China-Russia Power Asymmetry and its Implications for India

Context

• The Russian invasion of Ukraine in 2022 has significantly altered the global geopolitical landscape, particularly by strengthening the ties between Russia and China.
• The deepening Sino-Russian partnership has raised concerns globally, including in India, where questions have been raised about the reliability of Russia as a security partner.

Strengthening Sino-Russian Relations

• Shift in Global Alliances: The invasion has led to a stronger trans-Atlantic alignment against Russia and pushed Russia closer to China.
  • This shift raises concerns about Russia’s reliability as a security partner for countries like India, which has traditionally viewed Russia as a trusted ally.
• Economic Dependence: Despite appearances of a balanced trade relationship, there is a significant asymmetry:
  • In 2023, 30.4% of Russia’s total exports went to China, while only 3% of China’s total exports were from Russia.
  • Over 70% of Russia’s exports to China were energy products in 2022, highlighting Russia’s dependence on China for its economic stability.
• Joint Grievances Against Western Dominance: Both countries share frustrations with the U.S.-led financial system, particularly regarding the dominance of the dollar and the SWIFT payment system.
  • Following sanctions on Russia, both nations have sought alternatives to reduce reliance on Western financial systems.

Economic Asymmetry

• Trade Imbalance: The trade dynamics reveal a stark imbalance:
  • In 2023, imports from China accounted for 36% of Russia’s total imports, while exports to China represented only about 5% of China’s total imports.
  • This dependence is further illustrated by the fact that China’s share in Russian imports of critical machine tools increased from 28% in 2021 to 59% in 2022.
• High-Priority Goods Dependency: Russia has become increasingly reliant on China for essential goods needed for its military and industrial sectors.
  • By 2023, 89% of Russia’s high-priority import needs were sourced from China.

Implications for India

• Geopolitical Concerns: Despite goodwill in India-Russia relations, Moscow’s geopolitical alignment now favours Beijing over New Delhi.
• Limited Trade with Russia: Trade between India and Russia remains minimal compared to the burgeoning Sino-Russian trade relationship.
  • In FY 2023-24, trade between India and Russia was approximately $65.7 billion, but this pales in comparison to the extensive economic ties between China and Russia.
• Strategic Autonomy at Risk: The growing dependence of Russia on China raises questions about Moscow’s ability to maintain autonomy in its foreign policy decisions.
  • If forced to choose between aligning with Beijing or New Delhi, it is likely that Moscow would lean towards Beijing due to economic necessity.

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