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Up Front

Mr. Putin Goes to India: Five Reasons the Russian President Will Be Welcomed There

Tanvi Madan

On December 10, Russian president Vladimir Putin will head to India for the annual India-Russia summit. This time, Narendra Modi will be on the other side of the table. It is Modi’s first time leading the Indian delegation. However, he is not entirely unfamiliar with Russia, having visited the country three times when he was chief minister of the state of Gujarat. Nor is this his first meeting with Putin; the two leaders have met twice before this year on the sidelines of the BRICS and G20 summits and Modi has also met a couple of times with the Russian deputy prime minister. As Modi and Putin meet this week, however, the contrast in their domestic and global contexts is particularly striking. Modi has spent the last few months being feted around the world. Welcome mats aren’t really being rolled for Putin in too many countries. Sentiment about India is bullish; about Russia bearish. There’s talk of India as a rising power and Russia as a declining one. Though both Modi and Putin remain popular domestically, the Indian prime minister has promised his country that good times lie ahead; Putin, on the other hand, cautioned his people last week about the hard times ahead.

During the trip, there are expectations of agreements being signed, with deals on defense, diamond trade, energy and joint production of civilian aircraft reportedly on the agenda. This will be a short visit; Putin didn’t take up Modi’s request that he spend more than a day in India and travel outside Delhi. While there were reports that Putin would address a joint session of parliament – an honor last given to him when he first visited India as president in 2000 and most recently given to President Obama in November 2010 – this, too, hasn’t materialized. The reason offered for not taking up the invitation: “his tight schedule and pressing engagements.” Instead, there might be a joint Modi-Putin appearance at the World Diamond Congress. This indeed might be a way of demonstrating that the two countries intend to move their commercial relationship forward. Direct diamond trade, in particular, offers a mutually-beneficial opportunity with India by far the largest processor of rough diamonds in the world and Russia the largest producer.

It’s not difficult to see why a good relationship with Delhi continues to be important for Moscow. It doesn’t have too many friends right now and has been hit by sanctions. India offers an option, reiterating as it has that it “cannot be party to any economic sanctions against Russia.” India is a key market for Russian goods, especially military equipment. As India consolidates and expands its relationships with other key countries, the trip also offers Putin an opportunity to demonstrate continuing Russian relevance to India and to maintain or build its foothold, especially in two critical areas for India: defense and energy. 

Why will he be welcomed in India? Because even though India-Russia ties aren’t what they used to be, Russia’s utility for India remains.

Defense

Russia’s share of Indian defense imports has been declining, but it remains the largest supplier of military equipment to India. So, even though Russia doesn’t have the 79 percent share of Indian expenditure on defense imports that it did in 2003, it still had a 68 percent share in 2013 (the U.S. was next in line with an 18 percent share). There are also bilateral co-production and co-development projects in place or being discussed. As a senior Indian official put it bluntly, Russia is India’s “primary defense partner and will remain so for decades.” With a legacy relationship and years of experience in this realm, Russian companies and officials are familiar with the Indian defense acquisition system and process, and have developed networks and habits of cooperation that will ensure they remain critical players in this sphere.

On India’s part, there is a move to diversify away from the heavy dependence the country has had on imports from Russia. However, a number of Indian government officials and analysts continue to see Moscow as more willing to provide India defense technology that others won’t and less likely to subscribe to any potential sanctions against India that might result in a cut-off of spare parts. There are also areas like space cooperation where some see possibilities for the two countries to work together.

Energy (and Economics)

India is the fourth largest energy consumer in the world and imports some amount of its top three energy sources: coal, oil and natural gas. About three-quarters of the crude oil India consumes is imported and this percentage has been growing. Critically, 62 percent of those imports came from the Middle East in 2013. Indian policymakers would like to diversify its sources of supply. Russia, which currently is a source of less than 0.5 percent of oil imports, is seen as part of the answer. While India doesn’t currently import natural gas from Russia, this might be a possibility discussed as well. Russia is also active in India’s civilian nuclear energy space, though its two reactor projects have run into problems (associated with liability concerns) and this has thus far stalled any further development on this front.

