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Prime Minister Manmohan Singh will embark on a crucial trip to Russia from this Sunday, October 20. During the visit, a number of pacts are expected to be signed in key areas of trade, business and energy. Talks on important issues such as nuclear cooperation and defence are expected to be held. Economics issues and boosting trade are set to dominate the Prime Minister's agenda.
India-Russia relations are multi-dimensional and include defence, space, energy, trade and investment, science and technology, education, culture and tourism. Russia has been one of India's trusted partners with whom India has mutual compatibility and a close political, military and economic partnership for decades. And the Indo-Russian relationship has evolved over time. Indian foreign and security policy, like Russia, is committed to the vision of a "multipolar" world, where the goal is diversifying one's diplomatic, trade, and defence baskets. With hopes high, the pertinent questions for this impending visit are: What has been achieved so far? What are the priorities? What should be expected from this visit? What should be further done to consolidate this relationship?
Russia is India's oldest strategic partner, yet trade and business relations remain lukewarm. In the post-Cold War era, Russia has displayed economic prowess, but India is yet to take advantage of it, despite its growing market. However, faced with massive investment needs, India is now keen on deepening commercial ties. There are indications that during the PM's visit, Moscow could offer concrete support in the in the form of investments in the Delhi-Mumbai Industrial Corridor Project (DMIC) and its larger presence in Russia's hydrocarbon sectors.
The DMIC Trust had recently cleared six projects worth Rs 1.10 lakh crore investments. The projects include Integrated Industrial Township at Greater Noida, Improvement of Water Supply System to Pithampur-Dhar-Mhow Investment Region in Madhya Pradesh, Integrated Multimodal Logistics Hub in Haryana and Construction of New Rail Line from Bhimnath to Dholera. It is expected that as soon as the International North South Corridor starts operating, the trade relations between the two countries would receive buoyancy, because the time limit of the consignment passing and reaching the destination will be much less than today and also it will be much cheaper.
Russia is the only country with which India has established an institutionalised defence cooperation mechanism operating at the Defence Ministers level. India-Russia defence relations have expanded beyond buyer and supplier to co-development and co-production in select fields such as missile development (BrahMos), Fifth Generation Fighter Aircraft (FGFA) and Multi Role Transport Aircraft (MTA). Yet this defence partnership is fraught with certain hurdles. There is the issue of inordinate delays in the delivery of Russian defence systems, which result in considerable cost escalation. Russia's privileged position as India's defence supplier of choice has come under pressure as India has shifted its priorities to the purchase of smart weaponry, which Russia is ill-equipped to provide.
During the meeting with Russian President Vladimir Putin, Singh is expected to assure him on concerns over India's nuclear liability law. The law needs to be cleared as it is crucial for the supply of Russian reactors for Units 3 and 4 of the Kudankulam Nuclear Power Project (KNPP). The effort is to basically match India's Civil Liability for Nuclear Damage (CNLD) Act, 2010 and the internationally and nationally accepted principles.
Singh is also expected to assure Putin of safety of Russian investments in the telecom sector. The safety and security of Russian investments in India is a major concern for the Putin administration. Sistema Shyam Teleservices Ltd, which offers mobile services under the MTS brand and its licenses were among the 122 scrapped by a court ruling. Russia has linked the grant of a 10 year tax holiday on Videsh Ltd.'s (OVL's) acquisition, Imperial Energy, to the restoration of the licenses of Sistema, which operates telecom services under the brand MTS in India.
On the geo-political front, Singh and Putin are expected to focus on Syria and Afghanistan among other international issues when they meet. Their stepped-up cooperation on Afghanistan comes at a time when India is worried about the departure of western troops from Afghanistan in 2014. Syria would form an important part of the dialogue as Russia wants to secure India's cooperation on the issue. Also, India wants an amicable solution to the crisis and finds in Russia a willing partner.
With the US now in relative decline, Russia and India are struggling with the implications of possible Chinese hegemony over the Asian strategic landscape. This is the subtext behind the rapidity with which the two states are trying to reinvigorate their relationship. Defence, of course, remains central to the two countries' bilateral relations, with Russia being India's biggest supplier of weapons systems. India's participation in forums like SCO, RIC and BRIC also needs to be strengthened, through which India and Russia can work to maintain regional security as well as enhance cooperation in the sectors of trade, economy etc. India and Russia have also been trying to engage each other through Comprehensive Economic Partnership Agreement (CEPA). Today Russia is a WTO member and it has formed Customs Union with Belarus and Kazakhstan for a "Common Economic Space". Therefore, it is expected that CEPA with the broader Eurasian region which may include India can evolve in near future. The Indian Prime Minister's visit is very important in this context as with the changing and complex global order, India needs to preserve its strategic relationship with Russia.
Political relations between Russia and India remain constructive as there is a climate of trust and a spirit of equal partnership. While much of the Indo-Russian relationship appears to be already existing ties, especially in the military-technical cooperation and in the hydrocarbon industry, trade and economic relations are faced with myriad challenges. It is time to diversify the trade basket to include technology, pharmaceuticals, processed food and other manufactures. If there is a bright future for India-Russia ties, it has to be linked to greater coordination of the private sector in both the countries. Now that stringent visa regulations have eased to certain extent, the dynamic private sector companies of both countries will also be able to connect with each other easily to boost-up the economic partnership.
By Special Arrangement with : Observer Research Foundation (www.orfonline.org)