Top issues in India, Russia relations

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Russian Prime Minister Vladimir Putin arrives in New Delhi on Thursday to reaffirm ties with Moscow's Cold War ally, lining up billions of dollars in mainly defence deals to be signed during the two-day trip.

As India begins to lean more on the United States for a global role, Moscow fears losing not only influence over New Delhi but the bulk of its $100 billion defence market as well.

Here are some of the main issues between the two countries.

Defence

Russia, India's close economic and political partner since Soviet days, is one of the world's major arms exporters. It monopolised India's defence market for decades, providing about 70% of the country's military equipment.

But New Delhi, one of the world's biggest arms importers, has in recent years sought to diversify its arsenal, awarding contracts to US and Israeli firms.

Still, Moscow is not seen leaving India's arms market any time soon, thanks to billions of dollars in maintenance contracts India has to award for the Russian planes, tanks, ships and missile systems that form the bulk of its arsenal.

The two sides are also jointly developing the latest fighter jets and missiles. Putin is expected to sign deals worth more than USD 10 billion, mainly in defence and for nuclear reactors.

Moscow hopes that Putin's visit will also provide a boost for the Russian-made MiG-35 which is up against five other top global firms bidding for an USD 11 billion contract for 126 fighter jets.

Geopolitics

Despite India's growing ties with the United States, Russia remains a trusted ally. For Moscow, New Delhi's expanding role in Asia is vital for its ties with China and Afghanistan.

Russia and India seek a greater role in stabilising the region because both share security interests emanating from violence in Afghanistan. While the Afghan violence is not an immediate problem for Russia, it is wary of religious radicalism -- often funded by a growing narcotics trade -- overhauling Central Asian countries and reaching its borders.

Afghanistan has a more direct effect on India's security given New Delhi's rivalry with U.S. ally Pakistan.

Russia backs India's rise in Asia because it sees Beijing as a threat particularly in the eastern Siberian region, where Chinese migrants are infiltrating into its territory. Russia fears China may try to shift its eastern borders towards Moscow.

Energy and trade

India lacks sufficient domestic energy resources and imports much of its growing requirements, mostly from the Middle East, while looking towards countries such as Russia for overseas exploration and production of crude oil and natural gas.

India's state-run Oil and Natural Gas Corporation has already invested USD 2.7 billion in Russia's Sakhalin oil and gas projects. ONGC has acquired the Russian firm Imperial Energy for about USD 2 billion and is seeking access to more Russian oilfields. India also wants to use Russian influence over some Central Asia countries to secure energy supplies.

In India's nuclear market, valued at USD 150 billion in coming decades, the Russians, along with the French, enjoy an edge over the United States. State-backed Russian firms are building four nuclear reactors in India and are vying for more contracts.

Putin will also try to boost bilateral trade, currently pegged at $8 billion, to USD 20 billion by 2015. India wants Russia to relax strict visa rules to help make inroads into Russia's IT, engineering, tourism and financial services sectors.