Along with potentially broader energy deals, Indian officials would also like to see Indian oil and gas companies get better terms and more investment deals in Russia. Currently, ONGC Videsh Limited (OVL), a subsidiary of India’s largest state-owned oil and gas company, has a 20 percent stake in the Sakhalin-I project and 100 percent ownership of Imperial Energy. In past years, as the energy-hungry consumer, India has found itself on the back foot in negotiating energy deals. It has also found countries like China (and its companies) with more buying power getting better terms. In recent years, with oil and gas producers looking to diversify their markets (or influence Indian decision-makers’ choices on other fronts) and the energy revolution in the U.S. changing global dynamics, India has found itself better placed in negotiations. With Russia now seen as the one on the back foot, Indian policymakers will hope to use that as an advantage. Just as Beijing got itself a nice energy deal recently, Indian officials and companies will be hoping for better terms on energy deals with Russia (though perhaps not to the same extent as China).

While, as is usual, there has been no pre-announcement of the agreements that will be signed during the visit, there is speculation ranging from investment opportunities for Indian oil and gas companies in Russia to an announcement of a feasibility study for a pipeline. However, there have been differences on the right price and terms on the former and doubts about the practicality of the latter. There’s also speculation about a long-term oil and/or gas supply deal. The attraction of such a deal for India at competitive prices (and on a long-term basis): it’ll help the country diversify its current sources of supply, as well as leverage this deal for better terms with other countries. However, such a deal will also perhaps most raise eyebrows in the U.S.

Beyond energy and defense, both India and Russia also want to expand the economic relationshp. There has been disappointment at the relatively stagnant nature of these ties. An Indian official recently stated that trade stands at $10 billion. Indian commerce ministry figures on trade in goods in 2013 to 2014 listed the amount as $6 billion, with India facing a $1.7 billion trade deficit with Russia (compare that with the trade in goods that India has with China or the U.S., which is ten times that between India and Russia). Regardless of which figures you take, the $20 billion target set for 2015 seems long forgotten. The investment relationship has never really taken off either. Of the $6.5 billion of estimated Indian investment in Russia, $4.3 billion is accounted for by two OVL investments (in Sakhalin-I and Imperial Energy).

Global and Regional Issues and Institutions

India has found Russia to have utility on the global stage as well. In the United Nations Security Council, Moscow has exercised its veto for India’s benefit in the past. It has also endorsed a permanent seat for India on the council and supported Indian membership in organizations like the Shanghai Cooperation Organization (SCO). Like India, Russia is a member of the BRICS grouping and in both the SCO and BRICS, Moscow could potentially help off-set some of Beijing’s influence.

India shares some concerns with Russia, including about external support for regime change, U.S. unilateral intervention, and sanctions. The latter is a particularly sensitive subject; India has been on the receiving end of western sanctions and Modi knows intimately what it’s like to be isolated by the U.S. and western countries. The Indian government has also found itself on the same page with Russia on issues like Iran, Libya and Syria in the past. Moreover, India believes it shares with Russia an interest in stability in Afghanistan (and a non-Taliban government there).

Issues related to “sovereignty” (and its protection) were another area of commonality. The Russian annexation of Crimea has, however, made this aspect complicated. While Delhi did not publicly condemn Russia or isolate that country, the previous Indian prime minister emphasized to Putin the Indian position on “the unity and territorial integrity of countries” and Modi has broadly criticized countries with “expansionist mindsets” that encroach on others’ lands and seas.

China

Indian policymakers have watched with wariness Russia seemingly moving closer to the country that that encroachment remark seemed primarily targeted at: China. Indeed, one of the reasons Delhi has been concerned about Russia’s tension with and isolation from the U.S., Europe and others like Australia is that these are seen as pushing Russia toward China. This worries India because for the Indian government, Moscow, too, plays a role in managing China’s rise.

The role that countries like Japan and the U.S. might play in an Indian balancing strategy vis-à-vis China gets a lot more attention. That makes it easy to forget that Russia (and, before it, the Soviet Union) has traditionally been part of the strategy as well. Indian policymakers don’t necessarily expect Russia to take India’s side against China – though that would be a bonus – but they fear Moscow putting its thumb on the scale for Beijing. Sino-Russian (and, previously, Sino-Soviet) tension has been useful for India, either by keeping Moscow neutral or by distracting Beijing or by leading Moscow to aid India. Any Russian movement toward China is seen as having negative consequences for India and potentially requiring India to look too much to the U.S. and its allies to play that balancing role. 

