Publication: Eurasia Daily Monitor Volume: 1 Issue: 129

On December 3-4 Russian President Vladimir Putin will hold a summit with Indian Prime Minister Manmohan Singh. Foreign Minister Sergei Lavrov has already gone to India to lay the groundwork for this summit (Itar-Tass, October 9). Putin’s agenda in India comprises security and economics.

Although India is Russia’s long-standing partner, many in Moscow still pursue former Prime Minister Evgeny Primakov’s 1998 idea of a strategic triangle with India and China (Itar-Tass, September 24). This triangle’s purpose is to build the multi-polar world each of these states claims to want but has not yet achieved. It would also allegedly strengthen the UN Security Council to which India now seeks entry, and thus restrain American power. Finally it would also buttress Russia’s position in Central Asia. Yet to date no triangle has emerged. Indo-Chinese mutual suspicion, China’s aversion to alliances, each state’s desire for a close working relationship with the United States, and the fact that Russia has little to offer in tangible, material terms to them beyond what they already receive have impeded formation of this triangle.

Nevertheless Russia continues to be a major supplier of weapons to India. Moscow will supply India with SU-30 MKI fighters for its aircraft carrier on top of the earlier deliveries of SU-30K and 22 SU-30 MKI fighters (Itar-Tass, September 17). Russia is also selling jet engines for Indian jet trainers and training Indian nuclear scientists (The Hindu, November 14; Itar-Tass, November 5). Russia also conducts a robust dialogue with India regarding the war on terrorism, Afghan reconstruction, nonproliferation, Iraq, and Gulf security (Itar-Tass, October 5). Indian officials, like their Russian partners, take a strong rhetorical stance against “double standards” in regard to terrorism (RIA-Novosti, October 5; Press Trust of India, October 7). Foreign Minister Lavrov also spoke encouragingly about India’s chances for joining the G8 (RIA-Novosti,, October 8).

However, economic issues are increasingly dominating the bilateral agenda and hindering the full development of the partnership. Russia wants greater coordination with India regarding the World Trade Organization and asked New Delhi to ease its anti-dumping and visa norms before Putin’s visit. Although both sides share the same conceptual approach, the current level of their cooperation in the WTO talks remains unsatisfactory and Moscow wants that to change. Moscow also is upset that only 1.5% of each country’s trade is with each other or that India does not yet recognize Russia as a market economy (Press Trust of India, October 9; Asia Pulse, October 11). Russian officials are therefore striving mightily to increase trade and investment since economic cooperation “is an important component of [the] strategic partnership between Russia and India” (Itar-Tass, October 9).

Lavrov wants bilateral trade to go beyond its current focus on primary goods. He and the Russian government want to stimulate opportunities for Russian firms to invest in prospecting for, producing, and transporting hydrocarbons, as well as construction and modernization of thermal, hydropower, and nuclear power plants, space projects, road construction, biotechnology, information, and communications technology (RIA-Novosti, October 9). India, however, seeks to ease its energy supply problems by acquiring equity stakes in more Russian oil and gas fields, including some of those belonging to Yuganskneftgaz, a Yukos subsidiary, and Sakhalin-3, besides its present holdings in the Sakhalin-1 field (Asia Pulse, October 27; AP, November 14).

Reports from New Delhi say that during the summit India will announce a $3 billion Indian investment in Sakhalin-3 and the joint Russian-Kazakh Kurmangazy oil field in the Caspian. Thus India’s Energy Minister, Mani Shankar Aiyar, has stated, “What I am talking about is the strategic alliance with Russia in energy security, which is becoming for India at least as important as our national security” (The Hindu, November 14). Similarly, Indian ambassador Kanwal Sibal has stated that India wants to invest in Russian oil fields and move beyond importing Russian military technology and equipment to participating in joint studies and development of new technologies (RIA-Novosti, November 5).

This asymmetry in objectives underscores Russia’s concerns in approaching Asian governments, not just India. Despite significant economic progress under Putin, Russia remains a marginal economic player in Asia outside the energy sector. While India is investing large sums in this sector, Russia has still to prove itself a fully competent or reliable partner who can send large quantities of energy to their customers. Meanwhile it remains uncompetitive in trade and investment in other sectors, even where it might seem to enjoy a comparative advantage.

Strategic partnerships to address major issues in contemporary international affairs will continue to diminish without a corresponding economic base for partnership with countries like India. Good will, cooperation against terrorism, and arms sales reflect the legacies of the past, but do not necessarily build a basis for a strong relationship in the future, especially as India has increasing opportunities to go elsewhere to get the same benefits, often with higher quality. Indeed, as India ‘s capacities for indigenous production or for attracting other exporters grow, Russia’s role as supplier will diminish. Rosoboroneksport has already announced that arms sales in 2005 are expected to decline 13% to $5 billion, hardly an encouraging sign (Moscow Times, November 9). While Indo-Russian relations will certainly not become antagonistic, their future quality remains an open question, especially if the status quo does not change dramatically soon.