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Opinion | The value of strengthening India-Russia relations

India needs Russia as it is one of the very few countries that has transferred defence technology to India.

February 28, 2019 / 07:48 PM IST

RN Bhaskar

India-Russia business relations have already crossed $30 billion a year and expected to hit $50 billion mark by 2025.

There was near unanimity on this statement, as both India and Russia met at a public forum organised by the Confederation of India Industry in Mumbai on February 21.  Business relationship has accelerated during the last four years. The two-way investment has already reached $30 billion—almost seven years earlier than the target. CR Chaudhary, Minister of State for Commerce and Industry, Government of India, stated that the government has now revised its target to $50 billion for 2025.

In some ways, this was expected.  As this author has said before, it is inevitable that the gravity of  world commerce will shift to the East if India, China and Russia work together.

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Among the countries surveyed, China has the least water as a percentage of its land mass. Typically, as the nation industrialises, the share of water used by agriculture comes down, driven by efficiencies and the growing importance of the industry.  As China began to build factories, its planners realised that they would be short of water.

This could be one of the reasons why India-China border cries became shrill. India feared that China would draw away water of Brahmaputra.  In 2004, studies on water flow showed that although two-thirds of the Brahmaputra flowed in China, its territory accounted for just 20 percent of the river’s waters. Almost 60 percent of the water came from Arunachal Pradesh.  It might be coincidental, but cries over Arunachal Pradesh became shriller thereafter. However, it got muted by 2013 for three reasons.

First, China itself began to realise the significance of India as a big market. Second, China discovered that falling solar energy prices could allow it to get fresh water through the desalination process. Third, as this author argued in 2009, China started building a canal from Russia, which has the world’s largest reservoir of fresh water. Russia has 13 percent of its land mass under water. The inevitability of water being sourced from Russia was obvious to any student of geopolitics.

In some way, the US allowed Russia and China to come closer. When the US tried to wean the EU away from Russian gas during the Ukraine crisis, Russia negotiated a deal with China to build a gas pipeline at a competitive price.  Hitherto, much of its energy came from the Middle East, through Malacca Straits, passing through Korea and Japan.  These were encircled by the US Navy and military establishment (see John Pilger's documentary: The Coming War on China).  Its need to find another route was urgent (which is another reason why it needs Pakistan). Now, water, too, becomes a critical supply from Russia.

Take a look at Russia. It has the largest land mass.  It also has the world’s largest reserves of oil & gas and gold.  However, its population density is among the lowest in the world. It does not have people to exploit its national resources and this is where China could help. But, as Chanakya remarked in Arthashastra, the next door neighbour may be a friend, but he can also be your worst enemy.

Russia, therefore, needs India.  Negotiations are already underway to work out ways in which Indians could help Russia exploit its natural resources. The partnership between OVL (ONGC’s subsidiary) and Russia is a major step. The plan to rope in Tata Power to exploit its coal mines should be seen in this context.  Expect more such steps.

With rising tension between the US and China, the latter will need India for making its 5G telecommunication solutions the global standard. If India and China adopt this technology, the latter’s 5G automatically becomes the new global standard.

In the defence sector, China is unlikely to get the latest technology from Russia—it would not like to further strengthen its neighbour.  This explains why Russia is willing to give its best and latest technologies to India, and not to China.

Expect many more such instances of confluence among the three countries.  The $30 billion investment is just for starters.  It could swell phenomenally, as Russia remains one of the closest defence allies for India.  India needs Russia as it is one of the very few countries, which has transferred defence technology to India.

Additional synergies are now being discovered. For instance, as Denis Manturov, Minister of Industry and Trade, Russia, said that Russia's goal is to have 40 percent of GDP contribution from the SME sector and India- Russia collaboration can play a major role in this area.

Further, sectors like information technology, healthcare, biotech and waste management are areas of interest to both countries.

(The author is consulting editor with Moneycontrol.com)
RN Bhaskar
first published: Feb 28, 2019 07:48 pm

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