A win-win for India and Russia

President Putin visited India after 5 years for the Annual India-Russia summit.

The talks, as usual, ranged across a wide range of subjects. But this time there was a large delegation of Russian businessmen accompanying him. There was a clear push to expand economic and business relations. The joint statement at the conclusion of the summit, covered, as usual, a wide variety of subjects including trade and economic partnership, energy partnership, transport and connectivity, civil nuclear cooperation, military and technical cooperation, cooperation in science and technology, and tourism and people-to-people exchanges. Thus, the focus of the discussions was largely economic. Little was said explicitly about oil purchases, sanctioned by the US, but it was made amply clear that oil would continue to be purchased. There are ways around the sanctions, and India made clear that sanctions would not deter purchases.

But the reality of India-Russia trade is that it is still stuck in the old Soviet era, with the focus on government-to-government trade. Oil, arms and fertilisers, make up the bulk of the Russian exports, and account for the huge trade surplus in favour of Russia. While Indian exports are stuck in a narrow groove. Our pharmaceuticals are kept out by Russian standards, even though they easily meet US and European standards! Few consumer goods or packaged foods are exported. And our service exports are also virtually non-existent! Also, there is little mobility for professionals like doctors, nurses and accountants.

This also reflects the nature of the relationship between the peoples of the two countries. Unlike the US, UK, or the Gulf, there are very few Indians, or persons of Indian origin, living in Russia. Very few Indians think of Russia as a holiday destination. And even fewer Indians speak Russian. Even from a technology point of view, Russia, except in very few areas like space, has been left behind. In turn, Russians too look to Europe or the US, much as Indians do.

But at a political level, Russia has been a steadfast friend. That has worked well for both countries. But after Russia made up with China, after the Sino-Soviet split and border clashes in 1969, it worked for both of them, particularly post the collapse of the Soviet Union in 1991, and more so after 2001, to get together in their dealings with the US and Europe. They have even declared a ‘partnership without limits’. While Russia has helped us maintain ‘strategic autonomy’ it is not in our interest to align with them against the West.

This kind of awkward positioning has forced the Modi government not to speak out clearly against Russia for its invasion of Ukraine. Even if we had, it is very doubtful if it would have made any difference to Russia. But the Modi government is not using its relationship with Russia to even work behind the scenes for a just settlement of the war in Ukraine. The claim to be a Vishwaguru, rings hollow in our failure to play a more active role.

For the time being, both governments seem happy to separate trade from politics. And our government is seeking to open up new markets for India and achieve a greater balance in trade. Equally, Russia needs good markets too. The advantage of markets is that, once established, they outlast political changes. This can be a win-win for both countries.