In a bid to defuse the standoff in Ukraine, US Assistant Secretary of State for European and Eurasian Affairs, Victoria Nuland and Russian Deputy Foreign Minister Grigory Karasin spoke over the phone in the third week of July thus ending the impasse. The timing and substance of this bilateral conversation reaffirms that Russia and the United States are the key players in this conflict and who alone can hammer out a solution in Ukraine. The crisis in Ukraine and the future of Ukrainian security and stability continue to remain Europe’s most formidable challenge. The Ukrainian conflict has exacerbated tensions between Russia and the West, particularly the United States, putting stress on the cooperative phase of their relations. The situation today is reminiscent of the Cold War days and the “Ukraine crisis has re kindled a rivalry between the US and Russia that’s quite comparable to the 19th century’s Great Game.”¹

It is a conflict between two geopolitical realities: “If Ukraine supports Moscow, Russia becomes a regional power on the rise. If Ukraine supports the west, Russia becomes vulnerable from without and from within.”² It is therefore significant that the two main players, the United States and Russia have decided to start regular bilateral talks in a bid to defuse tensions. This is a positive move that builds upon the earlier diplomatic efforts by the European Union, particularly Germany and France, in February that led to the Minsk-II Agreement.

While a tenuous peace holds in Ukraine after the adoption of the second ceasefire agreement, the Minsk II agreement of February 15, 2015, tensions have remained high in this region and stability in Ukraine remains elusive as Eastern Ukraine continues to face the threat of Russian military intervention. Fighting broke out here as recently as June 2015 when Russia-backed separatists pushed westward toward Maryinka and Mariupol leading to a warning by Ukraine’s President Petro Poroshenko to his army to be prepared for the possibility of a “full-scale invasion” by Russia along the entire length of Ukraine’s border. This coincided with Putin’s visit to a “military-patriotic recreation park” near Moscow, where he made a speech announcing the addition of 40 new intercontinental ballistic missiles to Russia’s military inventory in 2015.

The West sees Putin’s ‘revisionist agenda’ and growing Russian assertiveness as a serious threat to any lasting peace in the region. Putin on the other hand would like to draw attention to the US led NATO expansion and to understand what he did in Ukraine, one must go back to the EU Athens Conference of April 2003, which according to him has led to the current security stalemate. At the Athens Conference the West decided that besides Malta and Cyprus, the three former Soviet Baltic states – Estonia, Latvia and Lithuania, and four former Warsaw Pact countries – Hungary, Poland, the Czech Republic and Slovakia, would all join both the EU and become NATO members in 2004. To Russia this was nothing but a US led move to serve its own geo-political interests and in complete violation of a promise made to Mikhail Gorbachev in October 1990 at the time of the German Unification that NATO would not expand “even an inch eastwards.” The trigger for taking back Crimea by Russia seems to be the result of attempts by NATO since February 2012 to install a Ballistic Missile Defence System in those NATO countries that border Russia thereby encircling Moscow. The Baltic States, however, feel that NATO has so far failed to provide them with a clear deterrent capability.

Though the West was caught unawares by Russian action in Crimea, it nonetheless feels that it holds all the cards and if they are able to continue with the imposition of sanctions and maintain their unity, Putin will come under both domestic and international pressure and be forced to give up his revisionist agenda. But this has not happened as Putin has adopted a more competitive stance against the West. According to Carnegie expert, Andrew S Weiss, “Putin has also been signaling for some time now that he sees reestablishing Russian influence over the political and economic development of neighboring countries via the establishment of a Eurasian Union as the centerpiece of his third term in office.”³ Russian assertiveness and a heightened sense of empowerment need to be handled carefully especially as China and Russia become more politically aligned. This has larger global implications and something that India too needs to watch.

Last year Russia and China signed a major 30-year energy deal worth $ 400 billion for the delivery of Russian oil and gas to China. The payments will be in local currencies not in dollars and both have started working towards this as in 2014 there was a nine-fold increase in bilateral trade in their respective national currencies between China and Russia over 2013. This indicates that Russia and China are carefully planning a long-term strategy of getting out of a cycle of dependency on the US currency, something that, as the US sanctions last year revealed make both countries vulnerable to the vagaries of US policy and currency.⁴

China has also agreed with Russia to unify the new Silk Road high-speed rail project with Eurasian Economic Union. At the same time Beijing has announced it is creating a huge $16 billion fund to develop gold mines along the rail route linking Russia and China and Central Asia. This suggests that there are plans to build up gold reserves as central bank reserve share.⁵ Home to some of the world's largest natural gas and coal reserves, Central Asia has emerged as an important arena of both cooperation and power play between Russia and China.

