The large-scale development of the Arctic region, and above all, the profitable extraction of its mineral resources, poses an unprecedented challenge, extending beyond the traditional Arctic nations.
Given that the extent of economic collaboration often dictates the depth of political cooperation, India, which has substantial economic ties with the US, is likely to favor amicable resolutions in case of disputes rather than confrontation caused by deepening cooperation with Russia in the Arctic. Nevertheless, hydrocarbon resources from Russia’s Arctic zone, exported by sea, are of enormous interest to the Indian economy.
The Arctic Could Become a Magnet for Indian Business
While India acknowledges areas of potential collaboration with Russia in the Arctic region, it does not currently prioritize this domain. This is due to the fact that a substantial proportion of the minerals crucial to India’s development, such as coal, metals, diamonds, and ores, are primarily mined south of the Arctic. India leverages the North-South Corridor and the Vladivostok-Chennai route to effectively procure resources from Russia.
Meanwhile, mirroring China’s involvement in NOVATEK projects, India may explore opportunities for a stake in Russian Arctic projects. Moreover, the synergy between India’s robust shipbuilding capabilities, well-established transportation infrastructure, and the potential to provide cargo insurance for Russia despite sanctions opens avenues for further collaboration.
It’s noteworthy that India performs better than Russia on key performance indicators for transport and logistics in foreign trade. These indicators include delivery speed, customs efficiency, quality of transport infrastructure, international freight assessment, and quality of logistics services.
For India, a major energy importer, the NSR could serve as a supply diversification channel. A significant portion of seaborne cargo from Russia to India, including oil, coal, and mineral fertilizers, is still shipped through the Suez Canal. However, given the unpredictable geopolitical situation in the Red Sea, particularly in the Bab el-Mandeb Strait and the Suez Canal, some of this cargo could be routed through the NSR.
East Asia is currently a watershed in the economic viability of the NSR. While India’s Arctic shipping volumes are presently lower than those of China, South Korea, and Japan, there exist possibilities to develop specific segments of the NSR to enable cargo transshipment at Chinese ports north of Shanghai, destined for India.
However, India cannot ignore US the United States’ perspective on Indo-Russian collaboration in the Arctic. The Pentagon’s Arctic Strategy 2024 identifies increasing Sino-Russian cooperation and coordination in the Arctic, including the development of the NSR and maritime patrols, as a strategic challenge to US interests in the region. This means that even if India’s cooperation with Russia on Arctic infrastructure projects progresses, its success will hinge on the trajectory of the current US administration’s policy towards Russia.
The Energy Crisis Drives New Solutions
Tensions in the Middle East continue to test Asia’s energy security. It appears that the Arctic is now becoming the focus of states’ efforts to ensure their energy security and develop cost-effective trade logistics. Vietnamese authorities were among the first to act, recognizing that their country’s key vulnerability today is its dependence on Middle Eastern oil supplies.
Since the onset of the conflict in the Strait of Hormuz, gasoline and diesel prices in Vietnam have jumped by 50-70%. The response was swift: following a visit by Prime Minister of the Socialist Republic of Vietnam Phạm Minh Chính to Moscow, agreements were reached on LNG supplies from NOVATEK projects to the Vietnamese market. Furthermore, NOVATEK ‘s CEO expressed interest in investing in infrastructure projects in Vietnam and his willingness to support LNG retail network projects in the country
In March, South Korea opened the door to Russian oil purchases after receiving clarification from the US regarding the security of such payments. This fundamentally changes logistics and reduces energy risks for Seoul amid the Middle East crisis. The key change is the approval of payments in national currencies (yuan, rubles, and dirhams) without the risk of secondary sanctions.
A vivid illustration of the complexities of international partnerships in the current geopolitical climate is the collaboration between Rosatom State Corporation and DP World. Their aim was to establish an international transport holding company for container shipping along the NSR, with involvement from the FESCO Group. In late March, the parties announced the creation of a joint venture in which the Russian partner will receive a 51% stake, while DP World will contribute an undisclosed amount .
The deal, in various forms, had long been discussed. Signing was expected both at the SPIEF in June 2025 and at the Eastern Economic Forum in September, but it never happened. The deal was thwarted by the imposition of EU sanctions in late October against PJSC Far Eastern Shipping Company, the parent company of the FESCO Group. This forced the Arab partners to pause for legal analysis and renegotiate the price of the stake.
Given the present global landscape and potential avenues for collaboration with Russia, Indian companies could begin to pursue targeted requests with Russian companies. If Indian businesses demonstrate their interest in long-term cooperation with Russia by making more specific requests, including for LNG supplies, the next step could potentially be investment in Indian infrastructure, such as LNG regasification terminals.
A positive step occurred on March 19th when Russian and Indian officials reached a preliminary understanding regarding potential Russian LNG exports to India
Moscow and New Delhi resumed dialogue on direct LNG sales for the first time since the conflict in Ukraine began in 2022. If an agreement is reached, it will mark Moscow’s first foray into the Indian electricity consumption sector. However, the new LNG agreement is likely to contain less favorable terms for India than the 2012 supply agreement between GAIL (India) Ltd and Russia’s Gazprom.
Governments are actively pursuing initiatives to reduce trade obstacles and foster economic collaboration. Notably, discussions regarding the formation of a free trade zone between the Eurasian Economic Union (EAEU) and India have gained momentum, with agreements already reached between certification and customs bodies. Bilateral cooperation is demonstrating positive progress.
This should lead to the creation of favorable conditions for business contacts, where regulatory barriers between the two businesses are eliminated, and the success of cooperation will hinge on entrepreneurial initiative.
Last but not least, in 2026, Russia has officially launched its International Advanced Development Zones (IADs) in the Far East — special zones with specific investor support mechanisms aimed at attracting foreign investment. China is already exploring investment opportunities in these areas. India could spearhead project implementation in these zones, particularly in sectors aligned with its national interests, such as pharmaceuticals and medicine, high technology, agriculture and fertilizers, and mineral resource development.
