A Russian Spring for India

What began as a cultural exchange between two countries soon developed into strategic cooperation and defence deals under the prevalent world order of the 1970s and then turned into a bond of friendship which lasted the test of time. This is the story of India and Russia.

Strategically, India had used Russian aid (then Soviet) to balance its strategic defence as well as deter any major threats in a then bi-polar world to its advantage. In turn, Russia emerged as the largest defence supplier to India right from the T90, Akula II and MiGs to the prevalent Sukhois and Vikramaditya benefiting the Russian defence industry.

A Su-30 MKI in full glory (Image courtesy - IANS)

With Indian Prime Minister Narendra Modi reassuring Russia to remain its largest defence partner in face of the recent deals with Airbus, Apache copters, M-777 and Chinook, it is obvious that Indo-Russian relations are strong as before despite recent breakthroughs with USA.

Post the Modi-Putin conference, the Prime Minister said, “Even if India's options have increased, Russia remains our most important defence partner... we have conducted joint military drill of the three wings in the last six months” while the Russian Foreign Minister Sergey Lavrov tweeted “We have a strategic partnership that is incomparable in content”.

Indian PM Narendra Modi with Russian President Vladimir Putin during a conference in December 2014 in New Delhi, India (Image courtesy - IANS)

In all this strategic cooperation, trade between the two countries has been often overlooked. While India preferred the USA, British Commonwealth and the Middle-East for its Exim policy, Russia became dependant on USA and Europe for the same and Indo-Russian trade didn’t pick up much. Now with the crisis in Ukraine starting to affect Russian trade, particularly its imports, the former superpower is looking at India for rescue.

“Because Russia is facing sanctions from EU and America, their (provisions) market is empty… They are looking for other partners who can supply”, EIC director S.K. Saxena said.

Russia is losing $40 billion a year due to sanctions, around $100 billion on account of falling oil prices, and some $130 billion in capital flight. It seems likely that the Russian economy is entering its second recession since 2005 and there lies the chance for India to capitalise its exports and discover newer avenues for trade.

Indian PM Narendra Modi with Russian President Vladimir Putin at a Press Conference in December 2014 in New Delhi, India (Image courtesy - IANS)

Apparently, it turns out that on the trading front, the two countries have not shared close bonds.

According to data from India’s Ministry of External Affairs, India’s exports to Russia from April to December 2014 stood at US$ 1.08 billion while the imports for the same period stood at US$ 2.35 billion. Interestingly, despite India’s Look-East preference and a series of strains between Indo-US relations, Indian exports to USA accounted for US$ 22.2 billion and imports stood at US$ 10.56 billion for the same period.

Global developments have again paved another series of engagements between Russia and India, it is time for India now for the payback it has so long spent on the strategic and defence deals with its strongest partner.

With a series of trade sanctions in place for the country, opportunities galore for the Indian export segment to the possibility of US$ 30 billion (Source – Tass). Priority areas for expanding bilateral economic cooperation are pharmaceuticals, IT, steel, diamonds, aviation, fertilizers, infrastructure, heavy engineering and food products.