Home » Business & Economy » BRICS the ideal platform to repair Indo-Russia relationship, counter China

BRICS the ideal platform to repair Indo-Russia relationship, counter China

Neeraj Thakur | Updated on: 10 February 2017, 1:46 IST

India announced on Saturday that it will buy the S-400 Triumf air defence system from Russia, worth over $5 billion, procure and collaborate in making naval frigates, and set up a joint production facility for making Kamov helicopters.

Also read-India-Russia's multi-billion dollar deal on S-400 air defence missile systems: All you need to know

The announcement of the deal saw Indian Prime Minister Narendra Modi say: "An old friend is better than two new friends."

The statement is significant in the backdrop of Russia's recently-developed tilt towards China and Pakistan in matters of geopolitics.

In the Cold War era, despite India being at the forefront of the Non-Aligned Movement, the erstwhile USSR always supported it. When the world was divided into two major blocs and the US was openly against India, Soviet armies were always ready to guard Indian interests.

However, post-liberalisation in the 1990s, India has steadily moved towards the US by increasing its trade with US firms. This has resulted in a marked shift in old equations.

The India-China equation

India has received accolades from institutions like the World Bank and the International Monetary Fund for achieving a growth rate of above 7%, ahead of China in 2015-16. The Indian economy holds the promise of beating the Dragon in terms of growth even in the current year. But India, under Modi's leadership, is not in a position to directly take on China at any political or economic forum.

Of late, China has single-handedly managed to prevent India's entry into the Nuclear Suppliers' Group (NSG), and ensure that the United Nations does not recognize Jaish-e-Mohammad chief Maulana Masood Azhar as a terrorist, which could have curbed the latter's ability to raise funds from international channels.

To be able to raise a voice against China at international forums, India needs to be able to match the economic mettle of the Communist nation. China's GDP is 5.06 times more than India's at nominal rate. In terms of Purchasing Power Parity, China's GDP is 2.39 times that of India's.

The trade between India and China at $70.73 billion, with India facing a trade deficit of $52.68 billion. This heavy trade deficit requires India to play nice and withstand China's bullying, even when China has been trying to show its might by expanding its rights and domain of operations in the world.

But, if the little boy manages to project its economy as the golden goose of the future for all the big nations in the world, it would be able to force the bully to treat India and its interests with respect - after all, nobody wants to kill the golden goose.

This strategy worked well for China in the 1990s and 2000s, when it was pitched against the US. Today, most experts believe that China is on the verge of taking over from the US as the primary global superpower.

Repair the old relationship

For India to benefit from this strategy, it must ensure that while the trade route between its economy and the rest of the world is open for all, a preference is given to only those who are ready to stand by it in times of need.

Currently, only Russia - for its geopolitical interests - seems to be in a position to support India in realising its goal of safeguarding its borders as well as its economy against regional and global headwinds.

In this context, Modi seems to have realised that to counter the Chinese juggernaut, a regional behemoth like Russia must be on its side.

Of late, Russia has moved closer to China and Pakistan, while India has moved towards the US. But the latter has failed to uphold India's interests in the face of opposition from China.

This is why, on day one of the BRICS summit in Goa, Prime Minister Modi and Russian President Vladimir Putin held delegation-level talks, and signed a total of 16 agreements, mostly in the fields of defence, energy, power, shipbuilding and space.

No economy becomes number one without having access to original technology of products. Russia is perhaps the only country which can agree to the joint development of defence as well as other products to be consumed by India.

Therefore, it is important that India uses BRICS to sort its differences with Russia, which, in turn, will help it deal with the hostile China.

Modi seems to be on the right track; he needs to ensure he plays smart while dealing with different BRICS nations.

Edited by Shreyas Sharma

More in Catch

Yes, there's a dip in Indo-Russia relations. But it's not much to worry about

Goa summit: India-Russia relationship is about to get a shot in the arm

Read full text of PM Narendra Modi-Vladimir Putin's India-Russia joint statement meeting here

First published: 15 October 2016, 7:02 IST
Neeraj Thakur @neerajthakur2

As a financial journalist, his interface with the two dominant 'isms'- Marxism and Capitalism- has made him realise that an ideal economic order of the world would lie somewhere between the two.

Senior Assistant Editor at Catch, Neeraj writes on everything related to business and the economy.

He has been associated with Businessworld, DNA and Business Standard in the past.

When not thinking about stories, he is busy playing with his pet dog, watching old Hindi movies or searching through the Vividh Bharti station on his Philips radio transistor.