Old Friend New Relations: Indo-Russia Relation in 21st Century

Old Friend New Relations: Indo-Russia Relation in 21st Century

Chapter - IIntroduction Indo-Russo relations refer to the bilateral relations between the Republic of India and the Russian Federation. During the Cold War, India and the Soviet Union (USSR) enjoyed a strong strategic, military, economic and diplomatic relationship. After the collapse of the USSR, Russia inherited the close relationship with India, even as India improved its relations with the West after the end of the Cold War.Traditionally, the Indo-Russian strategic partnership has been built on five major components: politics, defence, civil nuclear energy, anti-terrorism co-operation and space. These five major components were highlighted in a speech given by the Indian Foreign Secretary Ranjan Mathai in Russia. However, in recent years a sixth component, economic, has grown in importance with both countries setting a target for US$20 billion in bilateral trade by 2015. In order to facilitate this target both countries are looking to develop a free trade agreement. Bilateral trade between both countries in 2012 grew by over 24%.The powerful IRIGC is the main body that conducts affairs at the governmental level between both countries. Both countries are members of many international bodies where they jointly collaborate closely on matters of shared national interest. Important examples include the UN, BRICS, G20 and SCO where India has observer status and has been asked by Russia to become a full member. Russia has stated publicly that it supports India receiving a permanent seat on the United Nations Security Council. In addition, Russia has expressed interest in joining SAARC with observer status in which India is a founding member. India is the second largest market for the Russian defence industry. In 2004, more than 70% of the Indian Military's hardware came from Russia, making Russia the chief supplier of defence equipment. India has an embassy in Moscow and two consulates-general (in Saint Petersburg and Vladivostok). Russia has an embassy in New Delhi and four consulates-general (in Chennai, Hyderabad, Kolkata, Mumbai).According to a 2013 BBC World Service Poll, 42% of Russians view India positively, with only 9% expressing a negative view. India-Russia Relations A Prelude A cordial relationship with India that began in the 1950s represented the most successful of the Soviet attempts to foster closer relations with Third World countries. The relationship began with a visit by Indian Prime Minister Jawaharlal Nehru to the Soviet Union in June 1955 and Khrushchev's return trip to India in the fall of 1955. While in India, Khrushchev announced that the Soviet Union supported Indian sovereignty over the disputed territory of the Kashmir region and over Portuguese coastal enclaves, e.g. Goa. Indias relationship with the erstwhile Soviet Union and the Russian Federation is founded on trust and mutual interests. In the early years of this relationship, India greatly gained from the Soviet Union in developing its core industries and laying the foundation for future growth. During the Cold War years, India depended on the Soviet Union for its unflinching support in protecting its vital interests in a number of fields including Jammu & Kashmir. Many of Indias scientific and technological accomplishments particularly in the field of space and nuclear energy became possible because of strong support extended by the Soviet Union. The Indo-Soviet Friendship Treaty of 1971 provided a framework for deepening this cooperation. Indias defence forces owe much to the technology, equipment, training and product support available from the Soviet Union and its successor states. The military-technical cooperation between India and Russia has been the center piece of the bilateral relationship and will continue to remain important in years to come.The decade of the Nineties was marked by developments which had profound implications for geopolitics and also impacted India-Russia relations. In the wake of the Soviet Unions disintegration, Russia remained focussed on coping with its own internal turbulence. The Soviet military industrial complex disintegrated. Russia passed through a difficult transition to market economy. This was disruptive for defence supplies to India, which was itself introducing economic reforms and diversifying its international interactions. Combined with availability of new sources of defence supplies particularly in the west and Israel, India Russia defence relationship began to undergo changes. The Russian state itself began to look westwards and the two countries seemed to drift from each other for a while. However, India has always recognized the importance of Russia and repeatedly emphasized that its relationship with one great power is not at the cost of its relations with its erstwhile friends and partners. This approach underpins Indias policy of forging strategic partnerships with all the great powers i.e. the United States, the Russian Federation, Peoples Republic of China, the European Union and Japan. Simultaneously, India continues its efforts to deepen cooperation with member countries of SAARC, ASEAN and IBSA. Indias policy is based on developing constructive and mutually beneficial cooperation with all countries in its region and other parts of the world. The relationship between India and Russia needs to be nurtured in the changing global environment. Traditionally, both countries have favoured a rule based international order with both subscribing to the notion of a multi-polar world. Despite new sources for defence supplies, Russia remains a crucial partner for India. With its rapid economic growth, Indias energy needs will continue to multiply. India will be a growing market for hydrocarbons as well nuclear energy and thus, energy offers considerable potential for mutually beneficial cooperation. Indias globalizing service industries and corporate can help diversify the Russian economy and develop bilateral trade.

