Why BRICS summit 2016 is a game-changer for India-Russia ties

The proof of the pudding is in bold print in the many defence and trade agreements signed between the two countries.

 |  6-minute read |   15-10-2016
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Prime Minister Narendra Modi said Russia remains the nation’s most important defence partner, while Russian president Vladimir Putin, who is on a two-day visit to Delhi, pledged full support to old friend India in the areas of defence and bilateral trade.

Russia's clear stand on the need to combat terrorism mirrors our own. We deeply appreciate Russia's understanding and support of our actions to fight cross-border terrorism, which threatens our entire region, said Modi.

The Russian president, on his part, said that New Delhi and Moscow enjoy close cooperation in fighting terrorism.Modi said both he and Putin noted the similarity of views on the situation in Afghanistan and turmoil in West Asia.

putin-modi-china_101516081209.jpg India has raised with Russia the issue of the latter's participation in a joint military exercise with Pakistan days after the Uri attack.

On the trade front, PM Modi said both countries continue to expand, diversify and deepen economic engagement. Businesses and industry between our two countries are connected more deeply today. Trade and investment ties are on the upswing. And, with president Putin's backing, we hope to fast track India's association with Eurasian Economic Union Free Trade Agreement, Modi said.

India and Russia signed several major agreements, including two key defence deals following a bilateral meeting between Prime Minister Narendra Modi and Russian President Vladimir Putin on the sidelines of the 8th BRICS summit in Goa.

After their nearly two-hour long talks, which began with a warm handshake this morning, the two leaders witnessed the signing of a Rs 39,000 crore defence deal to procure Moscow's most advanced anti-aircraft defence system — S 400 Triumph, which will provide India a ballistic missile shield.

In another key deal that is being seen as a huge boost for the Modi government's Make in India initiative, India will initially import and then manufacture Russian Ka-226 T light utility helicopters. India and Russia will also collaborate to jointly manufacture four state of art Admiral Grigorovich-class (Project 11356) guided-missile stealth frigates.

Even as India’s options have increased today, Russia will remain our most important defence partner, Modi said. The two leaders discussed how to align our defence relations, he added. The PM stated that the importance of this relationship and its unique relations in India’s foreign policy will not change.

They also lay the foundations for deeper defence and economic ties for the years ahead. The agreements on manufacturing of Kamov 226T helicopters; constructions of frigates; and acquisition and building of other defence platforms are in synergy with India's technology and security priorities, the PM said.

India is the world's top defence importer and is undergoing a $100-billion upgrade of its mostly Soviet-era military equipment. India was the erstwhile Soviet Union's closest military ally during the Cold War and a major importer of its military hardware. But in the recent years, Delhi has turned to the United States for supplies, as the two nations forge stronger ties.

Moscow-based OAO Rosneft signed a preliminary agreement to ship by sea as much as 10 million tonnes of oil per year to India’s Essar Group, Rosneft chairman Igor Ivanovich Sechin told reporters in New Delhi.

Russia has sought new markets for its oil and natural gas as the nation’s deteriorating relations with the US and Europe amid the Ukraine conflict prod it toward a recession. Gas exporter OAO Gazprom reached a $400 billion deal with China in May to build a pipeline and start supplies after more than a decade of talks.

The two countries have also agreed to conduct an annual military conference. PM Modi said the "highly productive" outcomes of the meeting clearly establish the special and privileged nature of strategic partnership between the two countries.Analysts suggest that India's big Russian push once again should also be seen in the context of the recent joint military exercises that Russia had with the Pakistani forces.

A joint venture to build Russian Kamov helicopters in India. The plan is to build at least 200 helicopters that the defence forces need, and is part of Modi's drive to build a defence industrial base in India. The two countries have signed a joint agreement on shipbuilding and specialist training in Andhra Pradesh.

The two leaders also dedicated the unit two of Kudankulum nuclear power plant and witnessed the foundation laying of its Unit 3 Modi said the dedication of Kudankulum 2 and laying of foundation concrete were examples of tangible results of India-Russia cooperation in the field.

India has raised with Russia the issue of the latter's participation in a joint military exercise with Pakistan days after the Uri attack in which Pakistani terrorists killed 19 Indian soldiers.

India is likely to insist on the strong condemnation of international terrorism, if not cross-border terrorism, at the BRICS summit.Putin said BRICS is determined to fight the menace. For our five countries' leaders, this meeting (in Goa) will be a good opportunity to harmonise our positions on key issues on the international agenda.

We are determined to cooperate in the fight against terrorism, drug trafficking and corruption, Putin said. Announcements were also made to boost ties in sectors like trade and investment, hydrocarbons, space and smart cities — Modi said this will help advanced infrastructure partnership.

Both nations agreed to a zero tolerance policy towards terrorism and the setting up of a science and technology commission. Other important agreements include:

  1. A memorandum of understanding to develop transport logistics system
  2. An agreement on education and training
  3. An MoU on urban development and smart city projects
  4. A pact on cooperation between Indian and Russian railways
  5. Space cooperation between Russian space Corporation and ISRO

Reading out a statement to the media in the presence of Putin, the prime minister appreciated Russia's understanding and support of India's actions to fight cross-border terrorism, an obliquely referring to India's surgical strike across the LoC targeting terror launch pads. Modi said the success of the India-Russia bilateral summit has brought the abiding strength of India-Russia strategic partnership into the spotlight.

It also highlights our strong convergence of views and positions on pressing international and regional issues, he added. We also agreed to work closely to respond to the challenges posed by the unsettled nature of the global economic and financial markets. Our close collaboration at the United Nations, BRICS, East Asia Summit, G-20 and Shanghai Cooperation Organisation makes our partnership truly global, both in its scope and coverage, the PM added.

The proof of the pudding is in bold print in the many defence and trade agreements signed between the two countries in the past two days. It infuses a new spirit and a great thrust that India needs at this important moment in the history of its reform and development.


K Srinivasan K Srinivasan @krishsri59

The author is a GST reader and writes on macroeconomics and indirect tax laws.

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