Expert Speak Raisina Debates
Published on Aug 26, 2016
In his meeting with Rogozin in August, PM Modi described Russia as ''a time-tested and reliable friend.''
India and Russia — special and privileged strategic partnership

Two important foreign guests visited India over the last fortnight. The first was Chinese Foreign Minister Wang Yi followed by Russian Deputy Prime Minister Dmitry Rogozin a week later. It was Wang's second visit to India since the Modi government was sworn in. His first visit was in early June, 2014 just days after NDA government assumed power.

For Rogozin, it was his fourth travel to India. After his June, 2014 tour to establish contact with the Modi government, Rogozin came again in December 2014 to prepare for President Putin's visit to India in December 2014 and yet again in December 2015 to prepare for PM Modi's travel to Moscow later that month for the annual bilateral Summit with Putin.

Going by press coverage and commentaries as well as TV talk shows, Wang Yi garnered more attention than Rogozin. Does this imply that India's relations with China are more important than with Russia? The simple answer is no. In fact, to the contrary! Reason for greater coverage of the visit of Chinese Foreign Minister is because India's relations with China are under stress and adversarial in a number of fields. It is hence natural for people and the media to be focused on ties with China to discern any change or improvement in bilateral equations. On the other hand, relations with Russia have always been warm, friendly and cordial. The fact that Rogozin has visited India four times over the last two years plus is strong testimony that both countries attach prime importance to bilateral partnership. A clear demonstration of mutuality of interest is the fact that annual Summits under the Strategic Partnership that was launched in 2000 have been held without any slippage, notwithstanding the challenging domestic and international circumstances that the two countries have confronted over this period.

Modi and Putin are expected to meet on margins of G-20 Summit in Hangzhou, China in September. Putin will travel to India for 8th BRICS Summit and annual bilateral Summit in Goa on October 15 and 16, 2016.

Meetings between leaders of the two countries will provide a decisive impetus to bilateral ties.

Strong relations with Russia are a key pillar of India’s foreign policy. In his meeting with Rogozin on August 20, 2016, PM Modi described Russia as ''a time-tested and reliable friend.''

Recent years have witnessed rapid growth in all aspects of bilateral partnership encompassing political, strategic, defence acquisition, including joint development, designing and production of military equipment; hydrocarbons — oil, gas and coal; nuclear energy, including construction of nuclear power plants and progressive indigenisation, space cooperation, science and technology — and last, but not the least, cultural collaboration and enhancement of people to people contacts.

The Russia of today is not the Russia of 2014 when it was reeling under the onslaught of western sanctions on account of developments in Ukraine and Crimea, low energy prices, and increasing expenditure on account of war in Syria and unrest in Ukraine. Russia is in the process of rapidly overcoming those challenges and emerging as a confident and resurgent power. With the Indian economy growing at a robust 7.6% per annum, the time is propitious for the two countries to take their relationship to a new high level.

< style="color: #163449;">Defence cooperation

Russia continues to be India's main trading partner in military and technical sphere with more than 70% of the equipment in the Indian Armed Forces being of Soviet or Russian origin. Over the recent years, bilateral engagement has evolved from a supply of end products to technology transfer and joint research and development. Considerable cutting edge and sophisticated technology is being sourced to India from Russia.

The most fruitful and visible example of joint cooperation is successful designing and manufacture of advanced and sophisticated BrahMos supersonic cruise missile for the Indian Armed Forces and export to third countries. Discussions for exports to UAE, Vietnam, South Africa and Chile are at an advanced stage.

List of joint projects between India and Russia is formidable. A significant deal is the recently signed contract for supply and joint production of 200 Russian light helicopters Ka-226T.

Most above projects are in consonance with the Make in India programme launched by PM Modi.

Several projects like the Fifth Generation Fighter Aircraft and purchase of S-400 air missile defence system, etc. are expected to fructify soon.

Russia is in no danger of losing its position of pre-eminence in the Indian defence market.

< style="color: #163449;">Nuclear energy cooperation

Nuclear energy has emerged as one of the most significant and fastest growing areas of bilateral cooperation. Two 1000 MW power plants are already functional at Kudankulam in Tamil Nadu. Four more are slated to come up in the same vicinity. During Modi's visit to Moscow last December, it was decided to establish six more 1000 MW nuclear power plants probably in Andhra Pradesh.