It was in this background that the IDSA organized a dialogue between scholars from Russia and India to deliberate on a range of issues concerning the two countries. These included among others, Russias approach to the West, the Iranian nuclear issues, the situation in Afghanistan-Pakistan, the issues of Intellectual Property Rights, future of Russia-India bilateral cooperation. The dialogue was in a way a stocktaking of developments on these issues and an exploration of the emerging opportunities to deepen this strategic partnership. Indo-Russo relations refer to the bilateral relations between the Republic of India and the Russian Federation. During the Cold War, India and the Soviet Union (USSR) enjoyed a strong strategic, military, economic and diplomatic relationship. After the collapse of the USSR, Russia inherited the close relationship with India, even as India improved its relations with the West after the end of the Cold War. Traditionally, the Indo-Russian strategic partnership has been built on five major components: politics, defence, civil nuclear energy, anti-terrorism co-operation and space.(1) These five major components were highlighted in a speech given by the Indian Foreign Secretary Ranjan Mathai in Russia(1). However, in recent years a sixth component, economic, has grown in importance with both countries setting a target for US$20 billion in bilateral trade by 2015(2). In order to facilitate this target both countries are looking to develop a free trade agreement(3)(4)(5). Bilateral trade between both countries in 2012 grew by over 24%. The powerful IRIGC is the main body that conducts affairs at the governmental level between both countries. Both countries are members of many international bodies where they jointly collaborate closely on matters of shared national interest. Important examples include the UN, BRICS, G20 and SCO where India has observer status and has been asked by Russia to become a full member. Russia has stated publicly that it supports India receiving a permanent seat on the United Nations Security Council. In addition, Russia has expressed interest in joining SAARC with observer status in which India is a founding member. India is the second largest market for the Russian defence industry. In 2004, more than 70% of the Indian Militarys hardware came from Russia, making Russia the chief supplier of defence equipment. India has an embassy in Moscow and two consulates-general (in Saint Petersburg and Vladivostok). Russia has an embassy in New Delhi and four consulates-general (in Chennai, Hyderabad, Kolkata, Mumbai) (11). According to a 2013 BBC World Service Poll, 42% of Russians view India positively, with only 9% expressing a negative view. The ongoing collaboration in the field of science & technology, under the Integrated Long-Term Programme of Co-operation (ILTP) is the largest co-operation programme in this sphere for both India and Russia. IndiaRussia relations in the field of culture are historical. Prominent Russian painter and philosopher Nicholas Roerich was influenced by the philosophy of Ramakrishna and Vivekananda, the poetry of Rabindranath Tagore, and the Bhagavad Gita. He spent his last life in Kullu, Himachal Pradesh. The 130th birth anniversary of Nicholas Roerich and 100th birth anniversary of Svetoslav Roerich were celebrated in India in October 2004. Notable Russian Indologists like Eugene Chelyshev and Gury Marchuk were awarded the Sahitya Akademi Fellowship by the Government of India. Days of Russian Culture were held in India in November 2003, in Delhi, Kolkata and Mumbai. "Days of Indian Culture" in Russia were organised from September to October 2005 in Russia. Chief Minister of National Capital Territory of Delhi led a delegation for participating in the event "Days of Delhi in Moscow" from 28 May 1 June 2006. The "Year of Russia in India" was held in 2008. It was followed by the "Year of India in Russia" in 2009. There is a Hindi Department, in the University of Moscow.

Objectives1. The study aims to examine the changing relations between India and Russia over the years.1. It endeavours to look into the time tested friendship of both these countries rarely shared by any other counterparts in world politics.1. The study also testifies the strategic partnership and super bonding these two countries share with each other.1. The study also looks at the defence, economic and energy trade between the two countries at a broader perspective.Hypothesis1. Indo-Russia relations are not just political, economical, military and cultural but also psychological 1. India requires the support of Russia more than Russia of India in order to leapfrog to the Global Politics.

