Business as usual. Russia remains a key strategic partner for India
EDITOR'S CHOICE | 16.12.2014

Business as usual. Russia remains a key strategic partner for India

President Vladimir Putin's visit has served an important purpose at this juncture, that of underlining politically that Russia remains a key strategic partner for India. With perceived stagnation in India-Russia ties, improving India-US ties and a sharp deterioration in US-Russia relations, for us it was opportune to signal this internationally.

In perspective, the listlessness in India-Russia ties is not new. Since the Soviet Union's demise, India-Russia economic exchanges have remained low, arms trade has excessively dominated bilateral ties, commercialization of Russian technologies has not succeeded except in the nuclear sector, educational ties have been limited, and people-to-people contacts, barring the rising numbers of Goa-bound Russians, have not expanded. Nonetheless, we have persevered with regular annual summits since 2000 when Putin took power and in 2013 declared a "special and privileged strategic partnership".

It is more in contrast with the upsurge of our ties with the United States of America and mounting exchanges with China that India's relations with Russia seem sluggish. The India-US relationship has acquired a positive strategic content after the nuclear deal in particular; our dialogue agenda has become highly diversified, the educational and people-to-people ties have grown, and economic exchanges are now touching $100 billion. China has become our largest trade partner in goods and now visualizes sizeable investments in India.

For India, the relationship with Russia is larger than the sum total of its parts. It remains valuable because of high levels of mutual trust, Russia's historic contribution to building India's defence capabilities and giving us access to some highly advanced technologies. Russia has not pitted our neighbours against us. Our geopolitical interests and views on principles that should govern international relations are largely convergent. For India to have a stable and reliable relationship with at least one major power centre is important.

For these reasons, Prime Minister Narendra Modi has been effusive about our Russia relationship during Putin's visit, underlining that Russia has been a "pillar of strength for India's development, security and international relations", that we have a "friendship of unmatched mutual confidence, trust and goodwill" and a "strategic partnership that is incomparable in content". To allay some concerns, he has affirmed pointedly that changes in international relations will not affect "the importance of this relationship and its unique place in India's foreign policy".

In defence supplies, with Russia riled at losing out in competitive bidding in some recent cases, Modi conveyed the important message that even as India's options for defence cooperation have increased today, "Russia will remain our most important defence partner". While discussing many new defence projects with Putin, Modi has asked for the alignment of India-Russia defence relations with "India's own priorities, including 'Make in India'". Russia's offer "to fully manufacture in India one of its most advanced helicopters", which Modi has said will be pursued quickly, would suggest that the project for light utility helicopters that India badly needs to replace the French-licensed Cheetah and Chetak helicopters could, after two failed tenders, be now awarded to Russia. That Putin responded "very positively" to Modi's proposal that Russia locate manufacturing facilities in India for spares and components for defence equipment it has supplied is noteworthy in the context of persistent complaints by India of Russia's product support deficiencies, though the timelines for resolving this nagging issue remain unclear.

Russia has already an edge over other contenders with regard to civilian nuclear cooperation with India, which it wants to conserve. It has been agreed that Russia will build "at least" 10 more reactors in India beyond the existing two at Kudankulam: six in total at Kudankulam and six at another site to be identified expeditiously, with the important proviso of manufacture of equipment and components in India, joint extraction of natural uranium and production of nuclear fuel. Russia's pitch for 20 to 25 reactors was too ambitious when the outlook on nuclear energy is uncertain and technological advances may affect energy choices in the future.

Modi was right to flag our disappointment at India-Russia collaboration in the hydrocarbon sector, despite Russia being a top producer of hydrocarbons and India a top importer. The outlook has improved with an agreement that envisages joint exploration and production of hydrocarbons in the Russian Arctic shelf, long-term LNG supplies (to begin in 2017 or latest by 2021), as well as a hydrocarbon pipeline system connecting the two countries, even though Putin himself doubts its commercial feasibility. A new dimension has been added to energy ties with the entry of the private sector, signified by the memorandum of understanding between Essar and Rosneft for long-term supply of Russian crude oil.

Expanding the weak economic relationship to give ballast to the strategic partnership has remained a challenge. Two-way trade in goods and services at US $30 billion by 2025 has been targeted this time, with mutual investments of over US $15 billion each way by that date. The 1994 agreement for protection and promotion of bilateral investments will be renegotiated. A Russian company will complete one of the world's biggest butyl rubber producing plants in Gujarat by 2016. Putin seeks Indian involvement in Russia's pharmaceutical industry, in fertilizer production and in the coal sector. He has offered Russia's civil aviation industry support to India, specifically the Sukhoi Superjet 100 and MC-21 aircraft. Measures to increase the share of direct diamond exports from Russia to India have been discussed. Russia is being invited to invest in infrastructure projects like the Delhi Mumbai Industrial Corridor and freight corridors. In the area of joint manufacturing of high-technology products, the initiative of establishing a joint investment fund of $2 billion between Rusnano and suitable Indian partners is noteworthy. Significantly, in the context of the role of the US dollar in global trade and US-led economic sanctions, the two sides will "encourage payments in national currencies for bilateral trade".

Alluding to US/EU sanctions on Russia over Ukraine, the joint statement says that India and Russia oppose economic sanctions that do not have the approval of the United Nations security council. Russia has reiterated its support for India's permanent membership of the UNSC, its Shanghai Cooperation Organization membership, as well as that of Nuclear Suppliers Group, Missile Technology Control Regime and the Wassenaar Agreement. While Russia avoids accusing Pakistan by name for supporting terrorism, the formulation on terrorism in the joint statement is satisfactory, with the two leaders hoping that "all safe havens and sanctuaries for terrorists will be wiped out without delay...." In this broad context, one hopes that Putin will review the decision on Russian arms sales to Pakistan. His position, expressed to PTI before the visit, that Russia's "possible assistance" to Pakistan is "aimed at improving effectiveness of counter-terrorism and anti-drug operations", which "serves the long-term interests of all countries of the region, including India", is reminiscent of specious US arguments in favour of arms supplies to Pakistan.

Putin has declared that he is highly satisfied with his visit and its results, while Modi has stated that the summit had reinforced his conviction in the extraordinary value and strength of the India-Russia partnership. With inopportune US statements before and after Putin's visit cautioning against it, for India it has been "business as usual" with Russia.

Kanwal Sibal,

Tags: India  Russia  Modi  Putin