India-Russia Summit

India Needs To Manage Ties With U.S. And Russia Without Friction

P.S. Raghavan New Delhi, India 7 October 2018

The recent India-Russia summit (Oct 4-5) was the 19th summit, sustaining an unbroken annual sequence since 2000. President Putin, who is vilified in much of the Western world as the epitome of evil, has participated in 15 of them and has played a pivotal role in sustaining the bilateral strategic partnership, a fact that Prime Minister Modi publicly acknowledged (as have other Indian prime ministers before him). The summit was in the backdrop of extraordinary pressure on India from the United States to contract its defence cooperation with Russia.

For some years now, there has been a perception in both India and Russia that the strategic partnership is in a state of drift, as a consequence of India’s strengthening strategic partnership with the United States, sharpening friction between U.S. and Russia and closer Russia-China relations. The leaders of the two countries have consciously striven to dispel this perception and have worked to strengthen the bilateral cooperation by broad-basing it. It is fair to say, however, that the perception of drift keeps recurring, partly also because there is not adequate follow-up on both sides of important decisions taken at the leadership level.

The unpredictability of U.S. foreign policy since the advent of President Trump has created new geopolitical uncertainties, which have caused nations to reassess their international relationships. The “reset” in India-China relations signalled by Prime Minister Modi’s visit to Wuhan in April this year, was an outcome of such reassessment. Developments in inter-Korean relations, relations between Japan and China, between China and Russia and other major power relations have undergone subtle (and some not so subtle) transformations. This was the backdrop of Prime Minister Modi’s visit to Sochi for an informal summit with President Putin in May this year, when the two leaders reemphasised the continued (even heightened) relevance of the India-Russia strategic partnership in the current geopolitical flux.

The progressive worsening of U.S.-Russia relations and activation of the U.S. sanctions legislation, Countering America’s Adversaries Through Sanctions Act (CAATSA), have increased U.S. pressure on India-Russia defence cooperation. CAATSA empowers the U.S. executive to impose sanctions on foreign entities that enter into any “significant” defence transactions with Russia. India’s proposed acquisition of the state-of-the-art S-400 air defence system, which would naturally be classified as a “significant” acquisition, became a principal focus of U.S. attention, with senior State Department officials warning publicly that India could be subject to CAATSA if it went ahead with the S-400 deal. India had, in high-level consultations with the U.S. preceding the Putin visit, sensitised senior U.S. officials of the importance of the system for its defence preparedness, but this did not perceptibly dilute public U.S. opposition to the S-400 acquisition.

In the event, the state of India-Russia relations and, specifically, the status of the S-400 acquisition, were under close scrutiny at the Summit.

The cordiality between the two leaders, which was demonstrated at their Sochi meeting, was again in evidence in Delhi. They had a tete-a-tete for over three hours at a private dinner hosted by the Indian PM on October 4. In their public utterances, both leaders emphasised the relevance of the strategic partnership and their commitment to broaden the canvas of cooperation.

Notwithstanding the external pressure, the S-400 deal was concluded at the summit. It was done in a low-key manner, with the agreement being signed before the leaders’ bilateral meeting and out of the glare of cameras. The two leaders did not mention it in their press statements and there was only a one sentence affirmation of the agreement in the joint statement. Other defence cooperation projects under discussion—the Kamov helicopter, frigates, assault rifles and others—were apparently deferred to the Intergovernmental Commission for Military Technical Cooperation at Defence Ministers’ level to be held in December. Nevertheless, it was a strong statement of India’s determination to take autonomous decisions on its defence needs.

It has often been pointed out that the India-Russia partnership is sustained mainly by the defence pillar. Since 2014, the effort has been to build and strengthen other pillars. The energy pillar—including hydrocarbons and nuclear—has developed nicely. PM Modi’s press statement and the bilateral joint statement indicate that actions are under way to further strengthen it. Indian investments in oil and gas fields in Siberia have grown to about $10 billion in recent years. Russia’s investment of nearly $13 billion in acquisition of Essar Oil’s refinery and port is India’s largest inward investment and Russia’s largest foreign investment. Newer investments are now being contemplated, both in the Russian Far East and in the Arctic region. Imports of LNG and oil from Russia are on the upswing. Nuclear energy is another area of ongoing cooperation: two 1000 MW units have been built in Kudankulam (Tamil Nadu) with Russian collaboration, two more are under construction and the plan is for another eight to be constructed in two decades.