Methodology

The proposed study will be based on historical, descriptive, comparative and analytical review of the data collected both from primary and secondary sources. The analytical study of the available sources is conducted in the light of the rapidly changing world politics. Day to day events are taken care of in keeping their relevance to the research topic. Proposed study will take into account all the new developments taking all over the World and the time tested external relations between the countries and will make an empirical examination with a keen observance. Apart from the available source materials like books, periodicals, journals, newspapers etc, primary sources like official documents, economic reports and statistical analysis will be taken care of. This will give a more accurate view of the subject.

Chapter IIRELATIONS BETWEEN INDIA AND THE SOVIET UNION

Historically, the USSR under Stalin (Iosif Dzhugashvili), was suspicious of the genuineness of Indias independence and non-alignment. However, Indo-Soviet bonhomie started with Jawaharlal Nehrus visit to the USSR in June 1955 and the Nikita Khrushchev/Nikolai Bulganin visit to India in December 1955. This was also the time when the Congress party in India was affirming its belief in state planning and a socialistic pattern of society, and Nehru was playing a leading role in the Bandung Conference (1955) of 29 Afro-Asian nations. During the same period, the USSR began to use the instruments of aid, trade and diplomacy in developing countries, to limit Western influence. Subsequently, Indo-Soviet relations flourished over the decades in the metallurgy, defence, energy and trade sectors. During the IndiaChina war in 1962, the USSR tried to be neutral between what it called brother China and friend India, with the Peoples Republic of China seeing this as a betrayal of international communist solidarity on the part of the USSR, and a factor that reflected and further exacerbated the growing SinoSoviet split. In the early 1970s both Indian and Soviet leaders looked on the emerging US-Chinese rapprochement as a serious threat to their security. Their response had been in 1971 with the Indo-Soviet Treaty of Peace, Friendship and Cooperation, which provided immediate consultation in case of military action against parties to the Treaty.5 During the IndiaPakistan war in 1971, the USSR took a firm position in favour of India and sent ships to the Indian Ocean to counter any move by the USA, which had already sent its 7th Fleet ships into the Bay of Bengal. The results of the 1971 IndoPakistani war and emergence of Bangladesh established a trusted partnership between India and the USSR. During the 1980s both Rajiv Gandhi and Mikhail Gorbachev advocated a nuclear-free world. However, after the Soviet invasion of Afghanistan in 1979, India was also confronted with a dilemma of how to preserve its non aligned credibility without jeopardizing its relations with the USSR.India since its independence in 1947 has followed a policy of peace and non-alignment. India has always raised its voice in favour of truth and Justice. It was after India got its Independence in 1947 that the Nation has able to form its own foreign policy. India relationship with the Soviet Union started off very well due to Pandit Nehrus initiative. Indias relations with the Soviet Union in those first five year after independence were ambivalent, guided by Nehrus decision, to remain non-aligned and take active part in the Commonwealth of Nations. However in February 1954, when the US administration announced the decision to provide arms and supply sophisticated military hardware and economic aid to Pakistan, this development alarmed India. This close Pakistan-US relationship also did not down well with Soviet Union, which also utilized this opportunity to develop a closer relationship with India. Although Indo-Soviet cooperation had begun much earlier, Soviet defence and military cooperation with India began mainly when Sino-Soviet and Sino-Indian relations started deteriorating. Following the 1962 Sino-Indian war, the Sino-Pakistani axis was also a force for growing cooperation between India and Soviet Union.

