Vladimir Putin’s visit can oil India-Russia ties | ht view | Hindustan Times
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Vladimir Putin’s visit can oil India-Russia ties

There are serious possibilities of cooperation between India and Russia due to renewed focus on the international North South Trade Corridor as well as India’s possible entry into the Shanghai Cooperation Organisation, writes Gulshan Sachdeva.

ht view Updated: Nov 28, 2014 09:59 IST
Gulshan Sachdeva

Russian President Vladimir Putin will visit India in December for the 15th annual India-Russia Summit. This will be his 11th summit with the Indian leadership since he signed the strategic partnership with Atal Bihari Vajpayee in 2000. Between 2008 and 2011, Russia was represented by Dmitry Medvedev. Prime Minister Narendra Modi had a brief interaction with Putin during the sixth BRICS summit in July. He described that “even a child in India, if asked to say who is India’s best friend, will reply it is Russia because Russia has been with India in times of crisis.” As chief minister of Gujarat, Modi had signed a protocol of cooperation between the state and the Astrakhan region of Russia in 2001.

There are serious possibilities of cooperation due to renewed focus on the international North South Trade Corridor, India’s possible entry into the Shanghai Cooperation Organisation, increasing linkages with the Customs Union of Belarus, Kazakhstan and Russia as well as the possibilities of bringing Russian hydrocarbons by the land route to India. Still, the immediate task would be to involve Russia seriously in the ‘Make in India’ initiative, particularly in defence and infrastructure. Besides, some practical steps are needed in trade and commerce, which has been the weakest link in bilateral ties since the early 1990s. During earlier summits, the trade turnover targets set were $10 billion by 2010 and $15 billion by 2015. We are nowhere close to achieving these figures. Immediate action would be needed to resolve problem areas known for years, viz the information gap and visa problems faced by Indian companies.

Generally, India and Russia share excellent political relations. As a result, the strategic partnership was elevated to ‘special and privileged strategic partnership’ in 2010. In the 14 summits since 2000, the two have signed 128 agreements/memorandums of understandings/declarations in the areas of military and technical cooperation, space, nuclear energy, hydrocarbons, trade and economics, terrorism, education and culture. As some of these declarations remained on paper, now the focus should be on deliverables with clear timelines.

Russia has a clear comparative advantage in the arms industry, hydrocarbons and nuclear energy. And India has provided good business in all these areas. According to the Stockholm International Peace Research Institute’s (SIPRI’s) arms transfer database, at 1990 constant prices, India imported weapons worth about $32 billion from Russia between 1992 and 2013. This was 73% of total arms imports by India during this period. Since 2007, India is the largest export market of Russian weapons.

In a few areas, military technical cooperation has already evolved and moved towards joint research and production. Notable examples include the BrahMos missile, fifth generation fighter aircraft and multi-transport aircraft. The SU-30 aircraft and T-90 tanks are also produced in India under licence. With changing production and procurement dynamics of the Indian arms industry, there are indications that Russia is eager to participate further through ‘Make in India’.

Indian companies have invested about $6.5 billion in Russia, mainly in the energy sector in Sakhalin 1 and Imperial Energy. Russian company Rosneft recently offered ONGC stakes in two Siberian oilfields. The real challenge, however, is to attract Russian companies to India. So far, they have invested only about $1 billion in India.

As a result of the Ukrainian crisis, Russia is facing serious difficulties, including economic sanctions, with the West. Both Europe and Russia are trying to diversify their energy dependence on each other. This is the right time to forge some serious energy ties with Russia. There are reports indicating a vision document being prepared outlining a gas pipeline, an oil pipeline and a swap mechanism deal in which Russia may facilitate Indian oil payments to Iran. These initiatives may prove a game changer in India-Russia ties.

(Gulshan Sachdeva is chairperson, Centre for European Studies, JNU, and currently holds the ICCR Chair on Contemporary India at the University of Leuven, Belgium. The views expressed by the authors are personal.)