Diversification

Russia is also seen as being a crucial component of India’s diversification strategy. This strategy involves establishing and maintaining relationships with multiple countries in order to maximize benefits and minimize risks to Indian objectives. For Indian policymakers, it allows them to keep their options open, spreads the risk of dependence, minimizes the leverage that any one country can have and facilitates freedom of action. Thus far, the Modi government has stayed with this key element of Indian foreign policy. Even as it has tried to consolidate and expand relations with countries like Australia, Japan and the U.S., it has also worked to maintain and build its relations with China and Russia.

Indian policymakers have reliability concerns about all external actors. Yet in the Indian foreign policy narrative, Russia is seen as more dependable than, say, the U.S. Analysts will particularly invoke Moscow not cutting off supply of spare parts during India’s 1965 war with Pakistan (when the U.S. and U.K. suspended military assistance to India) and Russia coming to India’s assistance during the 1971 India-Pakistan war. Ask policymakers and analysts in the know and they will provide a more nuanced story – that Russia, like other external benefactors, has also been fickle. During the 1962 China-India war, it chose its brother China over friend India, even providing Beijing with intelligence on India. Yet, in relative terms, Russia is seen as more dependable. Thus, policymakers outline Russia’s “unstinting” and “long-standing and steadfast” support for India and Modi has described Moscow as “a time-tested and reliable friend that had stood with India in difficult times.”

The visit will be an opportunity to demonstrate (rhetorically at the very least) to Putin that Delhi won’t jettison Moscow in tough times and that Russia will continue to have a place in Indian foreign policy. But it will also likely give India an opportunity to express concern about Russia’s own diversification plans: not just vis-à-vis China, but also Pakistan. The Russian defense minister’s recent visit to Pakistan in November and the defence deals, after all, did not go unnoticed in India (and it was perhaps designed to be noticed).

Conclusion

These are also some of the reasons that the Indian government has tried to avoid taking a public stance on the Russia-Ukraine situation, with Modi refusing to get drawn into discussing the issue. The Obama administration has stayed relatively silent publicly about this Indian approach—partly because any public condemnation would likely be futile, at best, and counterproductive, at worst. However, Putin’s visit—and particularly any significant deals signed—might elicit a reaction from some quarters of Capitol Hill and the commentariat.

Chances are that some observers will also invoke the word “non-alignment” in response to the Putin visit, but it’s worth keeping this visit—and the India-Russia relationship—in perspective. Even as India has a “special and privileged” partnership with Russia, it has a “strategic and cooperative” one with China, a “special strategic and global” one with Japan, and a “broad strategic and global” partnership with the U.S., which is also a “a principal partner in the realization of India’s rise.”

This is not the Cold War and today’s India-Russia relations are not the India-Soviet relations of then. As observers have noted, the relationship has indeed been “sagging,” with the distance between the two growing. There are indeed strategic elements to and reasons for the relationship, but in recent years it has been mostly a transactional one. The sentimentalism is also missing. While Modi might state that “every child in India knows that Russia is a true friend of India,” it is not clear that younger generations of Indians share or will share that sentiment toward Russia or frankly even give it much thought. With half of India’s population below the age of 25, a significant proportion of Indians were born after the Cold War. Russia is not the country that Indian parents send their children to study and Russian is not the foreign language that students are rushing to learn. India’s strategic elite aren’t found as much in dialogues and conferences in Moscow as they are in Beijing, London, Singapore, Tokyo or Washington. In a Lowy Institute survey, those Indians polled about their feelings of warmth (or not) toward various countries ranked the U.S., Singapore, Japan, Australia and France above Russia.

Moreover, the diversification strategy mentioned above that means that India will continue to maintain its partnership with Russia is also why it will neither ally with nor move closer to that country. One of the main reasons Delhi gravitated as much as it did toward Moscow during the Cold War was that it didn’t have any other options. As long as those other options are available today – and especially if they expand – Delhi will limit its own relationship with Moscow.

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