Russian atomic power corporation Rosatom is interested in participating in the Make in India programme for assembly of fuel rods (using fuel pellets) and control system components.

Some components can be assembled in India for use domestically, for export to Russia and to third markets. A road-map to this effect has already been finalised.

< style="color: #163449;">Cooperation in hydrocarbons

Hydrocarbons hold enormous potential for bilateral cooperation. Russia is one of the world's largest producers of oil and gas.

As a result of western sanctions, Russia has adopted a new Asia Pivot strategy, the most marked aspect of which is its turn towards India and China.

Russia has been looking for other assured, stable and steady markets for its energy exports. Energy security in Russia means having long term arrangements for supplying its oil and gas. India's energy demand is growing at a steady, rapid pace. Today India is dependent on imports of oil to the extent of 80% of its requirement and in gas to the tune of 37%. These figures are likely to go up significantly in the coming years. Russia and India hence make an ideal match as producer and consumer.

< style="line-height: 1.5;">India is significantly invested in Russia’s oil and gas sector. Its first investment was a 20% stake in Sakhalin I worth USD 1.7 billion in 2001. This investment has yielded impressive gains. ONGC Videsh Limited (OVL), the overseas arm of Indian state-owned petroleum company Oil and Natural Gas Corporation (ONGC) invested USD 2.1 billion to buy 100% stake in Imperial Energy in 2009. This turned out to be a highly unprofitable investment because of the high price paid and inadequate production from the oil-field. Imperial Energy merged with Sistema, Russia’s fastest growing energy company in 2010 and OVL picked up significant stakes in Sistema owned Bashneft, Titov and Trebs fields off the Arctic continental shelf.

In July 2015, Essar and Rosneft signed a preliminary agreement for Rosneft to acquire 49% stake in Essar’s Vadinar Oil refinery and supply crude to Essar over 10 years. In September 2015, OVL signed an agreement with Rosneft to acquire 15% stake in Vankorneft project, the second largest oil field in Russia. Recently in June 2016, an Indian Consortium of Oil India Ltd., Indian Oil and Bharat Petro Resources Ltd. signed a sale-purchase agreement with Rosneft for acquisition of 23.9 % in the Vankor oil block. OVL is exploring opportunities to acquire a 49% stake in Rosneft's Tagul field.

< style="color: #163449;">Bilateral trade

Bilateral trade and investment is an area which does not measure up to level and pace at which other facets of bilateral relations have expanded. Bilateral trade continues to languish at an abysmally low level of USD 10 billion. The two countries have fixed a target of USD 30 billion by 2025. It appears unlikely that they will be able to achieve this level. Several silver linings have however appeared recently on the horizon. Some of these include: India's prospective membership of the Eurasian Economic Union; development of the International North-South Transport Corridor, trial runs on which took place through Iran and Azerbaijan on August 8, 2016; construction and upgradation of Chabahar seaport to promote and improve connectivity with Central Asia, Russia and Afghanistan.

India's membership of Shanghai Cooperation Organisation will provide several opportunities to promote peace, security and stability in Central Asia and the region. Regional countries need to collaborate actively to ensure that Afghanistan does not descend into conflict and instability leading to catastrophic repercussions for neighbouring countries. Russia and India can play a crucial role in this as also in dealing with the scourge of terrorism emanating from Pakistan, Afghanistan and the Middle East. Unrest and continuing violence in Syria as well as uncontrolled spread of Islamic State, terrorism and radicalisation of youth are other challenges that the two countries need to quell and overcome together.

Both countries have been engaged since 2014 with separate and varied challenges confronting them – Russia with the West and India with Pakistan and China. Both of them need to focus on greater interaction at the highest political level to generate a comfort level that goes beyond transactional relations and develops greater strategic synergy. Our interests and concerns regarding security, stability, terrorism, radicalisation, economic development and growth are identical in most cases. Last two years have delivered significant results in all areas of bilateral cooperation. Time is now opportune for the two sides to upgrade the strategic partnership to ‘’special and privileged’’ level, not only in name but actually in substance.

The author is a former Indian ambassador to Kazakhstan, Sweden and Latvia.

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