Prime Minister Narendra Modi is visiting Vladivostok on September 4 and 5 as the chief guest of the 5th Annual Eastern Economic Forum (EEF). He will also participate in the 20th India-Russia bilateral summit. Recent visits by External Affairs Minister S Jaishankar and National Security Adviser Ajit Doval to Moscow have prepared the ground for Modi’s visit. After meeting G7 leaders, this will be another important meet for Modi following the abrogation of Article 370 in Jammu and Kashmir.
On Kashmir, Moscow has consistently supported New Delhi unconditionally over time or regime change. It has also opposed its internationalisation. Despite India’s increasing closeness to Washington; China-Russia bonhomie; and an improvement in Russia-Pakistan ties, Russia has again thrown its weight behind India on Kashmir. It has articulated that the abrogation of Article 370 is a sovereign decision of the Indian government and this is ‘an internal affair of India’.
So far the main pillars of India-Russia relationship are strategic congruence, defence ties, nuclear power and hydrocarbons. Under strategic partnership, since 2000 and upgraded ‘special and privileged strategic partnership’ in 2010, more than 215 agreements have been signed in military and technical cooperation, space, nuclear energy, hydrocarbons, trade and economics, education and culture. During his interaction at the Valdai Club in Moscow, Jaishankar asserted that the world has changed, India and Russia have changed but India-Russia relations have remained ‘a stable factor in international life’.
The crux of the last 19 bilateral summits and accompanying declarations and agreements has been common positions on major global issues including international terrorism and Afghanistan; the desire for a multi-polar world and the improvement in bilateral relations. Both have also tried to coordinate their activities at the United Nations, G-20, BRICS, the Shanghai Cooperation Organisation (SCO) and RIC (Russia-India-China).
India continues to be an important arms market for Russia. According to SIPRI arms transfer database between 1992 and 2018, India bought weapons worth $40 billion from Russia. This is about 70 per cent of total Indian arms imports and about 29 per cent of total Russian arms exports to the world during this period. Due to Indian diversification, this ratio has come down to about 60 per cent in the last six years. With many new deals, including the S-400 surface-to-air missile systems, frigates, Kamov helicopters, Russia may bounce back to its earlier position.
India’s public sector oil companies have already invested more than $10 billion in Russian assets, including Sakhalin-1, Imperial Energy, Vankorneft and Taas Yuryakh. As for Russia, a consortium led by Rosneft acquired Essar Oil for $13 billion in 2017. Meanwhile, Minister of Petroleum & Natural Gas Dharmendra Pradhan has finished his Russia visit. He explored possibilities of increasing Indian footprint in the Russian energy sector and invite Russian companies to invest in gas distribution across Indian cities. As per reports, a roadmap and action plan for cooperation in oil and gas sector may be unveiled. The ONGC Videsh (OVL)-led consortium acquiring further stakes in Vankor oil field could also be announced.
Despite various efforts, the weakest link continues to be limited commercial ties. Soviet Union used to be India’s number one trading partner. With annual trade worth around $9 billion, Russia ranked number 30 in 2018 in the list of India’s major trading partners. Various trade targets agreed at earlier summits have not materialised. It is becoming clear that both economies have moved away from each other significantly and limited policy measures have not helped. One takeaway from the upcoming summit could be the launch of FTA negotiations with the Eurasian Economic Union (EAEA) consisting of Armenia, Belarus, Kazakhstan, Kyrgyz Republic and Russia. The industry’s perceptions of India-EAEU FTA are positive.
Commerce and Industry Minister Piyush Goyal hopes to achieve $30 billion bilateral trade target by 2025. In early August, he led a large business delegation consisting of 140 Indian companies to Vladivostok. The delegation also included chief ministers of Uttar Pradesh, Gujarat, Haryana and Goa.
Due to American sanctions, India may be paying some of its major arms imports through the Rupee-Rouble mechanism. This may create some new opportunities for Indian exports. To improve connectivity there is renewed interest in the International North South Transport Corridor. Discussions are also underway on starting a direct shipping link between Chennai and Vladivostok to boost India’s Act-East policy.
In normal times, Modi’s sojourn to Russia would have been just another routine India-Russia summit. A clear Russian support on Kashmir issue has made this visit special. In return, Russia may bag some big-ticket defence, nuclear and energy deals. A military logistics support agreement is also likely.
Gulshan Sachdeva is Jean Monnet Chair at the School of International Studies, Jawaharlal Nehru University and Editor-in-Chief International Studies. Views are personal.
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