India-Russia Relations

New Momentum for India-Russia Relations?

In late December, Indian Prime Minister Narendra Modi made his first state visit to Russia to take part in the 16th annual bilateral summit. Modi and Russian President Vladimir Putin used the summit to review bilateral ties across a number of areas, including security, trade, commerce, science and technology, defense, and energy. Talking about the relationship, Modi described Russia as “a strong and reliable friend,” while Putinexpressed his happiness about “developing the privileged strategic partnership between India and Russia.”

This rhetoric, along with the signing of sixteen agreements, is being seen as very significant in sustaining and expanding India-Russia ties. One major step taken is a deepening of India’s defense partnership with Russia. On the eve of Modi’s visit to Russia, the Indian government announced the purchase of five S-400 supersonic air defense systems from Russia, costing around $6 billion, while Modi sealed some other important defense deals with Putin in Moscow. For instance, the two sides agreed that the Kamov 226 helicopter would be manufactured in India.

These defense agreements are important for both countries. India’s defense ties with the erstwhile Soviet Union and later with Russia were a major pillar of bilateral ties. However, in recent times there has been deep strain in the relationship. Russian strategists and diplomats have made much over the loss of some Indian defense deals to the U.S., Israel and other countries. On the other hand, Russia’s failure to deliver the aircraft carrier Admiral Gorshkov on time annoyed New Delhi because it forced India to pay Russia $2.34 billion, against the originally agreed price of $947 million. Russia’s decision to supply Pakistan with the Mi-35 Hind attack helicopters and Klimov RDP93 engines for the JF-17 has also alarmed the Indian defense establishment.

This renewed engagement between the two countries will infuse the relationship with some much-needed trust and confidence. In particular, recent defense and other agreements have sent a strong message that New Delhi continues to view relations with Moscow an indispensible element of India’s foreign policy. Second, India and Russia agreed to strengthen the defense partnership in line with the “Make in India” program. So while only the public sector has been involved in defense cooperation between the two countries to date, and the Russian defense establishment has treated India as a market for licensed production, the new initiatives will encourage joint manufacturing of defense products in India and motivate the private sector to play a role in developing a strong defense manufacturing base in India. This will ultimately reduce India’s reliance on defense imports.

It should be emphasized that “Make in India” also aims at having India emerge as an essential player in the global defense market. India is forecast to spend $250 billion over the next decade upgrading its military and Russia wants to seize the opportunity to become a major part of this mission, expressing its readiness to work jointly with India on defense manufacturing. The boost to defense engagement will also help India contain the growing engagement between Russia and Pakistan.

On the economic front, India and Russia decided to institutionalize the CEO’s Forum, which will meet twice a year – once in India and the other in Russia. The two countries also agreed to liberalize business travel. These and other measures should help boost bilateral trade, currently at around $10 billion, to a targeted $30 billion over the next ten years. While earlier this year India’s ONGC Videsh Limited acquired a 15 percent stake in Rosneft’s Vankorneft Field, Indian companies have also shown interest in investing in Russia’s hydrocarbon sector, while there are expectations of an early finalization of new investment proposals between Rosneft and Oil India Limited.

Economic Boost

Russia’s economy is struggling, a result of the economic sanctions imposed on it by the West over its incursions into Ukraine, exacerbated by a sharp decline in oil prices and the costs of Moscow’s military involvement in Syria. The Putin administration sees India – one of the fastest growing economies in the world – as a country that could alleviate Russia’s economic problems. From India’s point of view, its Make in India initiative would welcome Russian companies from the public and private sectors. In fact, Russian firms have shown a willingness to invest in India in construction, major infrastructure projects such as dedicated freight corridors and industrial clusters, smart cities, and engineering services, sharing technologies and skills. At the same time, Indian companies are exploring major investment options in Russia, especially in natural resources such as coal, fertilizers, hydrocarbons, minerals, and rare earth metals.

Counterterrorism is another area where Modi and Putin found a convergence of interest. The two leaders strongly condemned terrorism in all its forms, stressing the need for an effective global effort in dealing with the terrorist menace. They also called for the elimination, once and for all, of all terrorist “safe havens,” presumably referring to Pakistan. India and Russia also share concerns about the aggravation of the security situation in Afghanistan, including along its borders.

While India has in the past implicitly supported Russia on the issue of Syria by not joining the West in criticizing Moscow’s actions there, this time Modi openly shared Russia’s concerns over developments in the stricken country. In fact, the two leaders expressed a common understanding that the civil war in Syria cannot be solved by the use of force, but rather through political and diplomatic initiatives. India’s stance on Syria will certainly help cement its ties with Russia, countering a growing feeling among Russian strategic experts and analysts that India was not coming forward to support Russia in difficult times.

A sharp rise in Russia-China defense ties, the assertive foreign policy of a rising China in the Indo-Pacific, the U.S.-Pakistan relationship, and the China-Pakistan nexus will all encourage India to continue to strengthen ties with Russia. New Delhi also needs Moscow’s support in the former’s bid for a permanent seat on the UN Security Council, and for its participation in other multilateral organizations such as the Shanghai Cooperation Organization.

It is clear that India-Russia relations remain vital for both countries amid a changing regional and global security environment. While Modi’s visit has set in motion the process of strengthening bilateral ties, more will need to be done if the relationship is to play the role both countries clearly expect.