Three Years of the Modi Government

India-Russia: Navigating New Geopolitical Waters

30 Jun, 2017    ·   5315

Amb PS Raghavan reviews India-Russia relations and says there are strong reasons for consolidating bilateral relations even as New Delhi seeks to strengthen relatively newer strategic links

The Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) government in New Delhi inherited some wrinkles in the traditionally smooth India-Russia strategic partnership.

Russia saw the enhanced nuclear and defence cooperation foreshadowed by the India-US nuclear deal as a re-orientation of India’s foreign policy. A slackening of India-Russia cooperation in nuclear energy and defence strengthened this assessment, though it was probably attributable more to an atrophy of government functioning. India’s support for a harsh West-sponsored resolution on Syria in the UN Security Council in July 2012 was seen as succumbing to US pressure. Rightly or wrongly, the Russians saw the previous government in India, the United Progressive Alliance-II (UPA-II), as pro-US.

Russia was also unsure about the incoming NDA government. Despite excellent relations during the BJP's Atal Behari Vajpayee led-government in the past, it suspected that the BJP did not give priority to the Russia relationship.

The new government immediately sought to address this concern. On the margins of the July 2014 BRICS Summit in Brazil, Indian Prime Minister Narendra Modi confirmed to Russian President Vladimir Putin his government’s commitment to expanding India-Russia cooperation. In an interview to CNN’s Fareed Zakaria, he refused to criticise Russia’s actions in Ukraine.

The December 2014 India-Russia Summit imparted strong momentum to relations. Joint manufacturing in India of Russia’s Ka226 helicopters was announced as the first Make in India project in the defence sector. A “strategic vision” of nuclear energy cooperation was adopted, incorporating an ambitious target of over 13000 MW in two decades, with progressive indigenisation and collaboration across the nuclear fuel cycle. The two leaders agreed to exploit synergies in the hydrocarbons sector and strengthen the economic pillar of the partnership.

The Ka226 project has progressed from an inter-governmental agreement to establishment of a joint venture. Innovative mechanisms were evolved for manufacturing naval frigates and major refits of submarines, with technologies to be progressively transferred to India. Long-pending acquisition proposals, as well as new ones – like the S-400 air defence system – were processed expeditiously.
Collaboration on sensitive technologies has gathered momentum. The perennial issues of spares and engineering support for Russian defence platforms are being addressed by transfer of technology (ToT) for component manufacture and maintenance workshops in India. 485 lines have been identified for ToT to support the Su-30MKI aircraft fleet. A high-level Science and Technology Commission will facilitate cooperation in cutting-edge technologies. 

Two 1000 MW units of the Kudankulam nuclear power plant are on-stream, two are under construction and agreements for a further two were signed in June 2017. Equally important is the progress on other tracks: localisation of technologies and the fuel cycle. 

Indian hydrocarbons companies invested approximately US$6 billion in Russia’s oil fields in the last two years. A Russian consortium led by oil major Rosneft acquired Essar Oil’s refinery and port for an estimated US$13.4 billion – the largest FDI inflow into India. In the first half of 2017, Russia exported over 1 million tons of crude oil to India – over 20 times the annual figure over the past several years.

Enhancing bilateral trade (approximately US$ 7-8 billion) has been in focus. Discussions on the International North-South transport corridor (INSTC) from India to Russia through Iran have intensified after the loosening of international sanctions against Iran. This could be a game-changer, since the corridor would cut freight and transit time each by about half. A Free Trade Agreement with the Eurasian Economic Union (comprising Russia, Kazakhstan, Belarus, Kyrgyzstan and Armenia) is under negotiation. There are other initiatives to reduce the transaction costs of trade, like a customs “green corridor,” reconciling phytosanitary standards and arrangements for trade in local currencies.

Tata Power is contemplating an investment in coal in eastern Siberia.A fund of US$ 1 billion, shared by Russian sovereign fund RDIF and India's National Investment and Infrastructure Fund, has been set up to promote technology and infrastructure investments.

The full economic potential is still to be tapped. Progress has sometimes been slowed by government departments functioning in silos or at cross purposes. Information on economic opportunities has not percolated to India's corporate sector, which is influenced by unflattering media images of Russia. It is not widely known that only a few countries have imposed sanctions against Russia. Western companies have found channels to circumvent them.

All the same, the achievements in the three years are significant. However, the public narrative is of a dilution of the strategic partnership. This is inspired by assessments of Russian actions in India's neighbourhood.

Russia-Pakistan relations have improved, with arms sales and joint military exercises. Russia has not publicly criticised Pakistan for cross-border terrorism. It has stepped up contacts with the Taliban, indicating deviation from its support for the Afghan government’s national unification efforts. Russia’s strategic partnership with China, including transfers of advanced military technologies, has caused worry. 

These issues are discussed between the foreign ministries, national security advisers and the two leaders. Such discussions are necessarily confidential. Conclusions have to drawn from official statements and other indications. The bonhomie between Prime Minister Modi and President Putin in St Petersburg after their tête-à-tête of over two hours indicated satisfactory discussions on matters of mutual concern. Prime Minister Modi asserted at their joint press conference that they share the same perspectives on Afghanistan, West Asia and the Asia Pacific. Officials affirm a strategic convergence between the two countries, though tactical approaches are different. 

President Putin has recently reiterated Russia’s support of the Afghan government’s reconciliation efforts. A senior Russian official confirmed in 2016 that no further arms exports to Pakistan are contemplated. Russia recently reiterated its position that India-Pakistan differences should be settled bilaterally as per the Shimla Agreement and the Lahore Declaration.

Russia-China relations are shaped by economic complementarities and China’s support in Russia’s faceoff with the West. However, Russia is also developing relations with Vietnam and Japan, which have troubled relations with China.

A strategic partnership does not mean identity of views and exclusivity of relations, particularly given India’s “multi-aligned” foreign policy and Russia’s global activism. The partners need to be sensitive to each other's core political, economic and security concerns. 

Russia is India's principal arms supplier, providing about 70 per cent of its requirements. It supplies sensitive technologies, which India cannot get from anywhere else. Even if India's import diversification and indigenisation proceed apace, its dependence on Russian equipment will continue for decades. 

The erstwhile USSR's vetos in the UN Security Council (UNSC) safeguarded Indian interests in Jammu & Kashmir and the 1971 India-Pakistan war. India may need such political support again until its aspiration of UNSC permanent membership is fulfilled.

There is, therefore, strong strategic, political and economic logic in the Modi government’s thrust to consolidate the relationship with Russia, even as it seeks to strengthen relatively newer strategic links. External relations are not a zero-sum game. 

Views expressed are the author's own.