India-Russia Industrial Cooperation

India and Russia engaged in discussions on industrial cooperation, focusing on critical areas like rare earth and critical mineral extraction.

Key Areas of Cooperation

• Rare Earth Minerals: Discussions come amid China’s restrictions on exporting certain rare earths, affecting India’s automobile production. China dominates the global market, supplying 85-95% of rare earths.
• Aerospace Science and Technology:
  • Plans for establishing a modernized wind tunnel facility.
  • Production of small aircraft piston engines.
  • Joint development in carbon fiber technology, additive manufacturing, and 3D printing.
• Other Key Areas:
  • Aluminum, fertilizers, and railway transport.
  • Capacity building and technology transfer in mining equipment, exploration, and waste management.

US Tariffs on Indian Goods

The US announced an additional 25% tariff on Indian goods due to national security concerns related to Russia’s actions in Ukraine.

Implications and Context

• India’s competitors, like Vietnam, Bangladesh, and China, have lower US tariffs ranging from 19% to 30%.
• India’s exports in exempted categories (pharmaceuticals, electronics) account for nearly half of its $80 billion annual goods exports.
• China purchases significantly more Russian oil than India, highlighting geopolitical dynamics.

Global Trade Research Initiative (GTRI) Insights

• The US avoids targeting China due to its leverage over critical materials vital for US defense and technology.
• The EU and US have also maintained substantial imports from Russia.
• Tariffs could potentially reduce Indian exports to the US by 40-50%.