An important event took place on August 9, 1971 when the USSR and India signed a Treaty ofPeace, friendship and Cooperation. It is important to note under which circumstances this treaty was signed. Tensions between India and Pakistan were running high. Their allies and opponents fromthirdcountries were involved, directly or indirectly in the conflict in South Asia. Pakistan was being supported by China and through this relationship china was seeking ways to contact Washington. That time, china was in a state of perpetual conflict with both India and China. The United States helped Pakistan considerably not just with political support but with supplying arm as well. During this time, both Beijing and Washington were interested in stemming the spread of soviet influence in Asia, where India was becoming one of Moscows few allies. Under these circumstances, the Soviet Union made its historic decision in favour of India in Hindustan in the early 1950s, and remained loyal to its ally, supporting the position of New Delhi during a difficult period in the early 1970s.It was during the time of 1971, when the national movement in East Pakistan erupted. This led to the proclamation of the Republic of Bangladesh on March 26, 1971. The USSR tried to prevent tensions from escalating into a direct armed conflict. The then Soviet foreign minister Andrei Gromyko arrived in New Delhi in the summer of 1971 when the relation between India and Pakistan were in miserablestate.itwas during this time of August 9, 1971 when the USSR and India signed a Treaty ofPeace, friendship and Cooperation.This treaty played an important role which was well-prepared and thoroughly thought out and it took into account the high tensions in and around the Hindustan. This treaty further stated effective commitment of Soviets Union that it shall not enter into or participate in any military alliance directed against the other party. The parties also undertook to abstain from providing any assistance to any third country that engages in armed conflict with the other party. This was an important to India especially during the time when territory was under pressure from both East and West Pakistan.Nevertheless Conflict broke out despite the Soviet Unions efforts to preclude it. The conclusion of the treaty and the Soviet Unions obvious support for the Indian position did not help. The talks and manoeuvres and other great powers, primarily the United States and China, and the triple use of the Veto by the Soviet envoy to the UN did not achieve the desired effect. The sides were not ready for compromise. Military actions eventually led to military defeat of Pakistan, the consolidation of the International positions of the newly-independent Bangladesh and a geopolitical change in the region .All of Indias friends and foes recognized its regional leadership.It was during 1971, Treaty was signed for a period of 20 years with an automatic extension of five years for each subsequent period. During the end of this term, Soviet Union was suffering serious upheavals and was on the brink of collapse. It was in beginning of 1993, that the experts, diplomats and scientists managed to peruse President Yeltsin not to ignore such friends and allies as India. It was later again in 1993, Yelstin made an official visit to India where they signed a new bilateral Treaty on friendship and Cooperation. Both the countries reaffirmed their commitment to the New Delhi Declaration on the principle of Nuclear Weapon Free and Non-violent World, which was signed on November 27, 1986. Moreover, in Article 12 of the document the parties undertook to protect and facilitate the implementation of human rights and fundamental liberties, including freedom of religion and minority rights, and to counter all forms of religious extremism, hatred and violence. Further, this document reflected new challenges faced by the world and the two countries such as on terrorism, the taking of Hostages, threats to sea navigation and civil aviation, and illegal drug trafficking. By displaying cooperativeness and realistic approach of their assessment of global events, and to the test they faced in determining the form and direction of their bilateral reforms.Indo-Soviet Treaty of Friendship and Cooperation In the annals of diplomacy, the Indo-Soviet Treaty on Peace, Friendship and Cooperation, signed in August 1971, is a unique document that not only epitomised the special relationship between India and the then USSR, but also acted as a guarantor of regional peace. The treaty may have been replaced by its modern version, but its legacy continues to underpin the burgeoning strategic partnership between India and Russia. Few treaties have played such an important role in shaping politics, history and geography of the world as the 1971 Indo-Soviet Treaty on Peace, Friendship and Cooperation. The Soviet disintegration and the end of cold war may have eroded some of its relevance, but nobody can deny that it still reflects the brightest moment in Indo-Russian diplomatic history, enhancing New Delhis international profile and consolidating the Soviet position in Asia. Many experts have compared the signing of the treaty as Indias second liberation, and they were right in many ways.

