Trade, energy and defence take centrestage in Modi’s talks with Putin - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Thursday 24 December 2015

Trade, energy and defence take centrestage in Modi’s talks with Putin

From the joint statement:

Beyond six nuclear power reactors at Kudankulam, Russia welcomed progress in identifying second site in India for additional six nuclear reactors.

Inter-governmental agreement (IGA) for building Kamov-226 helicopters under “Make in India” scheme.

Joint Study Group for studying possibility of hydrocarbon pipeline system connecting Russia and India.

ONGC Videsh pact with Rosneft for acquiring 15% stakes in Rosneft’s Vankorneft oilfields and discussions for further stakes in future.

Direct trade in diamonds between Russia and India and creation of a Special Notified Zone (SNZ) at the Bharat Diamond Bourse

Finalized visa pact to issue six-month, multiple entry, tourist visas, based on reciprocity.

MoU between "GLONASS” and Centre for Development of Advance Computing (C-DAC) for cooperating in commercial applications through integration of Russian and Indian satellite navigation systems.

* * * * *

By Ajai Shukla
Business Standard, 25th December 15

Visiting Moscow at a time of trouble, when international sanctions over Ukraine are compounding the blow to Russia’s economy from plummeting oil prices, Prime Minister Narendra Modi signalled clearly that, notwithstanding India’s warming relations with the United States, Russia remains a privileged partner.

“We have stood together in bad times and good”, Modi reminded businessmen and officials at the CEO’s Forum in Moscow.

Defence, space and nuclear and hydrocarbon energy remain the four key pillars of the Indo-Russian partnership, but Modi placed an unusual focus on business and commerce. He talked up India as an investment destination, stating that its 7.4 per cent GDP growth is the highest amongst large countries.

“I have come to invite Russia to be a partner in India’s economic development”, said Modi. “We want to make India into a global manufacturing hub.”

Modi specially mentioned Russia’s interest in participating in the Delhi-Mumbai Infrastructure corridor. “I see Russia as a partner in India’s economic transformation”, said the prime minister.

While bilateral annual trade languishes at $10 billion, the two countries have set an ambitious target of tripling that over the coming decade.

The body language between the two leaders lacked the effusiveness of Modi’s earlier engagements with the leaders of the US, Japan, UK and France. However, Modi personally credited Putin for resurrecting the Indo-Russian strategic dialogue.

“You are the architect of the India-Russia Strategic Partnership… I have always had great respect and appreciation for (it)”, said Modi.

Defence was expected to be the highlight of the dialogue, but the joint statement only mentioned the signing of an Inter-Governmental Agreement (IGA) for manufacturing the Kamov-226 light helicopter in India.

“The (agreement) on manufacture of the Kamov 226 helicopter is the first big project under the ‘Make in India’ initiative. It is rightly with our most important defence partner”, said Modi.

There was no indication whether the Indian partner for this project would be Hindustan Aeronatics Ltd, or Reliance Defence, both of which are keen on this project.

It is noteworthy that there was no official mention of the S-400 air defence missile system, or the Fifth Generation Fighter Aircraft (FGFA), all projects that were discussed during the visit. The joint statement after the talks has only a cursory mention of defence.

Energy cooperation was an expected highlight, with the two sides talking about building 12 Russian nuclear reactors, in two different locations. While four reactors already have the green light in Kudankulam, Tamil Nadu, and another two are being discussed; the next six reactors will come up at another location, probably Andhra Pradesh.

“Cooperation in nuclear energy (will eventually involve) twelve Russian nuclear reactors in two sites. The Indian manufacturing content has been increased in these. I thank President Putin for his support”, said Modi.

The Indian prime minister also talked up Indo-Russian cooperation in hydrocarbons, stating: “Russia can be a critical source of energy security for India. We are enlarging investment in Russia hydrocarbon sector.”

In September, ONGC Videsh Ltd (OVL), the overseas arm of Oil and Natural Gas Corporation (ONGC), had signed an agreement to buy a 15 per cent stake i Russia's second-largest oil and gas field, Vankor.

The joint statement put out by New Delhi and Moscow “welcomed the signing of Agreement between Rosneft and ONGC Videsh Limited for acquiring 15% stakes by OVL in Rosneft’s Vankorneft Oil fields and discussions for further stakes in future.”

The joint statement also “welcomed the first meeting of the Joint Study Group for studying the possibility of hydrocarbon pipeline system connecting Russia and India held in Moscow on November 6, 2015 as part of the Programme on Enhanced Cooperation in the Oil and Gas sphere signed in New Delhi in December 2014.”

Modi flagged cooperation between India and Russia on Afghanistan and Central Asia, specifically mentioning the road-cum-rail transportation corridor being built, with Indian support, through Iran’s Chabahar Port to those regions.

