Issues in defence Cooperation
- Russia still commands 58% of total arms imports by India, followed by Israel and the US at 15 and 12%, respectively. This figure, however, is a step down from 2010-14 when Russia had a share of 70%of Indian defence market.
- India desires to diversify its defence imports and therefore a heightened competition for Russia with other suppliers.
- Dissatisfaction in India with post-sales services and maintenance being offered by Russia.
- Cost escalation because of the delays in supply is another concern.
- High cost and low quality of spare parts for weaponry imported from Russia.
- Threat of US’ CAATSA law sanctions pose a concern.
Changing nature of defence ties
- Biggest change in India’s foreign policy has been its increasing alignment with USA.
- Indian Navy along with that of Japan, US and Australia undertakes Malabar naval exercise in western Pacific.
- Formation of Quad.
- India has already inked three foundational agreements with USA, which open a wide opportunity for cooperation in security, defence, intelligence, and big tech.
- However, despite all hiccups and tensions between India and Russia, the two countries have signed defence deals worth $15 billion in the last three years.
- All these deals have happened despite US sanctions and India’s arms imports witnessing a 33% drop in the last five years, with sales from Russia being hit the hardest.
- This comes at a time when the deals with the US since 2018 was less than $5 billion.
Way forward for defence ties
- Both IAF and Indian Navy have slowly moved their missile dependence on Russia to other countries, especially the French and Israel besides the indigenous technology.
- One service where Russians continue to have a stake currently and possibly into the future as well is Army.
- The other sector where Russians will continue to have a strong hold is India’s strategic program, which becomes binding factor for many other deals that India signs.
- But growing India-French ties may just be able to offset it.
- Another factor that will come into play in the future and possibly desist India from putting in the Russian crate is the increasing ties between Russia and China.
- Russia has emerged as one of the principal suppliers of defence equipment and technology to China, a development that India is not really happy about.
Economic Relations
- Economic Mechanism - Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC)
- Bilateral trade is not much significant - from April 2020-March 2021 amounted USD 8.1 billion. Indian exports amounted USD 2.6 billion while imports from Russia amounted USD 5.48 billion.
Issues in Economic relations
- There is deficit in trade in favor of Russia.
- Reason for lack of growth of trade relations:
- Lack of involvement of the private sector
- Absence of logistics
- Poor connectivity
- stalling of the International North-South Economic Corridor, resulting in higher costs.
- Indo-Russia energy sector has in recent years seen increased cooperation through two-way investment. However, difficulties involved in direct supply through pipelines remain.
- Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field.
- The two-way investment target set at $50 billion by 2025.
- Looking for alternative routes to deal with the logistics issue, India has indicated its intent to establish a shipping corridor from Chennai to Vladivostok, which would reduce the time for goods to be shipped to the Russian Far East.
Changing geopolitics & IMPLICATIONS on relationship
- Ukraine War: India abstained from Voting at the UNSC resolution against Russia. However, Russia’s tilt towards China is a cause of concern for India. On the other hand, US wanted India to comply with the sanctions and take a clear stand on Russian aggression. Although these decisions are seen in the context of India’s stated policy of Strategic Autonomy, it might impact India’s alignment with US against China in the Indo-Pacific.
- India’s increasing alignment with the US: India is aligning with US in the Quad in the Indo-Pacific strategy. Russia is increasingly wary of NATO’s eastward extension till its borders.
- Russia’ view of Quad: Russia views Quad as an ‘Asian NATO’ and has compared it with ‘Cold War’ era tactics. Russia thinks that Quad and Indo – Pacific conception is primarily an American initiative designed to contain both China and Russia.
- Russia – China bonhomie: Russia and China have convergence over anti-American foreign policy and share a vision for a multi-polar world. Russia’s
- economy critically depends on oil & gas exports. China being the largest importer of oil & gas is a big market for Russia’s exports. Russia supports Belt & Road initiative.
- Defence and energy exports to China: Close to 77% of China’s arms imports came from Russia during 2016- 20. China is a major and large buyer of Russia’s oil & gas. This has deepened economic relations between both.
- Arctic Geo-politics: Cooperation on the Arctic where both Russia and China seek to develop sea lines for shorter trade routes. China is particularly interested in this as it will reduce its vulnerability on Strait of Malacca.
- Deepening of Russia & Pakistan Relations: It is facilitated by China-Pak axis, Russia sees Pakistan as a zipper state, cooperation is increasing on energy sector and on Afghanistan issue.
Way Forward
- Russian preoccupation with Russia’s ‘status’ rivalry with U.S has impacted Russia's view of India-China relations.