Chapter-IIIINDO RUSSIA RELATION CHANGE AND CONTINUITY

In the initial post-Soviet period Later in 1990s after the disintegration of the Soviet Union, Russia found it difficult to keep up the economic position with India. The infrastructure that supported trade, economic, scientific and technical cooperation was practically destroyed. The leaders tried to maintain the same ties but that couldnt happen because they were concerned with their own economic and social problem. It was during the backdrop they signed an important document called the Moscow Declaration on the protection of Interests of Pluralistic states. This historic tie happened in the summer of 1994.Bilateral relations in the 1990s went through a period of uncertainty when Russia was preoccupied with domestic economic and political issues, and with its relations with the USA and Europe. Now India had to deal with a new Russia which was Eurocentric, economically dependent on the West, and neither had the interest nor the resources for Third World regimes. President Boris Yeltsin, during his visit to Delhi in 1993,tried to recreate the spirit of old friendship with a new Treaty of Friendship to replace the old India-Soviet 1971 treaty. However, the fundamental character of the Treaty was transformed and in case of any threat to peace, the new Treaty vaguely called for regular consultations and co-ordination.8 Although Yeltsin described India and Russia as natural partners, he was careful not to give the impression of a special relationship. Although relations were restored to respectable levels, the early years (199196) of benign neglect of India by Russia left a deep mark on Indian policy-makers.10 The situation changed when the new Russian Prime Minister Yevgeny Primakov (199899)started shifting from the previous pro-Western Russian foreign policy. To strengthen his countrys relations with old allies, Primakov visited India in 1998 and pushed proposals for creating a Russia-India-China (RIC) strategic triangle, although RIC coherence remains questionable for some Indian commentators like Abanti Bhattacharya: the development of a strategic triangle would be unrealistic. The reasons can be easily found in the mutual suspicion between India and China.11 The new Russian leadership under Vladimir Putin (president,200008) reversed the Yeltsin-era drift in India-Russia bilateral relations, signed the Declaration on Strategic Partnership with India in 2000 and established the institution of annual summit meetings.12 Moscow realized that as a Eurasian power, an active Russian role and influence in dynamic Asia would be limited without a solid partnership with old friends like India. Indian commentators welcomed Putins comment in his 2004 visit, that India is our strategic privileged partner [] And speaking from the point of view of geographical representation [] India is number one, as recognition of Indias own rise. State linkages:Since 1992 about 15 summit meetings have taken place and about 135 agreements have been signed between the two countries. To improve their economic relationship, an Indo-Russian Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) has been working towards promoting bilateral cooperation. The Commission covers 11 joint working groups, namely: trade and economic co-operation; pharmaceuticals; petroleum; the coal industry; metallurgy; science and technology; cultural cooperation; information technology; power and energy; the environment and natural resources; and co-operation with the regions. In the 15th meeting of IRIGC-TEC, held in Moscow in October 2009, a new trade target of US $20,000m. by 2015 was agreed.As already mentioned, a major turning point in their bilateral relationship was their formal Declaration on Strategic Partnership between Republic of India and the Russian Federation, signed during Putins visit to India in October 2000. Broadly, this agreement meant enhanced co-operation in the political, economic, defence and cultural fields. It talked of deepening anddiversifying cooperation in sectors such as metallurgy, fuel and energy, information technology, communications and transport, including merchant shipping and civil aviation, and of further development of cooperation in banking and finance, and improving credit and insurance facilities.There was mention of simplifying rules and procedures for travel by entrepreneurs and businessmen of both countries. It was