Remarkable Prospects for Cooperation


Despite its brevity, the annual India-Russia summit once again proved that both nations enjoy a special relationship and the existing gaps between New Delhi and Moscow can be bridged easily, writes Yury Barmin

Vladimir Putin’s recent visit to New Delhi comes at a time when both Russia and India are undergoing major political and economic changes. India is yet to see how Prime Minister Modi delivers on his promises to get the country’s economy back on track, while Russia is facing a grim year ahead trying to balance the sheets with the rouble plunging to record lows. The India-Russia Summit took place against a doubtful background of the strength of the bilateral relationship. So politically, the Modi-Putin meeting served as a reiteration that Indo-Russia ties were as deep and robust as during the Soviet era.

India’s Most Important Defence Partner

India’s deepening defence ties with the US sparked off a lot of criticism among some Russian commentators who doubted Modi’s commitment to the alliance with Moscow. Narendra Modi seemed to have understood Russia’s concerns, and at the summit, reassured Vladimir Putin that the decades-long strategic alliance between Moscow and New Delhi is still a priority for India. “Even as India’s options have increased today, Russia will remain our most important defence partner,” he said.

The standing of the 'strategic alliance' was significantly damaged in June 2014, when Moscow lifted an embargo on supplying weapons and military hardware to Pakistan, which annoyed New Delhi. Later, in November 2014, the Russian minister of defence paid his first ever visit to Islamabad, where the Pakistan-Russia military agreement was signed. What certainly seemed worrying to India were numerous reports that the recent thaw in relations between Russia and Pakistan may result in an arms deal involving the sale of MI-35 helicopters to Islamabad.

Restoring the Damaged Alliance

Among the flurry of agreements signed between the governments and individual companies at the summit, energy and defence were the two spheres of particular interest to Moscow. Vladimir Putin’s main goals during his trip to India were to prove to the West that Russia had completed its energy pivot to Asia and Prime Minister Modi’s reassurance that Russia remained India’s most important defence partner.

Even though half of the 16 documents that were signed by the respective governments at the India-Russia Summit were Memoranda of Understanding (MoU), they collectively opened remarkable prospects for cooperation between both the nations. New Delhi and Moscow inked a nuclear energy agreement, according to which Russia will construct 12 power units in India, including two at the Kudankulam nuclear power plant. The deal will also see Russia become the major provider of nuclear fuel for Indian power plants.

Prior to the summit, there was a lot of speculation regarding the type of deals Russia and India would sign in the energy domain. The Russian media, in particular, expected that Rosneft, Russia’s oil giant, would sell a stake in East Siberian oilfields to Indian companies, but the deal failed to materialise. Instead, Rosneft and India’s Essar signed a ten-year deal, whereby Russia will supply 10 million tones of crude oil to India by sea annually, starting 2015. This contract is reportedly worth $10 billion and could be extended. The significance of this agreement is defined by Russia’s decision to provide a huge discount to Essar and open a $1 billion credit line to the company. Among noticeable unofficial agreements made in New Delhi is Rosneft’s invitation to India’s ONGC to contribute towards Russia’s LNG projects in Siberia, and potentially acquire an interest in two oilfields there.

What was surprising to experts monitoring Putin’s trip to India was the fact that despite Russia’s strong emphasis on defence cooperation and Modi’s reassuring words, only one minor contract to train Indian soldiers in Russia was signed at the summit. According to Modi, the leaders discussed a broad range of defence projects, particularly the manufacturing of an advanced Russian helicopter (likely a twin-engine Ka-226 helicopter) and spare parts for military hardware in India, with the possibility of exports from the country. Further details were scarce.

One issue that continues to be a source of tension in bilateral relations is the Fifth Generation Fighter Aircraft (FGFA) project that is co-sponsored by India and Russia. The initial agreement to jointly produce the fighter was signed in 2010, but its final version is yet to be inked due to disagreements over the parties’ work share in the project. A week after the summit-level talks, several reports claiming that the parties had settled their differences over the fighter aircraft project appeared in the media. Another issue that could have been agreed during the summit was India’s recent decision to import 124 more tanks from Russia to overcome the shortfall of T-90 tanks being built in India through licensed production.

With India and Pakistan eyeing membership in the Shanghai Cooperation Organisation in 2015, Russia’s active courting of Islamabad may be interpreted in the context of this future development. Similarly, New Delhi reaching out to the United States to explore its options in the defence industry proves that both Russia and India need to accept that they are living in an era where multifaceted foreign policy is not a show of disloyalty to one’s traditional partners. Despite its brevity, the summit once again proved that India and Russia enjoy a special relationship and the existing gaps between New Delhi and Moscow can be bridged easily.

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