While traditionally Central Asia deferred to Russian authority due to the region’s inclusion in the Soviet Union, China has emerged as a new patron in recent years through new trade relations and investments. Kazakhstan and Turkmenistan are important players in Beijing's 'New Silk Road' project, an ambitious Chinese attempt to expand its presence and infrastructure across three continents. Russia is not comfortable with such developments and Moscow has ramped up efforts to secure its position as the region's leading strategic player. Russia has made concerted efforts to increase its military and security presence in the region and has been working with its allies to strengthen the Collective Security Treaty Organization while also strengthening its own engagement with China in the SCO. In December 2014 President Putin signed the Federal law to ratify an earlier agreement of June 2009 for establishing a secret command system for the CSTO’s collective security forces. The CSTO is also establishing a cyber warfare command to protect the alliance from potential cyber attacks. Simultaneously, Russia is also strengthening its own military infrastructure in the CSTO countries to protect them from attacks by NATO.⁶

In January, President Vladimir Putin formally launched the Eurasian Economic Union, comprising of Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.⁷ While Russia still possesses substantial hard power, in terms of economic clout, Beijing is widely perceived as having the upper hand due to the impact of Western sanctions and Russia's protracted recession. With China increasingly financing more Russian projects and companies due to Moscow's deteriorating economy, the bilateral relation balance seems to be tilting more towards Beijing.

The strengthening Russia-China relationship, including the increased flow of Russian defence supplies to China, in response to western pressures on Russia has implications for Indian interests. The growing entente between Russia and China is also a factor in Russian overtures to Pakistan, as both countries have been responsive to each other’s interests and sensitivities as a result. Russian policies towards Afghanistan may also undergo evolution not entirely aligned to Indian interest following China’s direct involvement now in the reconciliation process and the centrality of Pakistan, not only in this, but the Chinese ‘One Belt One Road’ project of which the CPEC is a part and which would link Central Asia more closely with Afghanistan and Pakistan. Pakistan’s membership of the SCO along with India may encourage Russia to act as a broker between India and Pakistan in the context of geopolitical changes occurring in the region following China’s Eurasian strategy. This requires a profound and frank dialogue with Russia. We have to make sure our longer term interests are not compromised beyond a point because of these developments. Beyond that, to preserve our strategic autonomy and for a better balance in our international ties, we need to conserve our relationship with Russia that has been cemented by mutual confidence over decades.

Indications are that Russia would like to balance its growing dependence on China in the future by developing closer relationships with other Asian countries. Since the most natural partners – Japan and South Korea – are US treaty allies, Russia will have to explore alternatives to reach out to Asia and here India is well-placed to facilitate a dialogue between Putin with other East Asian countries.

Similarly, “the West should begin positioning itself to enter into negotiations with Moscow over a new security arrangement for Europe, including conventional and nuclear force postures that minimizes the risks of new proxy wars on Russia’s periphery and a direct military conflict between NATO and Russia.”⁸ Here again, India is well positioned to play an active and positive role as we have good relations with multiple players. While we upgraded the strategic partnership with Russia into a special and privileged one, we also entered into special and global partnerships with others, including a formal Declaration of Friendship with the US at a time when the West is attempting to isolate Russia internationally. Indian foreign policy is capable of tackling such challenges and take steps that are necessary to safeguard its core interests.

End Notes:

1. Dmitri Trenin, The Ukraine Crisis and the Resumption of Great-Power Rivalry, available at
   http://carnegieendowment.org/files/ukraine_great_power_rivalry2014.pdf
2. U.S. , Russia: The Case for Bilateral Talks, Geopolitical Diary, available at,
   https://www.stratfor.com/geopolitical-diary/us-russia-case-bilateral-talks
3. Available at http://carnegieendowment.org/2014/03/27/what-are-global-implications-of-ukraine-crisis
4. For more details see F William Engdahl, Russia Gets Very Serious on De-dollarizing, New Eastern
   Outlook, 6 June 2015.
5. Ibid.
6. For more details see, http://www.themoscowtimes.com/business/article/with-ukraine-revitalizing-nato-russia-dusts-off-its-own-security-alliance/509986.html and Pavel Baev, The CSTO: Military Dimensions of the Russian Reintegration Effort, available at, http://www.silkroadstudies.org/resources/pdf/publications/4-1409GrandStrategy-Baev.pdf http://www.silkroadstudies.org/resources/pdf/publications/4-1409GrandStrategy-Baev.pdf
7. Nyshka Chandran, Central Asia’s Battleground: Who’s winning? Available at http://www.cnbc.com/2015/06/14/russia-or-china-whos-winning.html
8. Edward W Walker, A Strategic response to Russia’s Role in the Ukraine Crisis, May 6, 2015, available at,
   http://eurasiangeopolitics.com/2015/05/06/a-strategic-response-to-russias-role-in-the-ukraine-crisis/