Modi’s Moscow Mission: How to reignite India-Russia ties

Prime Minister Narendra Modi will embark on his second visit during the current year to Russia for the annual Summit with President Putin on 24^th Dec, 2015. He earlier toured Ufa, the capital of Bashkortostan in Russia on 8-10^th July for the SCO and BRICS Summits. He will be undertaking his end-of-the- year visit to Russia after a satisfying and successful year on the foreign policy front.

PM Modi’s meeting with Putin assumes even greater significance as this is one of the few major partnerships that has failed to take off since the NDA government came to office. This will be, therefore, a significant opportunity for both leaders to dramatically augment bilateral relations, as PM Modi said last week, “to a new level.”

Setting the Stage

Considerable serious preparation has been undertaken for the visit. External Affairs Minister Sushma Swaraj visited Moscow in October for the 21^st Meeting of the India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC). She held detailed discussions with her co-Chair Deputy PM Dmitry Rogozin to set up an ambitious agenda for Modi’s visit. Defence Minister Manohar Parrikar was in Moscow in early November to identify some big-time defence deals that could be announced during Modi’s visit. Russian Deputy PM Rogozin visited Delhi last week when detailed parleys took place to provide a substantial push to bilateral partnership.

Special and Privileged: Time for quantum leap

India and Russia find themselves in an ideal situation today to trigger a quantum leap in their relations. PM Modi has visited more than 30 countries during his tenure of a little more than 18 months. He has provided a huge impetus to India’s engagement with several partners including US, Japan, Europe, several neighboring countries, Africa and others. The one conspicuous exception is Russia. Our relations continue to drift in a rudderless fashion although both sides realize that this is a time-tested partnership of paramount significance that needs to be nurtured with care and attention. Although the relationship has been termed as “a special and privileged strategic partnership,” it has failed to live up to this high-sounding description. Bilateral trade and economic relations are at an embarrassingly low level. They are nowhere near India’s trade turnover with other major partners like US and Europe which hover around USD 100 billion while India-Russia trade wallows at sub USD 10 billion level. China-India trade has exceeded $70 billion.

PM Modi has established a personal rapport with most major international leaders like Obama, Abe, Merkel, Hollande and others. Similar chemistry has so far not been evident with Putin. It is possible that the two leaders have not spent enough time with each other. After all, the visit by Putin to India last year was cut down from 3 days to 23 hours because of his pressing domestic engagements concerning Ukraine. The forthcoming visit would be an ideal opportunity to forge a strategic understanding between the two leaders.

Why Russia is unhappy?

It would appear that Russia is deeply unhappy at India’s expanding relations with the West especially USA. Russia would do well to not hold this against India and focus on the positive aspects of our partnership to take it to significantly elevated levels.

Russia has found itself squeezed into a corner as a result of US and Western sanctions over developments in Ukraine and Crimea. This has compelled it to seek refuge in closer economic and political partnership with China. Ironically, Russia is the junior partner in this relationship. The situation has got further complicated with the shooting down of Russian Sukhoi Su-24M bomber aircraft by Turkey over Syrian territory. The steep decline in global energy prices and the continuing western sanctions have adversely impacted the health of the Russian economy.

India, on the other hand, is the fastest growing emerging economy and has the potential to emerge as the bright spot for world economic growth. Closer economic, commercial and strategic partnership between India and Russia will not only be a win-win situation for both countries, but will also vastly contribute to international peace, security and stability.

Both countries realise the critical need to establish a strategic, privileged partnership in real substantive terms and not merely in name. This is a huge opportunity for both leaders to take relations to highs that were witnessed in the 1970s and ’80s.

What’s on agenda?

So what can be expected from the visit? So far hydrocarbons, nuclear energy, defense equipment, fertilizers and rough diamonds have been the main components of bilateral partnership.

Some big ticket items that are likely to be announced are sale of 200 Kamov-226T helicopters by Russia and progressive indigenization in India. The French whose engines are used in the helicopters are agreeable to the sale as well as transfer of technology. This will be a major component of Russian support to “Make in India” initiative of PM Modi. Some last minute technical details need to be sorted out and it is hoped that this will be accomplished by the time of the visit or soon thereafter.

Decision in principle is also expected to lease another Russian nuclear powered submarine in addition to the 12,000 ton Akula Class INS Chakra leased to India in 2012 for a period of 10 years for USD 900 million.

Delays, huge price escalation and casual attitude of Russian interlocutors in the gift/sale of INS Vikramaditya (Admiral Gorshkov) have left a bad taste in India’s mouth. Both sides need to take cognizance of this and work assiduously to re-establish an atmosphere of trust and confidence.

