This year’s India-Russia two-day annual meeting has concluded and President Putin is back in Moscow. India focused on energy while Russia bid for trade expansion in Asia, particularly India. Putin wants Indo-Russian trade to touch 100 billion dollars a year from its present 10 billion dollar level.
India has shortage of energy and its dependence on Gulf energy source is irksome. Destruction of Iraq put Indian oil supplies in jeopardy, making India seek out for alternatives.
Several agreements aiming at ensuring energy support to India were signed between the two countries during the meeting. Oil, gas, hydropower and nuclear sources have been explored.
Russian state run Rosneft and India's ESSAR signed a preliminary agreement under which Russia could ship some 10 million tons of oil to India during the next decade. Rosneft head Igor Sechin said deliveries could start in 2015 and that the contract could be prolonged if the two parties wish.
Another state-controlled Russian company, Zarubezhneft, signed a memorandum of understanding with Oil India, Russian gas giant Gazprom held discussions with India's GAIL for deliveries of Russian liquefied natural gas (LNG), and involved ONGC in oil and gas hunt in the Arctic. To boost India’s electric power generating capacity, a $1 billion joint venture to support hydro-electric power projects in India has also been agreed to.
More significant ground has been covered in the area of expansion of nuclear power production in India. Russia’s support in this field falls into two categories viz. building new energy units of NPP (Nuclear Power Projects) in Kudankulam for which India assured site near Kudankulam for Russian-designed nuclear power plant. Designs to start construction of the second stage of that NPP have been nearly finalized and a general framework agreement for building the third and fourth energy units were signed in Mumbai this April. Putin claims that the NPP Kudankulam is the world's only nuclear power plant that meets all the post-Fukushima safety requirements.
At the joint press conference, Indian PM Modi said that India has outlined an ambitious vision for nuclear energy of at least 10 more nuclear reactors with the help of Russia. "It will have the highest standards of safety in the world. It will also include manufacture of equipment and components in India," PM Modi said.
The agreement signed between Russian state nuclear company Rosatom and the Nuclear Power Corporation of India Limited (NPCIL) calls for the construction of 10 more reactors for nuclear power plants in India. Rosatom chief Sergei Kiriyenko said that a separate agreement was signed for construction of two more units at the Kudankulam nuclear power plant, where Rosatom has already built two reactors. Two of the 10 additional reactors are to be built at the Kudankulam plant, bringing the total number of units there to six, while six other reactors are to be built at a new site around Kudankulam.
India has reason to feel satisfied with the outcome of this year’s annual summit meeting. Reducing large scale dependence on Gulf States for oil will give India leverage in conducting foreign policy with greater flexibility and a measure of independence.
Traditionally, Russia has been the largest supplier of arms to India. Relations between the two countries came under some strain after Soviet Union broke up in 1991. While the Russian Federation needed to charter its new policy of international relations, India, too, could not go against the tide of the time. India felt unhappy with Moscow selling attack helicopters to Pakistan and having a defense understanding with that country. Putin tried to convince India that defense ties with Pakistan were essentially focused on (a) combating terror in the region, and (b) conducting anti-drug operations. He argued that both of these objectives also went in favor of India. In response, Russia groused that India got French Rafale fighter planes and American Apache helicopters, thereby sidelining Russia in military hardware deals.
But it seems the two sides have put these irritants behind and proceeded to open a new chapter, even in military hardware supplies. Infusing new blood in India-Russia defense cooperation, Putin spoke of a "gradual transition from the producer-consumer model to joint development and production of advanced weapons systems.” Among 16 agreements is a deal for Russia to manufacture one of its most advanced helicopters in India and a proposal to set up factories to make Russian spare parts for military equipment. Other joint strategic projects discussed by the Russian President include construction of new units for Indian nuclear power plants, promotion of the Russian Sukhoi Superjet-100 and MS-21 passenger aircraft to the Indian market, and creating a "smart city" using Russian technology.
The significance of this summit has to be understood in the light of Russia initiating a new strategy of reaching the Asian continent. Sanctions imposed by the US and European Union on Russia after Ukraine crisis compels Russia to turn to Asia for expansion of trade and commerce. Termination of the South Stream gas pipeline to Europe, brought under sanctions, prompts Moscow to find new customers for Russian hydrocarbon supplies, and India, on the basis of long friendship, is its most dependable customer.
Observers will try to keep track of the impact of 16 agreements concluded in New Delhi. Already an irritant has cropped up in the shape of the revelation made by the Reuter that Crimean leader Sergy Aksyonov, who brought about Crimea’s secession from Ukraine and accession to Russian Federation, was part of Putin’s delegation to New Delhi. However, the US State Department spokesman commented that India did not know that Aksyonov was in the official team and was trying to find out the facts. There is a subtle hint that it could have bearing on President Obama’s planned visit to India on the occasion of India’s Republic Day on 26th January 2015.
Putin’s visit and signing of crucial agreements are of considerable significance to regional and international strategy. Those who had been critical of Indo-Soviet bonhomie during the Nehru era will understand that Modi is trying to perform a balancing act. If it succeeds, we can call it a masterstroke of diplomacy.
A recent study by Britain's ministry of defense predicted that India is likely to be among the top three military powers in the world by 2045, along with the US and China, with a projected defence outlay of $654 billion. It is also likely to surpass Japan, Australia and South Korea by developing sizeable and technically advanced armed forces, including ocean-going navies, capable of delivering an enduring and capable maritime presence both regionally and further afield, according to the study titled 'Global Strategic Trends - Out to 2045'. Aggressively pushing its defense agenda, the Defence Acquisition Council (DAC) cleared purchases worth Rs 80,000 crore, including six submarines worth Rs 50,000 crore. DAC also approved the purchase of 8,356 Spike anti-tank guided missiles and 321 launchers from Israel. There is much more to be reported on Indian government’s defense priorities, which, if elaborated, corroborate the views of the British Ministry of Defence about India as the rising world power.
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