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What To Expect From PM Modi’s Russia Visit

 

Maritime prospects from Chennai to Vladivostok may seem an odd choice for two governments but India and Russia are exploring precisely that. And it may not be as odd as it appears. Chennai on India’s east coast meshes perfectly with India’s Act East policy. And since India sees the Indo-Pacific as a seamless whole, stretching from the west coast of Africa to Vladivostok in Russia’s resource rich Far East, clearly the stage is being set for a whole new Indo-Russian dynamic.

That dynamic, until now, has largely been confined to the sale and purchase of armaments and some cooperation in energy, chiefly oil/gas and of course nuclear power. But it doesn’t add up to much, around $11 billion in bilateral trade, laughable considering the size of the two countries. It may have even accounted, in some quarters, to a sense of “drift” in the bilateral relationship. Others argue that the “drift” was only a perception and both sides have been working quietly behind the scenes to give more teeth to the relationship.

On Wednesday Modi arrived in Vladivostok, his first visit to that region, with two agendas: the annual bilateral summit with President Vladimir Putin and to deliver the keynote address (as chief guest) at the Eastern Economic Forum in the city on Thursday.

So what can one expect from Vladivostok? It’s clear that one driving force is the determination to increase the bilateral trade to $30 billion in about five years. Is it doable at a time of trade war and worldwide downturn in financial markets?

Sources in government and industry admit it’s a tough call but the political and economic imperatives cannot be ignored. Modi’s presence in Vladivostok is a reminder to the world (read U.S.) that India cannot be expected to abandon old friends and partners and fall in line with Washington’s diktats. Then again, India may have escaped major damage from Trump’s trade war against China for now but there’s no telling what could happen tomorrow.

Leaving the political aside, there are sound economic reasons to invest in Russia’s Far East. For one, it is resource rich with vast quantities of coal, metallurgical ore which is ideal for making steel, rare earths and minerals and diamonds. An Indian company KGK Diamonds set up shop in Vladivostok some years ago and runs a cutting and polishing unit, employing some local and Indian labour.

But with Russia keen on opening up Siberia’s vast wilderness for mining, agriculture and forestry, there are opportunities for Indian companies to invest and jobs for skilled Indian labour. Commerce Minister Piyush Goyal recently led a delegation that included five Indian chief ministers and dozens of Indian companies to explore business prospects there.

The forum will also provide opportunities to explore Russia’s thinking on opening up oil and gas exploration in the Arctic. Indian energy majors are already invested in Russia’s oil industry and would be keen to enter new fields. India’s Foreign Secretary Vijay Gokhale referred to the prospects of a Russian oil pipeline running all the way to India but there are logistical issues (notably the pipeline will have to traverse Pakistan). But India’s intentions are clear: diversify energy sources to reduce the crippling dependence on Arab oil.

Still with energy, there could be some discussion on civil nuclear power but sources indicated that since the third and fourth reactors at Kudankulam in Tamil Nadu are under construction, the focus would be more on technology transfer and make in India. The Kudankulam site can accommodate two more reactors, making it six. Thereafter, discussions could commence on six more reactors the Russians are keen to build in India, but as yet there is no hint of where these could be located although Andhra Pradesh has been mentioned in the past.

The bilateral summit is expected to yield a clutch of agreements in areas such as pharmaceuticals, investments, industrial cooperation and connectivity. The last covers a Russian study using satellites, of a rail corridor in northern India. The study has implications for increasing the speed of trains and related upgrades.

Defence talks may focus on Russia’s keenness to conclude the agreement on the Kamov 226T helicopter to replace the IAF’s ageing Chetak and Cheetah helicopters. The Russians have also offered a diesel-electric submarine for India’s Project 75-I. Modi’s visit to a local shipyard may be linked to this and other proposals the Russians may have.

On a final note, regional issues are likely to figure including Afghanistan where India and Russia may not be on the same page. The U.S. anxiety to withdraw its troops at the earliest could lead to chaos and bloodletting. With Russia largely excluded from the U.S.-Taliban dialogue and India also on the fringes, Afghanistan presents a grim scenario.

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