India’s relations with Russia may not have the scope and depth of its alliance with the erstwhile Soviet Union, but they remain time-tested, reliable and warm. As Russia’s president, Vladimir Putin has made five visits to India, but the one that he remembers the most is when both countries signed a historic declaration on a strategic partnership in 2000. India’s BJP-led NDA Government then was headed by Prime Minister Atal Bihari Vajpayee. Fourteen years later, both Russia and India have strengthened their “special strategic partnership.” Coincidentally, India again has a BJP-led NDA Government under the leadership of Prime Minister Narendra Modi. Both leaders had met earlier during the BRICs summit in July and G-20 meeting in Brisbane in November. There are a clutch of 20 agreements that have been signed, thirteen of which are commercial in nature, ranging from energy to defence. Clearly, the showpiece is Russia’s commitment to help India in nuclear power generation. Besides, the four reactors in Kudankulam in Tamil Nadu, both countries outlined an ambitious vision for building at least 10 more reactors with the highest standards of safety in India. In his statement, President Putin in fact upped that number to 20 reactors. India’s plans for developing nuclear power in a big way have been hampered by its liability law. Indications are that Russia has agreed “in principle” to our nuclear liability law, which obviously entails factoring in the huge costs involved. In a major boost to India’s ‘Make in India’ initiative, Russia has offered to fully manufacture its most advanced helicopters in the country, including the possibility for exports to third countries. As India’s defence sector has been opened up for foreign participation, it has requested Russia to set up manufacturing facilities for spares and components for defence equipment in the country. A not-so-well-known fact is that PM Modi visited Astrakhan region several times when he was chief minister of Gujarat. Both countries agreed to strengthen bilateral inter-regional cooperation and linkages between Indian and Russian cities to promote greater people-to-people contacts like Astrakhan and Tatarstan with Gujarat, New Delhi-Moscow, Mumbai-St Petersburg, among others. However, the weakest link in Indo-Russian relations is in the economic sphere. Bilateral trade is only $10 billion. In their joint statement, both leaders agreed to enhance this to $30 billion by 2025. Two-way investments then are expected to be over $15 billion. Targets, however, are easy to set, but difficult to achieve. The need is uppermost to tackle whatever barriers there are for closer economic engagement. Logistical difficulties in terms of the lack of direct transportation routes and inadequacy of banking linkages are perhaps the two most important barriers. Not surprisingly, businessmen in both countries have focussed their energies on tapping other lucrative markets, especially in the western countries. Interestingly, the issue of a possible transition to payments in national currencies is also being explored. This is to be welcomed, as it is a throwback to earlier times during the Soviet regime when rupee-rouble trade flourished. No doubt, an area where bilateral ties can acquire fresh ‘energy’ is oil and gas co-operation, including the possibility of a hydrocarbon pipeline connecting Russia with India. ONGC Videsh Ltd (OVL) is eyeing a stake in two oilfields in Siberia. It is already getting one million tonnes of oil from Sakhalin 1. The issue of OVL’s participation in hydrocarbon exploration in the Arctic is also being discussed by both countries. Beyond energy, a game changer from the Putin visit is the prospect of Russia’s top diamond miner, ALROSA, having long-term supply contracts of rough diamonds with more Indian firms. India produces more than 70 per cent of all the polished diamonds in the world. Mumbai is fast emerging as a major centre, rivalling Dubai and Antwerp.
Accordingly, it has been decided to create a special notified zone, in which mining companies can import rough diamonds on a consignment basis and export unsold ones. Russia is also interested
in participating in the Delhi-Mumbai industrial corridor and helping build smart cities. In 2016, it expects to construct the world’s largest butyl rubber producing plant in Gujarat. If all these agreements bear fruition in the years ahead, druzhba-dosti is bound to be a sounder economic footing.