- India should pursue normalisation of relations between US & Russia, while diminishing Russia's propensity to coordinate its South Asian policies with China.
- Russia might not always be the most powerful player, but it retains significant capacity to act both as a spoiler and a facilitator in Eurasia and has seen a resurgence of influence in West Asia.
- India and Russia will continue to pursue their respective trajectories in world affairs, coordination on mutually beneficial issues will be vital in this period of flux in the global system.
- After Taliban’s takeover, leveraging relations with Russia can be a key strategy for India in Afghanistan. Example: NSA talks between India, Russia, Central Asian republics etc.
- There is a need for improving Economic cooperation – Improving logistics – FTA with EAEU etc.
Besides defence cooperation should be nurtured on the lines of joint development and technology transfer and indigenisation.
India – Russia Martime Cooperation
- Maritime cooperation is emerging is one of the important pillars of India’s Foreign policy. In this context,
- India-Russia cooperation is crucial to India’s interest owing to strategic relationship with Russia.
India Ocean region
- India’s central position in the northern IOR bestows upon it a unique role.
- Russia is the only major power without a permanent presence in the IOR. However, Russia’s inclusion as a dialogue partner of the Indian Ocean Rim Association (IORA) suggests the implicit acceptance of its important role in the evolving geopolitics of the Indian Ocean
- Russia plays an active role in anti-piracy operations off the coast of Somalia. It is setting up naval base in Sudan. The geographical centrality of Sudan vis-à-vis the Red Sea and adjacent areas provide Russia with the potential capacity to control several choke points and focal areas like Suez Canal (also from Tartus), Red Sea, Bab al-Mandab Strait, and Gulf of Aden
- India has signed military logistics agreements with all QUAD countries, as well as with France, Singapore and South Korea.
- Russia and India are set to sign the Reciprocal Exchange of Logistics Agreement (RELOS).
- However, Russia has criticized the Quad grouping of which India is a member. Further the growing alignment between Russia and China because of Ukraine war brings tough choices for India.
- India’s primary supplier in the maritime domain, the operational interaction between the navies of the two countries is comparatively on a lower scale.
Russian Arctic and far East and its importance for India
- In many ways, Arctic is to Russia, what Indian Ocean is to India.
- Half of the Arctic in terms of its area, coastline, population, mineral wealth and hydrocarbons lies in Russia.
- India has scientific, environmental, commercial and strategic interests in the Arctic region and Russian Arctic can potentially address India’s energy security objectives.
- Oil and Gas trade between India and Russia remains significantly low, despite Russia being the world’s third largest producer and India being the third largest consumer.
Importance of Russian Arctic and Far East
- Hydrocarbons - Russia has the largest proven natural gas reserves in the world, enough to last for about 80 years at current production rates.
- By 2050, the deposits in the Arctic shelf are expected to provide between 20 and 30% of Russia’s total oil production
- Strategic Minerals - The Russian Arctic also has vast deposits of cobalt, copper, diamonds, gold, iron, nickel, platinum, high-value rare earth elements, titanium, vanadium and zirconium. For India, Most of the rare earth products used in strategic industries viz. defence, fiber optic communications, space and nuclear energy are also critical to various clean energy technologies, including wind turbines and electric vehicles
- Russian far East - The Russian Far East or RFE is rich in natural resources, producing 98% of Russian diamonds, 90% of borax materials, 50% of gold, 14% of tungsten, and 40% of fish and seafood. About one-third of all coal reserves and hydro-engineering resources of the country are available here.
Indian Initiatives
- India has been collaborating with Russia in the Far East as was witnessed during the Prime Minister’s visit in 2019. PM announced a US$ 1 billion line of credit to further contribute to the development of RFE.
- Both countries have stated that Chennai–Vladivostok Maritime Corridor along with International North–South Transport Corridor (INSTC) will bring India and Russia closer to each other.
- Chennai–Vladivostok Maritime Corridor would reduce transport time from present 23 days from Baltic Sea route to 15-16 days via the new route.
- India has proposed inclusion of Chabahar Port in INSTC and is seeking to expand membership of the project.
Way forward
- Russian opposition to the Indo-Pacific and the QUAD as a containment strategy needs to be dispelled through greater interaction and explanation of India’s Security and Growth for All in the Region (SAGAR) and an open and inclusive Indo-Pacific. India can also consider facilitating Russian access to the IOR.
- Though the Middle East remains India’s most viable choice for energy imports, emerging geopolitics and shifting traditional alliances compels India to diversify its partners. Russia, with its abundant energy resources, coupled with the exit of Western oil companies from its energy projects, offers tremendous opportunity for India.