Why Russia still matters

ByPrakash Nanda

05 Dec , 2014

http://www.indiandefencereview.com/news/why-russia-still-matters/

Russian President Vladimir Putin is visiting India in the second week of December for what will be the 15th annual summit between the two countries. He is scheduled to address, during his stay at Delhi, a joint session of Parliament, a rare honour reserved for select foreign dignitaries. His visit assumes significance at a time when Russia is no longer fashionable in the Indian discourse on international relations and strategic affairs. Ever since the advent of the Modi government, one has heard a lot about the USA, China and Japan. Modi has talked about converting the “Look East Policy” to “Act East Policy”. But the new Indian Prime Minister has not said anything substantially on Russia, India’s only “all weather friend” over the years.

…in the field of economics, while China, Japan , Australia and the United States are talking of investing scores of billions of dollars in Indian economy, India and Russia have not even able to reach the target of US $ 15 bn bilateral trade.

It may be noted that the annual India-Russia summits are held alternatively in India and Russia, thanks to the declaration of “the India Russia Strategic Partnership”, signed in October 2000. It was the brainchild of none other than Putin, who sincerely tried to restore the traditional warmth and vibrancy to the bilateral relationship that was lost during Yeltsin’s Presidency. Even from India’s viewpoint, there have been some serious issues with Russia. All this, in turn, is probably due to the relative decline of Russian power – falling demographic indicators, excessive dependence on petroleum and military products to revive the economy, and unreasonable often uncompromising Western expansion in the Russian periphery – at a time when a rising India is diversifying its global needs.

That explains why in the field of economics, while China, Japan , Australia and the United States are talking of investing scores of billions of dollars in Indian economy, India and Russia have not even able to reach the target of US $ 15 bn bilateral trade. Official statistics suggest that India-Russia bilateral trade in 2013 stood at US$ 10.01 bn, out of which India’s exports to Russia stood at US$ 3.1 bn (an increase of 1.7% over 2012) and India’s imports amounted to US$ 7 bn (showing decrease of 14% over 2012). Indian investments in Russia are estimated to be US$ 7 bn, bulk of which is in the energy sector, while Russian investments in India are estimated to be of the order of meagre US$ 3 bn, primarily in the telecommunications sector. The main problem in the economic sphere, it seems, is that two countries have not yet come to terms with the new situation where private players and organisations are dominating the economic contours and where they have to deal with each other directly without governmental interventions.

But then, there is now a great scope for improvements on this score. As Russia is under Western sanctions because of its actions against Ukraine, India can raise a demand for its products in the Russian markets. India can easily take advantages by filling the vacuum created by the banned Russian imports from Europe such as fruits, vegetables, milk, and dairy products. Besides, there are now suggestions to replace the dollar and the euro with the rupee and ruble for trade between the two countries. Russia and China, one is told, have already started their mutual trading through ruble and yuan. There is also the other suggestion that India and Russia should conclude a Free Trade Agreement (FTA) in the form of an agreement between India and Eurasian Customs Union of which Russia is a part (along with Kazakhstan & Belarus).

India has invested heavily in Russia’s hydrocarbon sector. One of India’s most significant overseas investments (2.8 billion dollars) has been in Sakhalin – I (Siberia) for extracting oil.

Similarly, India and Russia are in talks to construct what is called the daddy of all pipelines that will transport gas from Russia across the Himalayas via China to India. At a projected cost $30 billion – the world’s most expensive – the pipeline will, when constructed, enable Russia to sell its energy to Asia by lessening its dependence on the Western markets. And, both China and India, among the world’s largest energy consumers, will love to have the Russian energy by reducing their dependence on the highly volatile Middle East. But question remains about the technical feasibility as well as the security of the proposed pipeline, which has to pass through Pakistan, which incidentally, has already mocked at the very idea.