Significantly, the Indian prime minister backed Russia’s role in Syria, which has been sharply criticised by western powers for being supportive of Basher Assad’s regime. The joint statement notes: “Russia and India voiced their strong support to sovereignty, unity and territorial integrity of Syria. Both sides expressed a common understanding that the internal armed conflict in Syria cannot be solved by the use of force, but rather through political and diplomatic means – through a substantive intra-Syrian dialogue without preconditions or external interference…”

This constitutes vital diplomatic support for Moscow. Putin told the media after the bilateral dialogue: “It is important Russia and India make similar approaches to key international problems. Our countries are for a political settlement of the conflict in Syria and promotion of national reconciliation in Afghanistan.”

He also lauded the “high degree of (Indo-Russian) convergence on global issues”, terming Indo-Russian cooperation on the United Nations, BRICS, East Asia Summit, G-20 and Shanghai Cooperation Organisation as “a partnership of global character”. 


  1. This means S-400 is given the short shrift.Tor-M1 is a relatively dated system.Irrespective of the reasons ,the visit was not a big event then.

  2. Its great news to know that the FGFA is being killed finally. This will surely pave the way for the indigenous AMCA. In any case, the FGFA had ZERO Indian technological input, and was only a cash sink for India.

    That cash can now be effectively deployed to develop the AMCA. Since private participation is the flavour of the day, we can rope in the Ambani brothers, the old Parsi houses of yore (Godrej, Tata et. al) and the sethjis who sit on the sidelines impatiently (Bharat Forge, Walchandnagar). The AMCA can surely be made successful if these private players are roped in to tap into their manufacturing efficiencies.

    The less said about S-400, the better. The monies saved in that expensive toy, must be deployed to the already successful PAD-AAD to increase its range, and have it deployed over all major cities and installations of India.

  3. "The body language between the two leaders lacked the effusiveness of Modi’s earlier engagements"
    At least one journalist is willing to describe the India-Russia relationship as it is....lukewarm, on the way to getting icy cold. Though many Russians discern that their relationship with China carries with it, significant perils for Russia in the future; a debate with a dictatorial rules is obviously out of question.
    On Syria, the Indian support appears tongue-in-cheek...."Godspeed to Russia into its new quagmire". India should position itself to collect more Russian crown jewels in the future.

  4. There is no justification in the procurement of huge amounts of military hardware from USA and Russia. The prices are abnormally high. What is the justification of the prices of the various equipment and systems being procured? The procurement of specially the helicopters is against our national interest. Indian helicopters, ALH Dhruv / Rudra are more suitable for Indian conditions including for the purpose of deployment in Siachen. This is also an act of compromise on national security and negligence of Defence PSUs. Despite huge supply backlog, there is no effort to increase the manufacturing capacity of Helicopters in HAL. There is delay in induction of LCH. Is this for justifying procurement of helicopters from USA and Russia. Government actions appear to be non-transparent. 'Make in India' is a mere slogan and gimmick for future elections in mind. ALH Dhruv, the indigenous helicopter can be exported to many countries. HAL and MoD is not making any effort for the same. What is the motive in delaying the partial dis-investment of Defence PSUs such as HAL, BDL, GRSE, MDL etc.
    The political leaders must know that media is showing families of farmers in Bundelkhand eating chappatis made of grass.

  5. The comments and the article have no relationship to each other. While the comments are universally and entirely negative, the article is positive and demonstrates strong improvement in current ties. The FGFA according to HAL's chairman will be decided in 6 months, and Reliance will produce the S-400 so a lot of good has come from this visit.

    Indo-Russian fighter aircraft project regains speed: HAL

    India's Reliance, Russian Almaz-Antey in S-400 Missile Partnership

    In addition a FTA with Eurasian Economic Union should be up and running by 2020, along with rupee-rouble trade. A great deal has changed in the relationship,which was moribund and stuck in the past.

  6. Raahul Kumar posted a dated article on the FGFA. It was before the PM's visit to Russia and "hoped" that the PM would discuss it with Mr. Putin.

    Thankfully, Col. Shukla you've reported that the FGFA discussions came a cropper at Moscow, and the FGFA may well be consigned to the bins in India, paving the way for the indigenous AMCA.

    Similarly, Raahul's dated article about the supposed partnership between Reliance and Almaz-Antey is just that: talks and contemplation. Luckily once again, the S-400 too did not make any headway at the discussions between PM Modi and Mr. Putin in Moscow.

    Raahul Kumar, please learn to post articles that are CURRENT, and not relatively dated to the posts made by Col. Shukla. Or, is this a deliberate attempt to whip up positive opinion about Russian wares, when there really is none?


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