- India will never go along with any Russia sanctions
- It's position on Ukraine is made clear by the fact it will invest in Crimea
- India wants to join the Shanghai Cooperation organization in 2015
- The countries are de-dollarizing bilateral trade
This article focuses on the political aspects of the visit. For the business side see here.
Political assurances on the Russian-Western standoff Putin received in India are not spectacular news.
And that really goes to show how much the countries have in common – understanding on such matters goes almost without saying.
This is an excerpt from an article that originally appeared in The Diplomat
Russian President Vladimir Putin’s annual summit visit to India this year was a brief affair. Putin came looking for assurances that an India led by Prime Minister Narendra Modi would have no truck with Western attempts to isolate Russia and will continue to be a “time tested and reliable” partner, especially at a time of economic difficulties for Russia.
These, he received. India has given the Russians both official as well symbolic reassurance that it does not support Western sanctions.
In return, India has got its own set of guarantees at the highest level from the Russians for spares for existing Russian-origin military hardware, with Moscow agreeing to move more quickly on transferring technology for the equipment to Indian firms. Keen to retain its position in the Indian defense sector, Russia has also become the first major arms exporter to come on board with India’s military-aerospace industrial goals under the “Make in India” program, with an initiative to produce and even export Russian origin helicopters from Indian soil being announced during the visit itself.
At a time when Russia needs India’s high-end human resources and its market size and India requires more high-value manufacturing elements, the long-standing trust between the two sides seems to be helpful.
While the joint vision document released during the visit explicitly notes that India and Russia oppose economic sanctions that do not have the approval of the United Nations Security Council, it was perhaps the fact that a business delegation led by the Crimean prime minister accompanied Putin on his visit that was more revealing of India’s stance on Ukraine.
The Indian government is apparently encouraging Indian businesses to engage more deeply in Crimea, in a clear signal that it stands with Russia irrespective of American positions. In fact India is going even further than China is in making its support for Russia clear.
And that of course is by design, since India does not want Russia to step back from its traditional role of maintaining a power balance in Eurasia.
Of course, India will need to offer more than just support on Crimea if it is to prevent Russia from becoming overly dependent on China at a time when Moscow needs to re-orient itself away from Western markets.
It is here that Modi’s statement on Russia remaining India’s primary defense partner despite other options for his country becomes important. The Russian embassy in India has been rather voluble of late in denouncing India’s turn towards the United States and France as defense partners, while Russian spares support for existing programs had become rather uneven – leading to calls in India to scale back its military partnership with Russia. That moment has now passed.
Overall, given the urgent need to boost trade (which languishes at a mere $10 billion) and private investment, both sides are moving forward on rupee-ruble trade with their central banks working out the modalities and export-import banks discussing new credit guarantees that would facilitate loans in local currencies for Indian and Russian companies seeking to participate in each other’s economies.
This is of course in sync with BRICS efforts to trade in bilateral currencies in a bid to reduce the influence of the dollar. Of course, it will ultimately also depend on how quickly bilateral economic activity grows between the two sides.
In the multilateral sphere, India wants the 2015 Shanghai Cooperation Organization Summit in Ufa to be the moment it finally becomes a member of that organization. With China having supported India’s membership and Russia presiding over SCO at the moment, this will be a key test of India-Russia ties. No wonder Putin’s special representative remarked recently that Moscow will do whatever it can to secure India’s membership.
Just as India does not want to push Russia into China’s grip, Russia doesn’t want to see China become too dominant. With this in mind, Russia’s partnership with India in strategic deterrence programs will grow in strength, already evident in their nuclear agreement and the fact that Russia has made available military GLONASS signals to India for ballistic missile targeting.