India has invested heavily in Russia’s hydrocarbon sector. One of India’s most significant overseas investments (2.8 billion dollars) has been in Sakhalin – I (Siberia) for extracting oil. But this is not all. India has also invested more in that region through ONGC Videsh Limited – 2.1 billion dollars was the investment for buying a British company called Imperial Energy in the Tomsk region in Siberia. India has been discussing with the Russian side on several more investments where ONGC Videsh Limited is willing to go along with Russian oil and gas majors like Gazprom and Rosneft to invest in different regions of Siberia and even North Russia. In Siberia the regions are Sakhalin-III and there is a region on Timan Pechora, as also there is an interest on the Indian side in the Yamal peninsula, which is a gas-rich area in Northern Russia.

As regards the military cooperation between the two, Russia provides India around 70 percent of its defence needs. And importantly, the defence cooperation is not exactly restricted to a buyer-seller relationship; it includes now joint design, research and development, joint production, training, and service-to-service contacts. Russia is always prepared to share its most sensitive and newest developments in technology to India that the United States and other Western nations have been reticent to do. Brahmos missile system is a shining example of this type of collaboration. Presently, several similar joint development projects in areas of cutting edge and frontier technologies are being pursued, the most important being the joint development of a fifth generation fighter aircraft(FGFA).

Russia is supplying advanced weapon platforms to China in a move that may have implications for India. – Su 35 fighter planes and Amur- 1650 submarines.

However, there have been some distinct irritants in the military sphere, of late. It was an unstated agreement that that Russia would not be providing China (or for that matter Pakistan) the same weapon systems it supplies to India, particularly so with regard to the offensive weapons. But Russia is not limiting itself to this understanding anymore. Russia is supplying advanced weapon platforms to China in a move that may have implications for India. – Su 35 fighter planes and Amur- 1650 submarines. Similarly, last month agreed to supply Mi-35 fighter helicopters to Pakistan.

Of course, Russia has its own grievances against India. After all, India no longer considers Russia to be a great market, given the comparatively poor technology associated with its weapons. Even in military sales, the Russian attitude in going against the signed agreement on Admiral Gorshkov aircraft (India has rechristened it as Vikramaditya) carrier with regard to money and delivery schedule has not been exactly helpful. Besides, India is finding that that Russia is proving to be non-cooperative and nontransparent in developing the FGFA, where India has equally invested US $ 295 million for the preliminary designs. All this explains why India has diversified its defence-markers and how the US has overtaken Russia as the biggest supplier of military equipment to India in the past three years, much to Moscow’s chagrin.

However, despite all the hiccups, Russia, in my considered view, will continue to remain India’s most valued ally for many more years to come. Because as strategic partners, India and Russia share the same global outlook that the existing architecture of global security, including its mechanisms based on international law, does not ensure the equal security of all nations. The fundamental reality is that though Russia may have lost its position as a super power in Cold War equations, it is still a big power if one goes by any possible definition of the elements that constitute power. It is huge and possesses the largest landmass of the earth as a single country. It strategically abuts on Central Asia, China and Iran, an area of political, security and economic interests to India. Russia is endowed with enormous natural resources, technological capacities and trade potential. It still is the most important military power in the world after the United States. Most significantly, Russia, perhaps, gives a higher priority to India in its foreign policy and strategic calculations than the United States or other power centres of the world, their acknowledgment of India’s rising importance notwithstanding.

…it is Russia, which has provided the most vocal support for India becoming a permanent member of the United Nations Security Council.

All told, Russia never hesitates to transfer its most sophisticated technology to India. It is Russia, which gives its nuclear submarines on lease to India. It is Russia, which has unhesitatingly cooperated with India in its march towards becoming a major space power. It is Russia, which has unhesitatingly established nuclear power stations in India, something that cannot be said of the United States even after the conclusion of civilian nuclear deal. And it is Russia, which has provided the most vocal support for India becoming a permanent member of the United Nations Security Council.

Of course, in today’s world nothing is free and Russia has its own reasons to ensure that India remains its close ally as well. Russia, of late, might have increased its ties manifold with China, India’s principal strategic competitor. But then the fact remains that Russia needs India as much as it needs China. Likewise, India might have improved its equations with the United States, of late. But then the fact also remains that India needs Russia as much as it needs the United States.

The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

Prakash Nanda is a journalist and editorial consultant for Indian Defence Review. He is also the author of “Rediscovering Asia: Evolution of India’s Look-East Policy.”