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New momentum

Published : Mar 09, 2007 00:00 IST


Putin with Prime Minister Manmohan Singh at the signing of agreements in New Delhi on January 25.-ALEXANDER ZEMLIANICHENKO/AP

Putin with Prime Minister Manmohan Singh at the signing of agreements in New Delhi on January 25.-ALEXANDER ZEMLIANICHENKO/AP

President Putin's visit to India sees a strengthening of old ties, especially in the areas of defence and nuclear power.

RUSSIAN President Vladimir Putin was the guest of honour at the Republic Day celebrations in the Indian capital this year. The honour bestowed on Putin underlines the importance New Delhi accords to its ties with Moscow. Prime Minister Manmohan Singh broke protocol and personally received the Russian President on his arrival at the airport. The last time the Prime Minister did so was when United States President George W. Bush visited India in 2006. Welcoming Putin, Manmohan Singh described him as "a special friend of India". The Prime Minister said that the visit would "impart a new momentum and carry the strategic relations between the two countries to new heights".

This was Putin's fourth visit to India. It was also probably his last official visit, as his term in office comes to an end early next year. When he first came to India at the end of the last decade, Russia was still recovering from the after-shocks of the collapse of the Soviet Union. Since then, under Putin's leadership, Russia has made a remarkable recovery. In the last two years, Russia has re-emerged as a key player in international politics. Its economy is booming, buoyed by demands for oil and gas. Today, Russia's foreign exchange reserves stand at over $270 billion. Its Oil Stabilisation Fund amounts to more than $150 billion. The money from this Fund will be used to augment and diversify the Russian economy. Russian gross domestic product (GDP) is expected to cross $1 trillion by the end of this year.

Before embarking on his New Delhi visit, Putin sent a strong signal that Moscow should not be taken for granted by its traditional friend. In late December, Russia virtually arm-twisted Belarus into paying the market price for its oil and gas, ending preferential pricing. Until recently, the two countries were very close politically and economically. "Russia has now learnt how to count money," said a top Russian diplomat.

The main focus during his two-day visit to New Delhi was on expanding business and strategic ties between the two countries. The Russian President was accompanied by a 500-strong business delegation. Given the potential of the two economies, the volume of trade between India and Russia is low. During Putin's visit, the two countries reached an agreement to triple bilateral trade from the current $3 billion to $10 billion by 2010. India's trade with Russia currently is only one-tenth of the latter's trade with China. (Bilateral trade between Russia and China stood at $30 billion in 2006.) Russian officials complain that the businessmen they mainly deal with are those involved in exporting tea, cigarettes and buffalo meat - a legacy from the Soviet era. Moscow would like big-name Indian companies engaged in Information Technology (IT) and telecommunications to come to Russia.

Russian Ambassador to India Vyacheslav I. Trubnikov told the media in Delhi that Putin was very satisfied with the outcome of his visit; he described it as the "most productive of Putin's visits so far". Putin assured the Indian side that there would be continuity in Russia's foreign policy towards India after his departure from office.

With the Russian economy poised to grow at a rapid pace, Indian business may give up its reluctance to invest in the country. Companies like Reliance have already started bidding for a stake in Russia's huge hydrocarbon sector. Oil and Natural Gas Corporation (ONGC)-Videsh Ltd. already has a $1 billion stake in Sakhalin-I. Moscow would like ONGC to bid for a stake in the Sakhalin-III oil and gas project. Russian officials say that they are disillusioned with their experience with Western oil majors on the Sakhalin-II project. They have indicated that a 30 per cent stake in the new projects will be earmarked for ONGC. The Indian public sector company has also been invited to bid for a stake in the Vankor oil and gas fields to be developed in Russia's fareast.

Russia has shown a keen interest in acquiring a stake in downstream oil and gas projects in India. It is also interested in investing in the proposed gas pipeline from Iran to India, via Pakistan. Petroleum Minister Murli Deora stated during a recent visit to Moscow that Russian oil would account for 50 million tonnes of the 200 million tonnes to be imported by India by 2015.

Russia has been quick to realise the potential benefits of enhancing civilian nuclear ties with India, in the wake of the "nuclear deal" between New Delhi and Washington. Russia has always been supportive of India's nuclear aspirations but had pleaded its inability to help owing to the international sanctions in force. Now with Washington determined to get the Nuclear Suppliers Group (NSG) to lift the sanctions on civilian nuclear cooperation with India, Moscow wants to be the first past the post in signing new agreements with India relating to nuclear cooperation. Influential NSG members like France and Germany would also demand a stake in exchange for diplomatic support when India starts signing deals for the construction of new civilian nuclear plants.

The highlight of Putin's visit was the agreement between the two countries on the construction of new nuclear power plants in India. Four additional Russian civilian nuclear reactors will be sent to the Koodankulam plant. Moscow has already built two units of 1,000 MW each at Koodankulam in Tamil Nadu. Russian officials have been saying for some time now that they welcome the India-U.S. nuclear deal, observing that there is scope for many countries to get a piece of the action when lucrative contracts for the construction of civilian nuclear plants are given out by the Indian government.