also agreed to jointly explore the possibilities of regional trading arrangements with third countries. Since then, summit meetings are taking place almostevery year with many more agreements signed every year. The crux of all these summit meetings and accompanying declarations has been common positions on major global issues like international terrorism and desire for a multi-polar world and close bilateral relations. These summits have been a very useful platform for formulating common positions and responses to emerging global political and economic issues. However, what do these Summit declarations actually mean in real terms? There are many ways of looking at these developments. Every time the summit meeting takes place, the diehard proponents of old Indo-Soviet/Russian friendship emphasize the need to look at these agreements and declarations as a testimony of a time-tested, mutually beneficial friendship.Defence linkagesThere are estimates that about 800 Russian defence production facilities are kept in operation by Indian defence contracts.18 Although China used to be the number one arms importer from Russia, India has emerged as number one since 2007. Some analysts have argued that in arms exports, geopolitical and economic factors will eventually force Russia to make a choice between China and India, a contest that India will probably win Indias major purchases from Russia over the last 18 years have been varied and extensive, including aircraft (MIG 29, MIG 29 SMT, SU 30K, SU MK1), helicopters (Mi-17, Mi-18, etc.) and air-defence systems (AK 630 30mm, etc.). In June 2010 the Cabinet Committee on Security cleared another deal of more than $3,000m. to buy an additional 42 Sukhoi-30 MKI fighters from Russia. The deal came on top of the 230 aircrafts already contracted from Russia in three deals worth a total of $8,500m. The initial contract was for 50 fighters, at $1,460m. In 2000 the Government contracted the licensed production of 140 fighters by Hindustan Aeronautics Limited. Then another 40 were added to the contract.20 Some purchases have been of artillery and armoured vehicles (256M Tunguska), engines, sensors and a variety of missiles. Maritime purchases have been noticeable, including frigates (Talwar stealth class), submarines (Kilo/Sindhughosh), nuclear submarines (Akula-2 lease) and an aircraft carrier (the delayed Gorshkov purchase originally due for handover in 200809, now scheduled for handover at the end of 2012). Joint production has seen India also starting to producing significant portion of armaments at home, including Brahmos missiles, T72M1 tanks, radars, anti-ship and anti-tank missiles, etc. Most tanks and aircraft are also being assembled in India. In 2009 both countries agreed on a new military technical co-operation agreement for the period 201120. The new programme covers both ongoing projects, such as the Su-30 MKI fighter plane and the T-90 tank production in India, and 31 new projects, which include a fifth-generation fighter aircraft, the multi-role transport aircraft and a new multi-role helicopter. Under this programme India hopes to further shift from the buyer-seller relationship to joint design, development and production. India also has a long tradition of collaboration in space with the USSR/Russia. Thumba Equatorial Rocket Launching Station was set up with Soviet help and many Indian experimental and remote sensing satellites were launched with Soviet co-operation. In 1990 India entered into a $350m. contract agreement with Russia to supply the cryogenic engines and technology for their manufacture within the country. Russia earlier agreed to provide India with the technology, but then reversed the decision after it signed the Missile Technology Control Regime agreement with the USA. The USA objected to giving India the technology because of its potential use for nuclear missiles. Commercial and political factors later compelled Russia to sell the rocket engines while withholding the technology. Soon afterwards Indian scientists were able to develop Indian engines. Currently, both countries collaborate on many space projects, which include Indias unmanned lunar space flight project (Chandrayaan-2), the human space flight project and the development of the Indo-Russian Student Satellite, Youthsat. Russia has also agreed to provide India with access to signals from its Global Navigation Satellite System (GLONASS).

