Economic partnership key in future India-Russia ties
Moscow seems to have accepted that bringing in India Inc is best for the long-term relationship.editorials Updated: Dec 27, 2015 23:40 IST
New Delhi and Moscow have struggled to find a basis for their bilateral relationship that goes beyond India buying Russian weapons. The largest gap has been the bilateral economic relationship which became stuck in a public sector groove since the Soviet Union’s collapse and has refused to come out since. While bilateral trade targets have been increased at annual summits, overall numbers declined between 2013 and 2014.
Break down the numbers and the economic relationship looks even more bleak because of the dearth of Indian private sector involvement — and without that a long-term economic relationship with the new India is more or less doomed to stagnation.
The question is whether Prime Minister Narendra Modi’s latest summit with President Vladimir Putin has been able to change this. The innovation has been to bring in private players where the economic relationship is already strong: Defence purchases and nuclear power. By the looks of it, New Delhi has made a determined effort to have the Indian private sector be the favoured partners for the latest round of Russian deals.
Moscow itself seems to prefer to do business with government-owned firms, but it seems to have accepted that bringing in India Inc is best for the long-term relationship. It will be possible to work out whether such private-to-government ties can breathe new life into Indo-Russian commercial relations.
The economic relationship will be all that more important in the coming years because it will provide a counterweight to the growing influence of China on Russia’s behaviour. While Mr Modi and Mr Putin were at pains to stress various points of geopolitical convergence, the truth is that these are increasingly dependent on a green light to Moscow from Beijing.
One of the reasons New Delhi has sought to up its economic relations with Moscow is to provide Russia some alternative, however small, to China. This has only been heightened by Russia’s isolation from the West following the former’s takeover of part of eastern Ukraine.
Thus Russia’s support for India’s attempts to strengthen the besieged Kabul government and renewed interest in the North-South Corridor are good signs. Again, the real test will be what happens on the ground. And this is where the India-Russia relationship has repeatedly fallen short of its true potential — and this is why both sides look for other countries to work with.