India-Romania Bilateral Trade and Investment Relations: An Overview

India and Romania have established themselves as important trade partners, building on a foundation of  friendly political relations and mutual cooperation. Petroleum, petrochemicals, metallurgy, and power sectors are central to their strong bilateral ties.

In February 2024, India and Romania celebrated 75 years of diplomatic relations and the 10th anniversary of their extensive partnership, which was established in 2013 and enforced in the following year. The extensive partnership has been instrumental in advancing cooperation in areas such as trade, defense, agriculture, space exploration, energy, infrastructure, and technology.

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India and Romania also share robust economic ties, facilitated by the India-Romania Joint Economic Commission (JEC), which serves as a key platform for enhancing bilateral trade and investment. The JEC between the two countries was established in 1974 and has since held 18 rounds of discussions.

Key agreements and initiatives between India and Romania

Latest agreements between India and Romania include:

1. MoU on tourism cooperation.
2. Joint statement establishing an extensive partnership.
3. Agreement for the exemption of visa requirements for diplomatic passport holders.
4. Cultural exchange programme for 2022–2027.
5. Defense cooperation agreement (March 30, 2023)

Romania’s strategic importance as a European partner for India

Romania, as a member of the European Union (EU), can play a role in the ongoing negotiations for an India-EU Free Trade Agreement (FTA). The proposed FTA aims to reduce tariffs and promote deeper trade and economic integration between India and the EU.

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In February 2024, Romanian Foreign Minister Luminita-Teodora Odobescu visited New Delhi and inaugurated the new premises of the Embassy of Romania in India. During her visit, the foreign minister reiterated Romania’s stand on strengthening bilateral ties and enhancing multilateral cooperation.

A joint declaration issued on this occasion highlighted promising areas for future collaboration, including energy, information technology and communications (IT&C), and manufacturing. Both countries have also agreed to collaborate on global challenges, such as climate change, energy security, and sustainable development.

India-Romania trade relations

India’s primary exports to Romania include vehicles, electrical machinery, pharmaceutical products, and organic chemicals. Whereas Romania’s main exports to India consist of machinery, optical instruments, nuclear reactors, and chemicals.

Source: Department of Commerce, GoI

Source: Department of Commerce, GoI

Source: Department of Commerce, GoI

India and Romania Double Taxation Avoidance Agreement

India and Romania have established a Double Taxation Avoidance Agreement (DTAA) to promote economic cooperation and prevent double taxation of income earned in either country. Signed in March 1987, the DTAA aims to foster cross-border investments and trade by eliminating tax barriers.

Source: Income Tax Department, GoI; India Briefing

Foreign investments between India and Romania

According to the Ministry of External Affairs, Indian investments in Romania are valued between US$1–1.5 billion, with prominent companies like Wipro, Dr. Reddy’s Labs, Sun Pharma, and Sunwave Pharma establishing a strong presence in the country. A notable investment occurred in April 2021, when Wipro acquired METRO Systems Romania SRL, further solidifying India’s footprint in the Romanian market.

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Conversely, Romanian investments in India come from companies such as Atlantia SPA, Saira Seats SAS, Simest SPA, Summer Conf SRL, Hanna Instruments Romania SRL, Omnia Professional SRL, FSS Activ Group SRL, STX RO Electrotulcea SRL, and Mihaela Carmen Popa.

India-Romania defense cooperation agreement

On March 28, 2023, India and Romania signed a Defense Cooperation Agreement aimed at expanding military collaboration. It encompasses a wide range of areas, including training, defense equipment, technical assistance, military medicine, and research and development (R&D), laying the foundation for enhanced collaboration between their armed forces.

The accord was signed during a bilateral meeting in New Delhi between Simona Cojocaru, Romania’s Deputy Minister of Defense, and Giridhar Aramane, India’s Defense Secretary. This agreement indicates Romania’s growing focus on engaging with Indo-Pacific countries, aligning with the EU’s strategy for deeper cooperation in this crucial region.

Key highlights:

• Enhanced collaboration: Romania’s defense companies, such as Aerostar, are positioned to collaborate with Indian industries through co-production, sub-licensing, or joint ventures, leveraging existing partnerships like Mig-21 maintenance.
• Joint oversight: A Joint Committee on Defense Cooperation will oversee the implementation of the agreement, meeting periodically in both countries to decide on activities based on mutual priorities and interests.
• Global significance: This partnership reinforces India’s role in upholding a rules-based international order and democratic values, contributing to global peace and security.

India-Romania space collaboration

The two countries are also advancing cooperation in the space sector, with Romania’s National Institute for Aerospace Research “Elie Carafoli” (INCAS) playing a vital role. INCAS, a research institution in aerospace sciences and a key participant in EU R&D policy making, is actively involved in collaborative projects with the Indian Space Research Organisation (ISRO), including India’s Gaganyaan space program.

Broader areas of cooperation

Beyond trade and defense, Romania and India could explore complementarities in high-tech research, tourism, engineering services, and academic exchanges. Romania’s expanding startup ecosystem and expertise in IT programming present opportunities for collaboration in technology.

Future prospects

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To further enhance ties, India and Romania must diversify their areas of collaboration and explore untapped potential in sectors like tourism, startups, and environmental sustainability. As active players on the global stage—India as a major economy and contributor to UN peacekeeping, and Romania as a member of the EU and NATO—the two countries are well-positioned to address global challenges such as supply chain disruptions, conflict, and climate change.

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