India has been awkward in its relationship with Russia ever since the collapse of the Soviet Union and India?s embrace of market economics. It remains an oddity of our times that Indo-Russian relations, thick for decades together, have been ebbing away considerably faster than warranted by the shadow cast by the development of new ties with the US and Israel. Yet, the evidence is stark. The steady decline in the share of India?s trade with Russia, from close to a tenth in the late 1980s to less than 1% now, speaks volumes of how rapidly its presence has shrunk on India?s radar. Of course, trade was only one part of a composite package. The relationship with Russia was forged on close cooperation in defence, economic planning and some heavy industries, and while the rough patch it went through after the Soviet Union?s disintegration snapped the economic cooperation, it has remained India?s primary supplier of defence equipment. Now that the Russian economy has roared back on the strength of gushing oil & gas revenues, the lost Indo-Russian bonhomie may not be possible to recover, but pragmatism would still call for a restoration of relations to the extent that they are of clear mutual benefit.
One area that offers high potential is the oil & gas sector, in which Russia?s attractions have grown enormously. Recent numbers show that Russia has 6.6% of the world?s oil reserves, with just four countries (all Opec) with larger shares. Gas offers even brighter prospects, since Russia has the largest reserves, a quarter of the entire world?s. Though ONGC Videsh has made a beginning by investing in a one-fifth stake of the Sakhalin-1 field, this was not followed with equal gusto in other fields opened up later for foreign investment. China and Korea, meanwhile, are cosying up to Russia for its energy reserves. Rusiya Petroleum, Korea Gas Corp and China National Petroleum Company have jointly announced a pipeline to supply vast quantities of gas to China, Korea and the countries enroute. A new eastern oil pipeline is also being considered to connect the Russian city of Angarsk to Asian markets. India would waste a valuable opportunity if it does not use its decades-old relations to enter the fray. Russia wants to make the most of its proximity to Asia, and all Asian economies should respond.
