India now strong trade partner of Russia, expected to remain so in 2023: S&P Global Market Intelligence

India has emerged as a strong trade partner of Russia and is expected to remain so in 2023, against the backdrop of bilateral trade volatility between Russia and nearly all markets due to the war started by Moscow in Ukraine.

In a report on Monday (Nov 7), S&P Global Market Intelligence highlighted anticipated shifts in trade due to the Russia-Ukraine conflict as well as a positive outlook for containerised trade in 2023, despite a mere 0.7% year-on-year (y-o-y) growth in 2022, led by an estimated slowdown in the second half.

It also highlighted the impact of new International Maritime Organization greenhouse gas reduction measures that will be introduced in 2023.

S&P Global Market economics manager Agnieszka Maciejewska said the trade value of total imports from Russia had increased in recent months, primarily due to rising oil, gas and coal prices, as well as spikes in Russian imports by several countries.

“This group was led by India, which noted a greater than 100% y-o-y increase in Russian import trade values each month after the Russia-Ukraine conflict started in February 2022,” she said.

China

The firm said China is expected to be the biggest importer from Russia in 2023, followed by Turkey, Belarus and Kazakhstan.

However, it said China's current economic slowdown adds considerable uncertainty to the outlook.

Meanwhile, Western trading partners will lose their significance in Russia's trade turnover.

S&P Global Market said this trend will become even more visible if Russia cuts gas supplies to Europe in the winter of 2022-23.

Elsewhere, the firm said US container imports are forecast to grow 5.9% y-o-y in 2022, and 4.2% y-o-y in 2023.

It said with US warehouses being full, major carriers started removing their capacity on the Asia-US trade lane, although not yet on a massive scale.

With no peak season this year, carriers will take out a significant amount of their capacity to protect and boost their rates, said S&P Global Market.