Substantive discussions took place during Parrikar’s November visit on the purchase and local manufacture of Russian advanced S-400 Triumf air defense missile system for a whopping USD 10 billion. This deal, when finalized, should go a long way in mollifying Russia which will again occupy the position of premier defence equipment supplier to India. Inroads by the US in this sector with orders of USD 10 billion over last few years seem to have piqued Russia. This explains its overtures to Pakistan, reflected in the visit of Defence Minister Sergei Shogu as also offer of sale of Mi-35 “Hind E” attack helicopters and Sukhoi-35 fighter jets. Russia has also reportedly been in discussions with China to supply the same defence equipment to it as it is providing to India. Russia needs to seriously reconsider these issues before taking a final decision. It needs to realize that the more sophisticated defence equipment it supplies to India’s neighbours, the less attractive will its technology become for India.

Why India matters to Russia?

There is no other large country, notwithstanding India’s expanding relations with US, with which India shares commonality of strategic and security interest as it does with Russia. The same is equally, if not more true, for Russia’s relations with India. Russia might be making a virtue out of necessity by having closer ties with China and also reaching out to Pakistan for short term, tactical reasons. It will find that India is the ideal and most suitable partner with which it can have a long-term mutually beneficial and rewarding partnership.

India-Russia relationship has been built and nurtured over several decades and has withstood the test of time. The growing and expanding Indian market is of great benefit to the Russian economy which finds itself under increasing stress because of western sanctions, steep decline in price of energy and increasing expenditure on account of the war in Syria.

Russia needs to appreciate that India’s growing relations with the US and the West are not at the expense of its relations with Moscow. They are necessary to attract capital and technology for creating jobs and for domestic economic development. Moreover, India’s expanding ties with the US and Japan are necessary to provide it with greater strategic and political space in the face of rising assertiveness and growing political, strategic, military and economic might of China. In the medium term this would benefit Russia also when it experiences the unbearable pressure due to Chinese expansion in Central Asia and adverse impact on Russia’s core interests.

Nuclear energy & economic ties

Collaboration in nuclear energy is set to receive a big boost during Modi’s visit. It may be recalled that during President Putin’s visit in 2014, he had offered to construct 12 more nuclear reactors in India over the next 20 years. It is likely that the decision on 10 reactors is announced during the visit.

On the hydrocarbon front, ONGC Videsh has bought a 15% stake in Russia’s second largest oil field for USD 1.27 billion. Participation of India in prospecting for oil, gas and other minerals in Russia’s Arctic shelf will go a long way to strengthen mutual trust, bolster bilateral ties and establish India as a long-term player in Russia’s energy sector.

Bilateral trade and investment ties are an important lynchpin of India-Russia partnership. Performance in this sphere over the last several years has been uninspiring. India will need to settle outstanding issues like the one pertaining to AFK Sistema and second Titanium project to infuse confidence in Russian business to enhance their investments in India.

Concrete measure will need to be devised to achieve the target of USD 30 billion bilateral trade by 2025 agreed to during EAM Sushma Swaraj’s visit to Moscow. Use of national currencies to settle financial transactions could go some way in facilitating bilateral trade. Both countries also need to expedite finalization of the study launched in June 2015 on India’s proposed membership of the Eurasian Economic Union. India’s participation in this growing regional body would prima facie be a win-win outcome with beneficial impact spilling beyond trade issues to strategic and security areas also. Expeditious progress on the International North-South Transport Corridor as well as upgradation of Chabahar port in Iran will be advantageous for all regional economies.

Both countries have been discussing several projects in engineering, aviation, R&D, agriculture, dairy products, food processing, infrastructure and renewable energy under the ‘’Make in India’’ initiative. Some of these could see the light of the day during PM Modi’s visit.

During his recent visit to Delhi, Deputy PM Rogozin mentioned about opportunities for Indian companies in the Russian market on account of exit of several European as well as Turkish manufacturers in the area of food products, textiles, clothing and other consumer durables. Indian business needs to be nimble footed to take full advantage of the emerging possibilities.

Not only was India not critical of Russia’s actions in Ukraine and Crimea as the West had wanted it to be, but it showed a deep understanding of Russia’s response to developments in that country. India has been supportive of Russia’s operations in Syria and has also conveyed solidarity with and mourned the loss of Russian airliner in Egypt and bomber shot down by Turkey in Syria.

Cooperation in outer space, including putting up constellations of satellites, earth remote sensing stations and ground based infrastructure, is another promising area for further expanding relations. Considerable progress can be expected in this area during PM Modi’s interactions in Moscow.

In addition to discussions on economic cooperation that are likely to consume much time during PM Modi’s two day stay in Moscow, deliberations on the growing scourge of terrorism particularly ISIS and ways to deal with it will be an underlying unifying theme. Both countries share the same outlook towards this expanding international menace. The situation in Afghanistan and common approaches to deal with strategic and economic challenges and opportunities in SCO will also receive due attention.

Prime Minister Modi’s December 24-25 visit to Russia provides a promising and exciting opportunity to take the bilateral relationship with Russia to a higher level and infuse the ties with energy and dynamism to become one of the paramount bilateral relations in coming years.

(Ashok Sajjanhar is a former ambassador of India and a commentator on foreign policy issues. This article has been written exclusively for India Writes Network)

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