India and Russia conclude multi-billion dollar arms and energy agreements
Posted on Mar 12, 2010 | 0 comments
MoscowArms, oil, and nuclear energy have topped the agenda during Russian Prime Minister Vladimir Putin’s current visit to New Delhi. These are very much the sort of big concerns that have dominated mutual ties since the former USSR forged a close cold war-era friendship with India in the 1950s.
Russia announced Friday it would build up to 16 nuclear reactors across India, sell New Delhi more than 200 stealth fighter jets, and push to boost bilateral trade to $20 billion by 2015 from a current $8 billion.
As in the past, the two states seem at pains to trumpet their political agreements about the state of the world, their shared distaste for the US-dominated “monopolar” global system, and the vast potential synergies of their differently-based economies.
“With no exaggeration, India is our strategic partner,” Putin told a teleconference with Indian business leaders Friday. “That’s a reflection not only of the sympathies between our nations, but also a sign of almost full correspondence of our geopolitical interests.”
But the relationship has been changing in some remarkable ways. No longer is Russia the undisputed technological leader and ideological driving force, as it was in Soviet times, experts say.
“Now we are, at minimum, equal partners,” says Tatiana Shaumian, director of the official Center for Indian Studies in Moscow. “In fact, India has moved ahead of Russia in some vital spheres, like information technology, and now possesses the advantages that we seek. The way forward for this relationship is joint ventures, that wed our strengths in interesting new ways.”
For example, although Russian weaponry remains the biggest single item of commerce between the two countries, it’s no longer a matter of selling off-the-shelf Soviet products to an uncomplaining client.
A good part of the estimated $10 billion in new contracts to be signed this week involve products that have been developed, or enhanced, with Indian financing and Indian high-tech expertise, including India’s front-line warplane, the Sukhoi Su-30MKI, and the stunning new Russian-Indian fifth generation fighter aircraft that was unveiled in January. Maker Sukhoi announced today that it will make more than 1,000 of them within four decades.
Another example of jointly developed high tech weaponry is BrahMos, an advanced supersonic cruise missile based on an old Soviet design which is now entering large-scale service with the Indian armed forces.
Failure to deliver
Russia’s failure to deliver on some of its promises to India in recent years have caused severe embarassment for Moscow. One of the worst has been the apparent inability of Russia’s shipbuilders, for several years, to complete an $800 million contract to refurbish an old Soviet aircraft carrier, the Admiral Gorshkov, for the Indian Navy.
Putin on Friday signed a new deal to fix up the Gorshkov, now known as the Vikramaditya, which experts say carries an eye-popping, revised price tag of $2.3 billion.
“Russia has been falling behind in many sectors, while India is moving ahead,” says Oleg Malaryov, an expert with the official Institute of Oriental Studies in Moscow. “If Moscow’s capacity to develop more dynamic relations with India is stagnating, it’s due to Russia’s decline.”
India needs oil, energy
Another new feature is India’s emergence as a major investor in Russia’s petroleum industry. India’s largest single foreign gamble has been a $2.8 billion stake in the far eastern oil and gas fields of Sakhalin Island, and experts say India has been pressing Russia to open up more oilfields for investment.
One area where Russian expertise still reigns supreme is civilian nuclear energy, including new contracts to build up to 16 new civilian atomic reactors in India and other lucrative deals that may involve recycling India’s nuclear wastes through Russian storage facilities.
“Aside from nuclear technologies, it would be hard to find any area where Russia is the pre-eminent partner anymore,” says Mr. Malaryov. “The old model of relations is dead, and Putin is trying hard to find a new one.”