How much do India, Russia, China trade and what goods do they buy?

Trade among China, India, and Russia escalated to $452 billion in 2023, reflecting a growing economic bloc within the Shanghai Cooperation Organisation (SCO) as these nations push for a non-Western global economic order amid US tariff pressures. Post-Ukraine war sanctions, Russia's exports have significantly reoriented towards China ($129bn) and India ($66.1bn), largely comprising energy products, while India continues to run substantial trade deficits with both nations. This dynamic is further highlighted by recent US tariffs on Indian imports, specifically citing India's ongoing discounted Russian oil purchases.

Analysis

A significant geopolitical and economic realignment is underway, evidenced by the surge in trilateral trade between China, India, and Russia to $452 billion in 2023, a substantial increase from $351 billion in 2022. This growing bloc, operating within the Shanghai Cooperation Organisation (SCO), is solidifying as an alternative to US-led economic structures. The primary driver is Russia's strategic pivot to Asia following Western sanctions; China is now its top trade partner, receiving $129 billion in exports, primarily energy. India has also dramatically increased its imports from Russia to $66.1 billion, with 88% being discounted energy products. However, this has created significant imbalances and risks. India now runs a major trade deficit with both partners and, critically, faces new punitive 50% US tariffs on its exports for continuing to purchase Russian oil. This action jeopardizes India's relationship with its largest export market, the US, which bought $81.4 billion of its goods in 2023. In contrast, China appears to be in a stronger position, cementing its role as the industrial supplier to this bloc with exports of $110 billion to Russia and $125 billion to India, while navigating its own trade dynamics with the West.

Key Decisions for Investors

• The strengthening of the SCO economic axis is a structurally positive development for China-focused equities (MCHI), as Beijing benefits from Russia's reoriented commodity flows and growing exports to both Russia and India, reinforcing its regional dominance.
• Investors with exposure to India (INDA) must exercise caution, as the new 50% US tariff directly threatens key export-oriented sectors and introduces significant downside risk, potentially outweighing the economic benefits of discounted Russian energy.
• The diverging outlooks suggest a potential relative value strategy, favoring long positions in China (MCHI) against a more cautious or underweight stance on India (INDA) until the economic impact and geopolitical fallout from US tariffs on India are fully priced in.