India and Russia – Two decades of Strategic Dialogue and Partnership

In the middle of 1999, Vladimir Putin, the then Director of the Federal Security Service (FSB) was appointed the Prime Minister by the ailing and drinking Boris Yeltsin- maverick of the Russian history. Within six months, before the year ended, Putin took the reins as the President of the uncertain Russian Federation. Russians put a great faith in him to bring back their lost pride and prosperity.

Russians have suffered a great deal but have a proud history and are a people who despite the odds and adversity remained resolute in their loyalty to the fatherland especially in the wake of the sufferings during the sunset of the Soviet Union. Putin the strong man was the beacon of hope for them. Fortunately, I happened to be posted to Moscow during that period and witnessed the unfolding of a history not only for the Russians but also for the India-Russia relations. Bilateral relations had taken a toll since both were vainly trying their luck with the west and eventually got disenchanted. Putin had his mind and resolve to not only retrieve the pride of the Russians but also to take the India-Russia camaraderie to a new and strategic level and possibly was singularly responsible for catapulting it to a higher orbit. He meant business.

When late AB Vajpayee was the Prime Minister the two sides agreed to have Annual Summits alternately in Moscow and Delhi. All the other mechanisms were galvanized to feed their result oriented outcomes into the Summit so that the leaders could take stock of the situation and give directions to implement decisions for the desired course of action. The special and privileged strategic partnership enriched further in the critical areas of Security - Defence, Space, Nuclear Energy, Hydrocarbons & Energy security. It was then that for the first time Indian ONGC Videsh Limited (OVL) was able to secure 20 percent of the stakes in one of the biggest Sakhalin oil blocs of Rosneft. Since then for almost a decade and a half, India tried to repeat this feat but success eluded until 2017 when once again Indian private sector ESSAR was able to work in the hydrocarbons sector as Russian economy began to face the effects of western sanctions. Russian forays into the nuclear energy sector in India also began to expand during this period.

Even though India and Russia have become complementary and natural partners the normal trade and investments between the two countries have remained far below potential. It has once again become the focus of the recent visit of PM Modi for the 20th Annual Summit and 5th Far Eastern Economic Forum (EEF). Putin invited Modi as the Chief Guest (September 4-5) to Vladivostok, where India was the first country to open a Consulate. While strategic cooperation in defence and security including space and nuclear areas remain the bedrock of the bilateral relations the real effort has been made to match it in the economic domain. The longish Joint Statement issued and the optics between the two leaders who during this year met four times and often talk on phone underscores the sincerity of purpose and intent. This time the salience and the intensity appears more determined in so far as economic and trade cooperation is concerned. In the matrix of South-North cooperation, PM Modi announced first ever Line of Credit of US $1 bn for a developed country ,which is region specific in accordance with his new coinage ‘Act Far East’ policy. This is a facilitating carrot and mechanism for the investors and projects including in the Small and Medium Enterprises (SME) sector.

The region has acquired much greater salience in the context of Arctic explorations and new trade and energy routes hence shipping lanes from Chennai to Vladivostok are being explored. In the early 1990s the enthusiastic Indian diamond merchants like Rajesh Gandhi of Choron Diamonds had reached Yakutia (one of the coldest regions) with his Gujarati polishers to hone the Russian diamonds in his Joint venture. So did the Indian pharma companies. Indian film producers from the South explored the beautiful locations of the Far East and could get a boost with this resolve and direction by the Indian Prime Minister. On his part, President Putin wants Indians to take a lead in exploring business opportunities for trade and investments as the regime framework for the investors is being liberalised. E-visa system was introduced some time back that would facilitate tourism from India. Given its declining population and the Chinese influx, Russians might want some semblance of diversity and balance. Hence the Indian work force, especially skilled ones that has already made its mark from the Middle East to Africa to the western countries and is sought after, has been welcomed into the Far-East.

A large Business delegation attended the EEF. Earlier Commerce & Industry Minister Piyush Goyal with four States’ Chief Ministers had led a delegation of 140 businessmen and industrialists. Hopefully, they would find the extreme weather hospitable too as some of our compatriots have done for decades. Indications are right since 50 business-to-business (B2B) MoUs and agreements worth $ 5 bn were signed at the EEF apart from 15 government-to-government (G2G) pacts. A trade target of US $30 bn (from current $11 bn) has been set for 2025 . One of the key outcomes was the roadmap for energy cooperation as mentioned by the Foreign Secretary Vijay Gokhale, “We had a major breakthrough in the energy sector. This is a sector from where we are looking to diversify our sources of supply and we are increasingly finding it attractive to buy oil and gas from the Russian Federation. But one of the important outcomes of the visit of the minister of Petroleum and Natural gas last week was that we agreed on a road-map of cooperation in the next five years in which we will concretely work on investments both ways. Indian investment in Russian fields, in exploration and exploitation, in transportation of energy to India as well as Russian investments in India in the downstream sectors. We are looking at investing in additional oil fields in Russia in what is called the eastern cluster. We are also looking at sourcing energy and in this regard President Putin has also acknowledged that there is a need for us to look at how they can supply Russian energy to India in a safe, secure and in a way in which costs are maintained.”

This is extremely important in the context of on-going Persian Gulf Crisis. However, it will need the grit of the businesses on the two sides and the sincere resolve of both the governments right down to the operative levels to productively harness the opportunities to a mutual advantage. The past is not a great example looking at the Super CEOs Round Table or so called Business Councils where even Chairs can’t find time to attend the meetings especially when the top leaders are not there. Similarly for government driven approaches and announcements, especially in the Public-Private Partnership (PPP), matrix it is important that the official representations of the two countries get into a mission mode to explain and advertise the real opportunities among the businesses across various regional clusters and how to go about it. One has seen the conferences and visits for far too long to produce the desirable results but definitely this time it should be doable with ‘Modi-Putin Combine’ at the helm of affairs and all the right mix of ingredients present on the ground.

Politically the relations probably are at their best as President Putin has met his match in Prime Minister Modi who takes decisions with clarity of purpose that was clearly evident in India going ahead with S-400 purchases and other deals despite US objections and sanctions and Russia articulating its clear support to India on the abrogation of Art 370 as “India’s internal matter”. Russia has been concerned with the increasing purchases of the US defence equipment and diversification by India but that is the name of the game. Relations with the US have enriched and diversified at great pace. But both US and Russia need to understand that as long as we have to contend with treacherous terrorism driven Pakistan and an adversarial China, India’s defence pie will keep on expanding.

To quote from a different context, ironically, Xi Jin Ping speaking of South Asia as, “there will be place for both of them – Russia and America”. Both have flirted with the Americans but like Trump’s America First Policy, India and Russia have to cater to their national interests too. Of course one cannot forget the ‘Dragon’ in the room that is all pervasive, and the deeper engagement with Pakistan by Russia in strategic sectors, even if under the garb of Afghanistan, remain the points of concern. However, the epithets of “Brath ( Brother) - Bhai” or “Biryoza (Birch) and the Banyan” (title of an authentic compendium on Indo-Russian relations by Vladimir Skosyerev published in 2002 and updated a decade later) used to display the inherent strength of the relationship must be calibrated to real-politic so as to avoid emotional hiccups since transactional relationships and diversification of partnerships have become the norm in the international discourse.

As long as there is “increasing trust” as mentioned by PM Modi in Vladivostok, Indo-Russia ties are bound to swing higher, rightly described as a Special and Privileged Strategic Partnership. The third decade of closer collaboration begins in the backdrop of great power game, especially in the context of Indo-Pacific where India is poised to play a bigger role.

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>