Prime Minister Manmohan Singh visited Russia in December. Now, the Russian PM Vladimir Putin is visiting India. High-level exchanges of this sort have become a regular feature for the two countries. To what extent are India and Russia just trying to bolster traditional ties and to what extent are they succeeding in fashioning novel ones? Putin is expected to sign over a dozen agreements amounting to around $10 billion during his visit. Many of these are in the conventionally core area of Indo-Russian cooperation?defence. Whether it is the refitted Soviet-era aircraft carrier Admiral Gorshkov or new MiG acquisitions, there is an air of familiarity in this sector. Even the drawbacks of Russian supplies?like delayed deliveries at escalated costs and inadequate product support?hold no surprises for New Delhi. But with the US, France, Israel and others aggressively competing for the Indian defence pie, Russians can?t afford to take it for granted anymore. Beyond explicitly defence offerings, they continue to offer support in other strategic areas?for example, by offering India additional nuclear reactors. But in contrast to all the ways in which the modern sectors of the Indian economy have increased synergies with the West since liberalisation, the Indo-Russian relationship just hasn?t thrived. There are, however, some signs now that it is beginning to enter a more dynamic territory.
Take telecom. Putin has pledged state financial aid for the Indian telecom unit of Russian conglomerate Sistema, which is looking to expand in India. Take banking?where the Commercial Bank of India has presence in Russia and Russia?s VTB branch has presence in India?where Putin has spoken about a legal foundation to enhance cooperation. Take tourism, where there is enormous scope for growth in bilateral exchanges and the governments are beginning to recognise this. Take gems and jewellery. The Russian state-run company Alrosa overtook De Beers last year as the world?s biggest diamond producer while India is the world?s second-largest consumer of jewellery and polished diamonds after the US. Mutual interest is growing, with Alrosa selling more than $500 million of diamonds here last year as compared to $250 million in 2008. But the most important development?we are back in strategic Indian territory now?to watch out for are obviously taking place on the energy front. ONGC is in discussions with Gazprom and Roseft over taking equity stakes in oil and gas projects in Russia, whether these are in Siberia or north Russia. And given that government-to-government contacts are key when it comes to tapping Russia?s vast hydrocarbon reserves, India needs to keep leaning on Putin and his cohorts.
