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Medvedev Flair Firms Up Indo-Russian Relations

Ajish P Joy
29 December 2010

Russia’s Ambassador to India, Alexander Kadakin was spot on when he pointed out that India is like a bride being wooed by many suitors. In a span of six months, New Delhi hosted the British Prime Minister, the US President, the French President and the Chinese Prime Minister. The diplomatic season was brought to a close by the visit of Russian President Dmitry Medvedev which took place on December 21-22.

President Medvedev arrived in India at a time when Indo-Russian relations were losing some of its historic charm and lustre for a variety of reasons, and as a result, expectations from the visit were, at best, moderate. Issues like India’s growing closeness with the United States, Russia’s increasing engagement with Pakistan and China, the differences that cropped up between India and Russia at the recent RIC summit on the new initiative for Asian security architecture, real and perceived differences on the Afghan situation had caused some strain in bilateral relations. Since India-Russia relations lack a sound economic motive, any political disagreement can be detrimental to the future of ties.

President Medvedev’s visit to a large extent dispelled the notions about the downhill trajectory of bilateral ties. He made the right noises on all the issues sensitive to India. He supported Indian positions on AfPak, 26/11, and endorsed India’s candidature to the UN Security Council. During the visit, India and Russia signed about 30 deals covering a wide spectrum of issues ranging from sharing the best practices in the field of elections to providing a framework for checking illegal migration. They have also agreed to step up efforts to achieve the target of bilateral trade of $ 20 billion by 2015.

Quite naturally, the most promising deal was struck in the defence sector for the Fifth Generation Fighter Aircraft (FGFA). The Sukhoi Design Bureau, Rosoboronexport and Hindustan Aeronautics Limited (HAL) signed the Preliminary Design Contract for the FGFA. It will be based on the Sukhoi T-50 platform with a possible $35 billion tab for around 250 fighters which are expected to be delivered starting in 2020. “The total cost including options and the value of production will make this the biggest defence programme ever in the history of India”, according to the Indian Defence Ministry. There is also the option of selling the FGFA to friendly countries. Rosoboronexport, UAC (United Aircraft Corporation) and HAL also signed a deal to set up a joint venture to develop and co-produce 250 multi-role transport aircraft –a deal worth approximately Rs. 2,900 crore.

Nuclear energy cooperation was another area which witnessed extensive negotiations during the presidential visit. However, some questions regarding the financing of the new reactors and the likely impact of India’s nuclear liability law on the Russian suppliers remain as irritants. However, Sergei Kiriyenko, head of the Russian atomic energy corporation Rosatom, reiterated Russia’s commitment to build 18 reactors across three sites in India in the near future. India’s department of atomic energy and Rosatom also signed an MoU to undertake joint research and development in reactor technology and related fields for peaceful uses of atomic energy. This involves developing new generation fast neutron reactors and mastering the thorium-cycle. The two countries agreed to consider cooperation in the peaceful uses of nuclear energy with third countries as well.

In the hydrocarbon sector, where the potential for cooperation is unlimited, India and Russia signed an agreement for joint undertaking of projects in the oil and gas sector in India, Russia and third countries by the oil and gas companies from both countries. India and Russia have “agreed to undertake bilateral cooperation in the oil and gas sector and advocate ‘non-discriminatory access’ to all international hydrocarbon markets, and energy technologies”. Meanwhile, Russian company Sistema and ONGC have agreed to combine their hydrocarbon ventures in Russia by merging together BashNeft, RussNeft and Imperial Energy. This move makes ONGC a key shareholder in the new joint venture which accounts for annual oil production of 25 million tonnes, apart from the licence to develop new fields like Trebs and Titov in the Arctic.

In the space sector, India and Russia concluded a deal granting India access to Russia’s space-based navigation system GLONASS (Global Navigation Satellite System). GLONASS like its American counterpart GPS (Global Positioning System) can be used for both civilian and military purposes and allow users to determine their positions to within a few meters.

Another notable agreement was signed to simplify procedures for expediting visas for people who travel for purposes of business, tourism, conferences and seminars-a demand that has remained unaddressed for long.

Both countries have decided to work together in disaster forecasting and management, IT and IT-Enabled Services. The pharmaceutical sector witnessed a few deals signed by the private sector companies. Dr Reddy’s Laboratories, Biopharm and Naprod Life Science from India have inked deals with Russian firms R-Pharma, Arkihin and Pharmasyntez respectively. Tata has signed a deal with Skolkovo for hi-tech manufacturing, while Reliance Industries and Sibur have concluded an agreement for the production of butyl rubber in India.

During the presidential visit, Russia’s Vnesheconombank has signed agreements with State Bank of India and the EXIM Bank for intensifying cooperation in the banking sector while Gazprombank has decided to set up an Official Representative Office in India. Another agreement was signed between the Indian Board of Excise and Customs and the Russian Customs Service on exchange of information on foreign trade to strengthen the regulatory framework for monitoring bilateral trade.

Medvedev expressed total support for India’s fight against terrorism and the India-Russia Joint statement categorically asserted that no modern and civilised state can hide terrorists, referring to the 26/11 attacks in Mumbai. Russia endorsed the Indian position that “states that aid, abet or shelter terrorists are as guilty of acts of terrorism as their actual perpetrators”. The statement also echoed Indian position on Afghanistan by stressing that a stable Afghanistan is possible only by dismantling the “safe havens and infrastructure for terrorism and violent extremism that are present in Afghanistan and Pakistan”. President Medvedev acknowledged that Russia too faces the spectre of terrorism and offered to share with India the considerable expertise and skills gained by the Russian forces in anti-terror operations.

The Russian president endorsed India’s candidature for a membership in the UN Security Council and noted that “India is a strong and deserving candidate” if the decision to expand the organisation is taken. However, he also indicated that this is not going to be an easy process as it requires building a consensus among the UN members.

Overall, President Medvedev’s visit was successful as it added substance to the political, economic and strategic legs of India-Russia cooperation. The president also added some flair to the normally staid diplomatic engagements by visiting the Taj Mahal and “rekindling Russia’s Bollywood love affair” with a trip to a film studio in Mumbai. No wonder the Financial Times declared Presidents Obama and Medvedev as winners in a ranking of the UN P-5 leaders who have visited India in the last six months.

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Hemant Karkare laid down his lives fighting terrorists during the Mumbai attacks, on 27 November 2008.

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