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Friends only in official circles

The shadow of the Soviet model limits the growth of Indo-Russia relationship.

india Updated: Dec 25, 2012 23:27 IST

Russia and India are in a bilateral relationship that has both feet stuck in the past. This is unfortunate because the two countries have no differences on the geopolitical front and work well in the multilateral arena. However, too much of what goes on between Moscow and New Delhi resembles what took place between the two during the Soviet era. The core limitation of the bilateral relationship, as Russian and Indian officials are the first to admit, is in the economic arena. Too much trade is still driven by the two governments. New Delhi buys Russian nuclear plants, heavy machinery and the like in the odd billion-dollar purchase. It is not a good sign that the biggest financial numbers continue to come from mass purchases of Russian weapons.

India Inc, the real driver of the modern Indian economy, continues to see Russia as a difficult place to do business and prefers the friendlier environments of the West and Asia. Unsurprisingly, the two governments talk of bilateral trade touching a mere $20 billion by 2020 - even while India speaks of reaching $100 billion with China or Southeast Asia. Bilateral investment is negligible. This economic stagnation is only exacerbated by the paucity of civil society engagement between India and Russia. Indian students go to Russia to study only as a last resort. Tourist traffic is indifferent. Post-liberalisation India knows of Russia largely as a type of salad.

This is why the Supreme Court's cancellation of telecom licences for, among others, Russia's Sistema Shyam TeleServices - a Russian-Indian joint venture - has been so unfortunate. It represented the sort of large private sector investment that the bilateral relationship requires in the coming century. Sadly, President Vladimir Putin's visit underlined how difficult it is for Moscow to look beyond New Delhi. Russia seems to expect the Indian State to intervene in the Sistema case. That is what the new relationship should be getting away from: Moscow phoning New Delhi for special favours. Russia's attempt to exempt itself from the civil nuclear liability law, however flawed the latter may be, is another throwback to the past.

The bigger picture may be in the failure of Mr Putin to use the past decade's commodity boom to develop an entrepreneur and rule of law based economy in Russia. This would have created a perfect partner for India. Unfortunately, there remains too much of the Soviet Union in the way Russia runs itself today. That, in turn, weighs on what India and Russia can do together. Good intentions are, by themselves, insufficient for a lasting relationship. There have to be both common interests at the State level and a comfort factor at the civil level. India and Russia continue to struggle with the latter part of the equation.