee Falls to ₹90.43 per USD: Causes & Implications
The Rupee hit an all-time low due to structural and immediate economic shocks.
1. What is Rupee Depreciation?
It is a market-driven fall in the value of INR relative to foreign currencies under India’s managed floating exchange rate system.
2. Positive Effects
Boosts exports due to competitive pricing.
Increases value of remittances for Indian families.
Encourages domestic manufacturing by making imports costlier.
3. Negative Effects
Imported inflation due to pricier crude oil, electronics, fertilizer.
Higher foreign debt servicing cost.
Increased current account deficit (CAD).
Reduced purchasing power and consumer demand.
Factors Behind Rupee Depreciation
Foreign Portfolio Investors withdrew ₹1.48 lakh crore since Jan 2025.
India–US trade deal uncertainty created market anxiety.
Rising imports of gold, oil, electronics.
Merchandise exports dropped 11.8%, but imports surged 16.6% in Oct 2025.
Gold imports jumped by nearly 200%, worsening the CAD.
How Can the Rupee Be Stabilised?
1. Boost Rupee-Based Trade Settlement
Expand Special Vostro Rupee Accounts (SVRAs).
Promote Local Currency Settlement agreements.
2. Strengthen External Sector Stability
Enhance currency swap arrangements.
Maintain strong forex reserves.
Smooth volatility via calibrated RBI intervention.
3. Improve Global Acceptance of INR
Expand UPI International, Masala Bonds, INR-based lending to non-residents.
Work toward eventual inclusion in the IMF SDR Basket.
4. Domestic Reforms
Increase high-value exports.
Reduce gold imports through monetisation schemes.
Maintain stable inflation and fiscal discipline.
CLAT/Exam Relevance Summary
For UPSC (GS2 & GS3)
India–Russia relations touch upon bilateralism, defence, nuclear cooperation, geopolitics, and Arctic strategy.
Rupee depreciation relates to monetary policy, external sector stability, CAD, and global macroeconomic shocks.
For CLAT & Other Law Exams
Enhances understanding of international agreements, economic terminology, global trade dynamics, sanctions, and financial stability.
Useful for GK, Current Affairs, Legal Reasoning (especially economic policy impacts).