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Modi is in Russia. Here's what he can look at

Prabhat P Shukla | Updated on: 14 February 2017, 2:25 IST

The visit

  • The two countries have a long history of partnership
  • But of late India and Russia have been less relevant to each other

Game plan

  • Russia faces several economic problems now
  • India should focus on how to deepen economic ties with Russia
  • The two countries should also sharpen their political partnership

More in the story

  • What are the areas in economy where India and Russia can cooperate
  • How India can benefit from Russia in defence and energy sectors
  • Where the two countries can make a difference geopolitically

It is the standard fare of Indo-Russian engagement to describe relations as time-tested and based on trust. This certainly was true, and is still largely true.

However, a candid assessment must recognise equally that there has been a certain stagnation in recent years. And that there are challenges that need to be taken care of in order to set the relationship on a steadier course for the future.

Read: Modi to embark on 2-day Russia visit

The starting point is the need for a more substantive dialogue at the summit and other levels. In recent years, the summit-level talks have skirted difficult issues and focussed more on transactional ones or stuck to safe platitudes, even in confidential conversations.

To understand where the relationship is, a brief look at current Russian preoccupations would be in order.

Russia's woes

President Vladimir Putin's annual marathon press-conference led off with questions about the economy. In turn, he answered these in great detail, and the picture that emerged was not encouraging:

  • gross domestic product of the country will drop 3.7% this year
  • inflation is at over 12%
  • the Rouble has fallen

However, the worst seems to be coming to an end. Both industrial and agricultural production were beginning to rise by the third quarter, though at a slow rate.

The big problem facing Russia is the fall in oil and gas prices. This has hit its budget. Even for the next year, the country has budgeted Urals crude at $50 a barrel, whereas it is currently selling at $38.

Just as China has been squeezed out of the new integration under the Trans-Pacific Partnership, Russia is being excluded by the Trans-Atlantic Trade & Investment Partnership. And Putin is painfully conscious of it being a longer-term drag on Russian economic prospects.

The big problem facing Russia is the fall in oil and gas prices. This has hit its budget.

Other Russian concerns are related to the on-going stand-off with the United States - The expansion of the North Atlantic Treaty Organisation topping the list. This was mentioned by Putin in his address to the United Nations General Assembly in September.

There are the troubles in Ukraine and Syria, where again Russia finds itself pitted against the West in general, and the US in particular.

What India can do

These primary concerns of Russia show how India is growing less and less relevant for Russian interests. The same is true for India: Russia is becoming less relevant to Indian concerns - the economy, security, and regional challenges, especially terrorism.

Fortunately, there are better ways of dealing with this entire package, so as to reach greater understanding.

Also read: Russia is India's tried and tested real friend, says Sushma Swaraj

The starting point has to be deepening the economic engagement. Despite years of effort to scale up trade and investment between the two countries, there is little to show in concrete terms. There are structural hurdles, no doubt, and the Russian system is hard to deal with - but the returns are worth the effort.

As the saying goes - it's an ill wind that blows no good: the western sanctions, and the Russian restrictions on imports from Turkey, open additional possibilities for Indian goods. Food products, pharmaceuticals and textiles are obvious sectors to look at.

The Russians are keen to move away from reliance on the US dollar for trade, and this idea figures in the last Summit Joint statement. However, this idea is not worth supporting although there could be some flexibility shown on other Russian concerns, like bloc politics.

Energy is another obvious area of promise. However, little progress has been made because some of the grandiose schemes - a pipeline from Russia to India - are non-starters. The right approach would be to focus on nuclear energy, where the Russians have few concerns over our liability laws. Two reactors have already been built; there is room for four more at the same site.

The other promising area for energy cooperation is liquified natural gas. Some of the Arab suppliers in the Persian Gulf send significant amounts to East Asia, and we would like to import large amounts from Russia.

Years of effort to scale up trade and investment have yielded little concrete results

It would make sense to arrange a four-way swap, so that the Gulf shipments come to India, and the Russians direct their supplies to East Asia, thereby saving delivery time and transport costs. Perhaps South Korea would be a good partner-country in East Asia to begin this arrangement with.

It has serious potential to boost trade, besides meeting our requirements of a clean fuel. It could also help defuse geo-political tensions in West Asia.

The importance of the defence sector was underlined by Prime Minister Narendra Modi himself at the last Summit, when he publicly declared that Russia would remain India's most important partner in the future.

Of course, over the past year, it was the US that was our largest defence partner, but it is true that Russia is at a qualitatively different level - for now.

Unfortunately, problems persist in acquisitions from Russia in terms of quality, cost and serviceability. Not all the fault lie with the Russian side, but it is largely to blame. Arms sales to Pakistan are ill-advised and our position on these should be stated unambiguously.

The geopolitics

It has been clear since the advent of the NDA government that both countries are seeking to raise the level of the relations - something that will go beyond the change of adjectives to describe the strategic partnership.

One of the major changes in the 2014 Joint Statement was their criticising the terrorism in "Jammu and Kashmir, India, and Chechnya, Russia". This is just the kind of fundamental understanding that both countries need to build on. No other permanent member of the UN Security Council would agree to such a formulation.

Hopefully the coming Summit will find ways to reaffirm this mutual commitment.

From here to the regional, the main issue is the fate of Afghanistan and Central Asia. While there is not conflict of interest between India and Russia, the reality is that there is no real understanding, much less common action, between the two.

For now, the US and China seem to be making the diplomatic running - and their aim is to bring about some accommodation between the government in Kabul and the Taliban. Fortunately, the latter are disintegrating.

Arms sales to Pakistan are ill-advised and India's position should be stated unambiguously

But it would be important for India and Russia to talk seriously, rather than in bland generality, as hitherto, to see what comes next. Both countries could, for a start, step up military supplies to the government in Kabul. Some supplies have begun, but more needs to be done. The rise of Islamic State in Afghanistan should add spur to these joint efforts.

At the global level, there are some interesting new ideas worth exploring. Putin has proposed convening a special forum under the UN for a comprehensive consideration of issues related to the depletion of natural resources, destruction of habitat and climate change.

These are issues that matter a great deal to India because the Conference of Parties meetings so far have concentrated on energy generation and carbon sinks mainly. But these matters are also very important for India, particularly the underlying cause of all this - too rapid population growth.

It would also be good to leverage the India-Russia-China dialogue to deal with some of the civilisational issues where the three have similar concerns vis-a-vis the West, such as the biased application of human rights, national sovereignty and civil society issues.

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First published: 23 December 2015, 15:43 IST
Prabhat P Shukla

Distinguished Fellow, Vivekananda International Foundation; former Ambassador to Russia.