Commercial linkagesOne important point of the old Indo-Soviet friendship was a special bilateral trade and economic relationship. Although this arrangement had many of the usual weaknesses, like corruption and patronage transactions in low-quality products, it helped many small and medium sized private Indian companies to become exporters. After the disintegration of the USSR, this relationship was badly damaged. Economic transformation in Russia from a centrally planned economy to a market economy in 1992 coincided with the policies of economic liberalization in India. These developments changed the nature and character of foreign economic relations in both countries. Therefore, despite having solid economic and trade relations in the past, mostRussian and Indian companies are still struggling to adjust in each others markets. Economic relations are still surviving mainly because of defence purchases and some public sector Indias relations with Russia investments by India. Commercial initiatives are slow to take advantage of Russian economic transformation. Despite good intentions, both governments have been unable to facilitate any major economic initiative which could have given a new direction to bilateral commercial ties

Indian and Russian diplomats holding talks atHyderabad HouseinNew DelhiBackground of trading linkagesAfter the collapse of the USSR, the Indian and Russian Governments renegotiated the entire trade regime. The 1993 agreement terminated the traditional rupee trade arrangement and mandated all bilateral trade transactions to be conducted on a hard currency basis. However, with this agreement the issue of repaymentSince 1953, when the first trade agreement took place, seven long-term agreements have been signed between the two countries up to the collapse of the USSR. This bilateral trade was conducted through a specific system of trade and payment called the Rupee Trade System, based on annual plans. The important point of the system was payments in non-convertible currency. The trade turnover between the two countries increased from less than 2 crores in 1953 to about 8,000 crores in 199091. In 199091 more than 16% of Indian exports went to the USSR and about 6% of imports came from there. One of the most striking characteristics of the Soviet centrally planned economy was that it had created a system of exchange in non-convertible currencies with many of its trading partners. This trade behaviour existed not only with the Council for Mutual Economic Assistance (CMEA) countries, but also with some other friendly countries like India. The value of exchange between the Russian rouble and Indian rupee currencies was arrived at through periodic bureaucratic negotiations. Most of the ideologically-motivated scholars in India regarded this arrangement as a Soviet version of bilateral aid. The mainstream academia in India also declared that India had derived substantial benefits from its trade with the socialist world.21 In the late 1970s and early 1980s a few scholars in India had already warned that despite short-term gains, this type of arrangement would harm long-term requirements of efficiency and growth. After initial industrialization,India had problems of importing further machinery either for joint production for third countries or for the exclusive production for the socialist bloc. India did not want Soviet participation in those areas where it could get markets of its own. It also did not want captive units, the production of which could not be exported anywhere else but to the Soviet bloc and could give the Soviets the possibility of dictating terms. Except for a few works, academia in India by and large did not bother to critically examine this pattern. The whole arrangement reflected political imperatives rather than economic rationality. After the Soviet break-up, the new policy elite in Russia also found these irrational arrangements with developing countries unaffordable. The haste with which bilateral payment arrangements were scrapped in favour of payments in convertible currencies indicated that Russian and Indian policy-makers considered s of civilian and military loans taken by India from the former USSR also came up. Finally, after prolonged negotiations, the rouble credit was denominated in rupees and a repayment schedule was drawn up. The agreement provided for an annual repayment of about the equivalent of $1,000m. in rupees to Russia over a period of 12 years starting from 1994, with smaller amounts for a further period of 33 years. The rupee debt funds were to be used by the Russian side for import of goods and trade-related services from India. The rupee debt funds are maintained in a central account with the Reserve Bank of India. Under a three-year perspective plan, which came to an end in 1997, a part of the rupee debt funds was allocated for the import of tea, tobacco, soya meal and pharmaceuticals to designated Russian agencies. The balance was either auctioned or allocated to various states or importing organizations in Russia. In January 1998 this mechanism was replaced with a weekly auction of rupee debt funds conducted by the Vnesheconombank (Bank for Foreign Economic Affairs). During 1999 allocations made for the import of pharmaceuticals and medical equipment from India were utilized by several ministries in Russia. Between 2000 and 2006 the utilization of rupee funds continued through the auctions. In 2007 it was agreed that Indias restructured rupee debt would be invested in Russian projects in India. According to Indian finance ministry sources, in December 2007 India still owed $1,970m. in debt to Russia under this category.

