Opinion | India and Russia: Seeking Stability in a Disrupted World

  • August 14, 2024
  • Posted by: Ambassador Gurjit Singh
  • Categories: India, Russia
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The resumption of the India-Russia annual dialogue after a hiatus of three years is an important inflection point. Since the Ukraine crisis, there has been a disruption in the international order, complemented by continuing Chinese aggression in the Indo-Pacific, and the Gaza crisis. In this era of disruption, India-Russia relations provide a modicum of stability.

The timing of the visit coincided with the 75th-anniversary summit of NATO in Washington, DC, an event overshadowed by the debate on Biden’s suitability as a Democratic candidate. The uncertainties in the Western world following elections in the UK, France, and the EU see India as a stable pole.

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PM Narendra Modi and Russian President Vladimir Putin have met several times over the years. In recent years, these meetings have become fewer due to the absence of the annual dialogue, Putin not attending BRICS in South Africa or the G20 in India, and Modi not going to the SCO in Astana. The bilateral engagement required direct contact to address emergent issues. The West in general, and Volodymyr Zelenskyy in particular, viewed the visit through the prism of the Ukraine crisis. For India, that is not a priority.

Nevertheless, Modi made it clear even in public comments to Putin that the battlefield is not an area for maintaining international order, and the anguish that he expressed on the death of children struck a chord. The West needs to realise that it is only Modi who can go to Moscow and say this to Putin, based on the stability of India-Russia relations.

India needs to engage with Russia because NATO tactics are pushing it closer to China. The Russia-India-China trilateral had already been derailed by China, which had adopted a more adversarial position towards India even before the Ukraine crisis. India wants Russia to hedge against China, whereas China and Russia seek to hedge against the West. This is an unequal conundrum, and the Modi visit tried to bring a semblance of balance to this relationship.

Russia and China’s warm relationship is the biggest challenge to Indian diplomacy in this context. India has not publicly criticised Russia on Ukraine, a tradition it has maintained in the past, but has conveyed its views to Russia privately. Though India and Russia have a Special and Privileged Strategic Partnership, the strategic congruence is diminishing, and in the Indo-Pacific, there is no agreement. In the joint statement, the term Indo-Pacific does not appear as the term used is the Asia Pacific at one time, and the Indian and Pacific Oceans at another.

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Besides China, there is also no congruence on Afghanistan and Pakistan. Russia has different aspirations from India. It supports India as a permanent member in a reformed UN Security Council but does precious little to reach that stage, as it is bogged down in the UN with its own problems. It cannot be forgotten that over the years, Russia was the most consistent P5 supporter of India. Currently, it hedges its bets on Chinese leads and has not adequately reciprocated Indian support and strategic autonomy.

Be that as it may, in an increasingly bipolar world, India still seeks multipolar options, and in this, both Europe and Russia are important poles, who at present are moving towards the US and China respectively.

India’s engagement with the G7 soon after Modi’s election and now with Russia is an effort to seek out multi-alignment and multipolarity. Russia’s position as a major supplier of defence equipment to India has slipped as India diversified its purchases. However, India’s new partners are reluctant to transfer technology partly because India is a repository of lots of Russian equipment. The Russian transfer of technology and joint production have been of great benefit to India and after the Modi visit, this seems like an area where expansion will take place.

The joint production of the BrahMos by India and Russia has been a significant development. Russia’s contribution to India’s energy security has increased tremendously, mainly due to Western sanctions on it. India’s refining capacities have been put to great use, using price arbitrage to export petrol, diesel and aviation fuel to different destinations. Almost a quarter of India’s diesel exports actually go to Europe now. Rather than looking down upon India’s purchases of Russian oil, India has in fact stabilised the global energy markets through its efforts.

The windfall in profits from Russian oil exports to India is timely, but it has distorted the India-Russia trade partnership which hovered around $10 billion per annum and has now leapt to $66 billion with the incremental amount being oil exports. In case there is peace in Ukraine and sanctions are lifted, this trade may suffer, therefore it is important to integrate Russian exports of oil into Indian refining and marketing capacities.

Moreover, Russia and India are now trading more than half of their value in local currencies. India has not taken adequate advantage of opportunities in sanctioned Russia to export more manufactured products. The role of the Indian private sector needs to come to the fore to grasp these opportunities as well as to seek joint ventures and investment, for which the large growth of Russian-owned rupee balances in Indian accounts could be put to use.

So far, the India-Russia economic relationship is largely government-to-government, but it needs to diversify. In many cases, Indian SMEs are operating in Russia but have little exposure to the West. Larger Indian companies involved with Western economies remain reluctant to deal with a sanctioned Russia; an alternate mechanism and interest need to be developed.

The $1 billion LOC (Line of Credit) offered during Modi’s visit to Vladivostok in 2019 remains unutilised. While the joint statement now calls for greater engagement in the Russian Far East, China is already making significant strides in the region. If India aims to counterbalance China’s influence through its partnership with Russia, it must prioritise investment, development projects, and economic interaction in the Russian Far East.

There is anticipation that mutual investment will rise to $50 billion, with some of these trade surpluses potentially being invested. Trade itself is expected to rise to $100 billion. India is seeking Russian investment in its infrastructure and industrialisation, while also expressing its readiness to invest in the Russian Far East, as highlighted in the joint statement. Greater investment in joint defence production of spares and ancillaries will be another focal point of keeping Russia engaged in India’s defence industry.

India also seeks a more independent role for Russia with the Global South, where it should engage the Indian model rather than the Chinese one. As chair of BRICS for 2024, it should help choose new members who may contribute to better serving the Global South, rather than only drawing on BRICS resources.

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Similarly, Russia’s growing engagement in Africa is sometimes problematic because it is viewed as an attempt to replace France or others in power terms, and is primarily security-oriented. India and Russia could collaborate in Africa for its development and the attainment of the SDGs. In this regard, the rupee accounts that Russia has in India from its trade surpluses could be used for Indo-Russian joint projects in Africa, which would contribute to the development of countries there. This would offer a new form of support for the Global South.

The author is a former ambassador to Germany, Indonesia, Ethiopia, ASEAN and the African Union. He tweets @AmbGurjitSingh. Views expressed in the above piece are personal and solely that of the author.



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