The joint statement lists out a wide range of economic priority projects—in mining, metallurgy, pharmaceuticals, chemicals, railways, infrastructure, aviation and space, among others. Russia will extend capacity building support for India’s manned space missions. Trade has shown an encouraging uptick, rising to about $10 billion in 2017, with a further increase of 20 per cent this year. Investments have also risen, mainly due to hydrocarbons investments. It has been agreed to open a single window clearance mechanism to further promote Russian investments in India.

The joint statement noted continued commitment to the ongoing talks between India and the Eurasian Economic Union (EaEU—Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia) for a Free Trade Agreement. It also reiterated that the two countries will work with Iran to activate the International North South Transport Corridor—the multimodal trade corridor from India’s west coast to Iran and onwards in three spurs to Afghanistan, Central Asia and to Russia and northern Europe. This project that has been discussed since the early 2000s, was shelved for a few years when Iran was under UN sanctions, and again revived after the 2015 international nuclear deal with Iran provided for the lifting of sanctions. The activation of this trade corridor can be a game-changer for India’s economic and strategic interests, since it cuts time and cost for transport of goods by roughly half of that by the circuitous sea route to Europe through the Suez Canal. With fresh U.S. sanctions on Iran, progressing this project will require imaginative strategies.

Such was the public focus on the S-400 that little attention was given to how the two leaders dealt with the “wrinkles” in the relationship that frequently find mention—from an Indian perspective, Russia’s relations with Pakistan, its dalliance with the Taliban in Afghanistan and its ever-intensifying strategic partnership with China; from the Russian perspective, India’s strengthening defence cooperation and strategic linkages with the U.S., as well as its initiatives on the Indo-Pacific. Prime Minister Modi summed up the discussions on these issues in a few crisp sentences, indicating that all international issues of mutual interest had been discussed between him and President Putin. Among the areas in which he said the two countries have common interests are Afghanistan, terrorism and the Indo-Pacific. On all these issues, frank discussions in Sochi had already cleared the air, with Indian and Russian leaders conveying to each other that they would not threaten the core interests of each other.

Russia’s political, economic and defence links with Pakistan (which Pakistan likes to flaunt to heighten Indian discomfiture) have multiple motivations, flowing from its acrimonious standoff with the U.S. and today’s global geopolitical flux. The Russian defence establishment signals that arms transfers to Pakistan are not on the anvil. It is worth noticing that the joint statement refers specifically to cross-border terrorism, which the last two joint statements did not do.

On Afghanistan, the joint statement expresses Indian support for Russia’s political initiative—the “Moscow format”, which seeks to involve regional countries and major powers in an effort to draw the Taliban into negotiations with the Afghan leadership. The U.S. accuses Russia of aiding the Taliban and has boycotted its initiative. At the same time, the U.S. has initiated its own dialogue with the Taliban; the U.S. Special Representative for Afghanistan Reconciliation Zalmay Khalilzad is right now on a tour of Afghanistan, Pakistan, the UAE, Qatar and Saudi Arabia, seeking (according to the State Department) “to coordinate efforts to bring the Taliban to the negotiating table”. It may be noted that Ambassador Khalilzad’s mission does not bring him to India.

Indian concerns about Russia’s relations with China and Russian concerns about India’s relations with the U.S. would certainly have been discussed at the one-to-one and restricted meetings, but there was predictably no public word on them; relations with third countries are normally not mentioned in bilateral statements, except in extreme cases.

The 19th India-Russia summit was the first that was impacted overtly by India’s relations with a third country (the United States). Though India asserted its strategic autonomy in the case of the S-400, the Damocles sword of CAATSA will continue to hover over India-Russia defence cooperation (and even other cooperation). Our negotiations with U.S. have to continue to emphasise that our autonomy of decision-making vis-a-vis Russia is also important for the quality of the India-U.S. strategic partnership, which is of great importance to India. Indian diplomacy has to strive to manage both partnerships without friction.

(P.S. Raghavan is a former diplomat, now Convenor of the National Security Advisory Board. The views expressed are personal.)

3 Comments

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  • Very happy to see SNI is settling down fast & started presenting substantial scoops well ahead of the print & conventional electronic media. Congratulations.
    Chairman NSAB’s statement gives a mature extensive coverage of the current India / RF relationship.

  • India needs hydrocarbon cooperation with Russia because of India’s ever growing needs and the yawning gap between demand and domestic production. But the hydrocarbon needs being being filled by Russia is not a distinct reality due to geographical locatoof the two counties. However Indian needs of hydrocarbons needs can be indirectly be met when Indian hydrocarbon companies invest heavily in Russian hydrocarbon sector.

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