Last year Russia supplied uranium to the Tarapur plant, invoking a special clause in the NSG. Russia did so despite strong objections from the U.S. All that the Russians are now demanding is a level playing field when the Indian government signs new defence and nuclear deals. Russia is the world's second largest supplier of nuclear fuel and a leading exporter of nuclear power technology. Russia has not put any additional conditions for civilian nuclear cooperation with India. New Delhi has agreed to keep the nuclear facilities and the fuel it imports from Russia under International Atomic Energy Agency (IAEA) safeguards. The Russian Ambassador said that plans were at an advanced stage for the construction of four new civilian nuclear power projects in India. A joint statement on the promotion of the peaceful use of nuclear energy was also signed during the Russian President's visit.

In the bilateral talks, both sides stressed the importance of multi-polarity in world affairs. "The Strategic Partnership of Friendship and Peace" signed by the two countries six years ago stressed the need to build a multi-polar world based on equality. The two leaders also discussed important matters relating to energy security and the situation in West Asia. "Energy security is the most important of the emerging dimensions of our strategic partnership. Russia's position as a global leader on energy issues is widely recognised," Manmohan Singh stated during the visit. Russia is the world's largest producer of gas and the second biggest exporter of oil.

Both Moscow and New Delhi are known to be opposed to Washington's game plan for the Islamic Republic of Iran. Russia, along with China, has made it clear in the United Nations Security Council and other fora that it is opposed to any form of military action against Iran. The joint statement issued by Putin and Manmohan Singh stated that both countries were "convinced" that an "effective solution to the Iran nuclear issue would best be found through political and diplomatic efforts". It expressed concern about the "deteriorating situation" in Iraq and called for "collective international efforts" to restore normality in the country. The statement also called for the expansion of India-Russia-China trilateral cooperation. Enhanced cooperation between the three important countries, the statement said, would strengthen peace and stability in Asia and the rest of the world. According to Trubnikov, the India-China-Russia triangle is "gaining strength and will soon have more economic and political substance".

The Foreign Ministers of the three countries met in the second week of February. During the meeting, the three sides discussed important issues, including Iran.

Interestingly, the Chinese anti-satellite missile (ASAT) test took place just before Putin's India visit. The Indian establishment, if statements by senior officials are any indication, seems to be unhappy with the successful Chinese missile test in outer space. The Russian President, when asked by the media to comment on the issue, pointed out that China was not the first country to carry out such a test. He said that the first test was carried out in the early 1980s. It was the Americans who started military activity in space. However, Putin added, the "genie" should not be brought out of the bottle. Both Washington and Moscow have been observing a moratorium on testing since the 1980s. But President Putin said in New Delhi that "military circles in the United States were talking about weaponisation of outer space".

Indo-Russian relations have traditionally been based on a convergence of interests. Close military collaboration between the two countries started in the early 1960s, culminating in the Indo-Soviet Treaty of Peace, Friendship and Cooperation in 1971. That treaty was crucial to India's success in the 1971 war with Pakistan, which led to the birth of Bangladesh. The supply of advanced Russian military equipment to the Indian armed forces began in the 1960s. Even today, despite the dramatic changes in Indian foreign policy after the end of the Cold War, most of the defence equipment with India is either of Russian origin or is manufactured under licence or in collaboration with Russia. India, along with China, accounts for most of Russia's arms sales. Russia sells around $6 billion worth of armaments annually.

The manufacture of the BrahMos supersonic cruise missile is an example. The $300 million joint venture has already been deemed a success. However, the Russian side does not seem too keen at this juncture to market the missile jointly in the global arms bazaar.

Defence Minister A.K. Antony said that a proposal to buy 300 T-90 Russian tanks as well as fighter planes and helicopters was discussed during the visit of Russian Defence Minister Sergei Ivanov to New Delhi in the last week of January. Ivanov has since been promoted and no longer holds the Defence portfolio. He is considered to be among the front-runners to succeed Putin.

Ivanov offered the advanced MiG-35 fighter planes for the Indian Air Force (IAF). He said that the MiG-35 would compete with French and American planes when the IAF selects 126 multi-role fighter aircraft to augment its fleet in the near future. According to Trubnikov, the choice has narrowed down to the MiG-35 and the American F-18. The MiG-35 is a more advanced version of the MiG-29. According to Russian officials, the plane was very popular with IAF pilots when it made its debut at the Bangalore air show in February as they were used to flying MiG-29s. Ivanov told the media in Delhi that the Indian government had indicated its "final choice" on the joint production of a fifth-generation aircraft that would eventually replace the Su-30s - the frontline fighter aircraft of the IAF.

During the Russian Defence Minister's visit, the two sides signed a protocol for the joint production and development of a multi-role transport aircraft. The Russian Ambassador said that his country was "preparing to supply" 347 additional T-90 tanks to the Indian Army. The MiG-29K, specially designed for the aircraft carrier Admiral Gorshkov, acquired by the Indian Navy, has already started flying.

Two agreements that would give India access to the Russian Global Navigation Satellite System (GLONASS) were signed during Putin's visit. The Indian Space Research Organisation (ISRO) and the Russian Federal Space Agency initialled an agreement for jointly launching satellites. GLONASS, according to Russian officials, will have important military uses. The Russian side will share its military frequency with the Indian side.

As the outcome of the Putin visit indicates, Indo-Russian "strategic relations", at least for the time being, will continue to be mainly defence-oriented.

(This story was published in the print edition of Frontline magazine dated Mar 09, 2007.)



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