Cultural CooperationThe strong tradition of Indian studies continues in Russia. Jawaharlal Nehru Cultural Center at the Embassy of India, Moscow (JNCC) maintains close cooperation with all leading Russian institutions including the Institute of Moscow, Russian State University for Humanities, Moscow, Institute of Oriental Studies, Moscow, Institute of Asian and African Studies at the Moscow State University, School of International Relations at the St. Petersburg University, Kazan Federal University, Kazan and Far Eastern National University, Vladivostok. There is a Mahatma Gandhi Chair on Indian Philosophy at the Institute of Philosophy, Moscow, while a Chair of Contemporary Indian Studies is at the Russian State University for Humanities, Moscow. Proposals to establish Chairs of Indian studies at Kazan Federal University, Kazan and Volgograd State University, Volgograd are currently under ICCRs consideration. About 20 Russian Institutions, including leading universities and schools regularly teach Hindi to 1500 Russian students. Apart from Hindi, languages such as Tamil, Marathi, Gujarati, Bengali, Urdu, Sanskrit and Pali are taught in Russian Institutions. There is general interest among Russian people in Indian dance, music, yoga and ayurveda. JNCC conducts classes in yoga, dance, music and Hindi for approximately 500 students every month.There are regular cultural initiatives to promote people-to-people contacts between India and Russia. Year of Russia was celebrated in India in 2008 and the Year of India was marked in Russia in 2009. 150th anniversary of Rabindranath Tagore and a mini Festival of Indian Culture were celebrated in Russia in 2011. During 2012, the Embassy of India, Moscow organized several academic, cultural and other events to mark the 65th anniversary of establishment of diplomatic relations between India and the Russian Federation. A Festival of Russian Culture was organized in India in 2012. Days of Moscow in New Delhi were held from 26- 29 October 2012.Bilateral Relations between India and Russia Relations with Russia are a key pillar of India's foreign policy and Russia has been a longstanding time-tested partner of India. Since the signing of Declaration on the India-Russia Strategic Partnership in October 2000 (during the visit of President Vladimir Putin to India), India-Russia ties have acquired a qualitatively new character with enhanced levels of cooperation in almost all areas of the bilateral relationship including political, security, trade and economy, defense, science and technology and culture. Under the Strategic Partnership, several institutionalized dialogue mechanisms operate at both political and official levels to ensure regular interaction and follow up on cooperation activities. During the visit of Russian President to India in December 2010, the Strategic Partnership was elevated to the level of a Special and Privileged Strategic Partnership.Kashmir and TerrorismRussias stand on the issue of Kashmir and the terrorism faced by India on account of this dispute has been consistent and unconditional over time or regime change. Every Russian leader, from Yeltsin to Putin, has reiterated this and it forms the basis for Indias trust with Moscow. Russia has never tried to balance Indias interest with Pakistan; India has never put into a position of having to compete with other countries to prove its loyalty by approving all other Russian positions (for example on Iran, Iraq, etc.); Russian defence and strategic support is not balanced with a link to any other Russian partner, including China. The US on its part has never supported the Indian position on Kashmir. They have hyphenated their relations with India with that with Pakistan. The US needs Pakistan for its Afghanistan policy. They will thus continue to balance India and Pakistan. International terrorism is perceived as a threat in the Russian national security doctrine, and both India and Russia have expressed concern that the international coalition against terrorism has not paid sufficient attention to terrorism in regions like Kashmir, Chechnya, etc., and is instead focused entirely on Afghanistan and Iraq. It can thus be judged to be selective and motivated. Russia and India have had reasons to combine forces on this issue, resolved to exchange information and set up working groups and will have to address this problem regionally.India and Russia: Moving towards a 21st century worldThe recent summit between President Putin and Prime Minister Singh may have heralded a new inflexion point in the bilateral. It would seem that India-Russia relations might have bucked the season of gloom. For years now, since Prime Minister Yevgeny Primakovs reorientation of Russias foreign policy eastwards, weve largely seen two governments making positive statements, not matched by actions on the ground and compounded by a general sense of drift. Adding to this has been a waning interest in India of all things Russian and vice-versa. Two close friends gradually drifting apart, a contemporary tale of the engagement between Moscow and New Delhi. The recent summit between President Putin and Prime Minister Singh may have heralded a new inflexion point in the bilateral. On a cursory comparison of their joint statement issued on October 22 with the previous four summit statements, there seems very little change on the surface and if anything, these statements continue to remain an exercise in blandness. But connecting the dots we get three game changers, which while mentioned, have not been described under the strategic rubric that they perhaps should have.The first is trade which stood at $7.46 billion in 2009, $8.53 billion in 2010, and $8.87 billion in 2011, and has suddenly spurted to $11.04 billion in 2012, registering a 24.5 percent growth year on year. This was the best performance of Russias top 25 trade partners. This is particularly surprising given the present world economic situation, the lack of growth of Indias world trade in 2012 and a marginal growth of 1.8 percent growth in Russias world trade. The second is Russias determination to push through a free trade agreement with India the comprehensive economic cooperation agreement (CECA). Given that most of this increase in bilateral trade has been in-spite of the two governments (outside of the defence sector), this is of particular significance. This will give the Indian private sector critical access to such landlocked markets like Belarus and Kazakhstan, which are part of a customs union with Russia.

Former Prime MinisterAtal Bihari Vajpayeewith Russia's presidentVladimir Putinin November 2001.

Chapter - IVINDIA-RUSSIA: Old Friends and New RelationsIndo-Russo relations refer to the bilateral relations between the Republic of India and the Russian Federation. During the Cold War, India and the Soviet Union (USSR) enjoyed a strong strategic, military, economic and diplomatic relationship. After the collapse of the USSR, Russia inherited the close relationship with India, even as India improved its relations with the West after the end of the Cold War.Traditionally, the Indo-Russian strategic partnership has been built on five major components: politics, defence, civil nuclear energy, anti-terrorism co-operation and space. These five major components were highlighted in a speech given by the Indian Foreign Secretary Ranjan Mathai in Russia. However, in recent years a sixth component, economic, has grown in importance with both countries setting a target for US$20 billion in bilateral trade by 2015. In order to facilitate this target both countries are looking to develop a free trade agreement. Bilateral trade between both countries in 2012 grew by over 24%.The powerful IRIGC is the main body that conducts affairs at the governmental level between both countries. Both countries are members of many international bodies where they jointly collaborate closely on matters of shared national interest. Important examples include the UN, BRICS, G20 and SCO where India has observer status and has been asked by Russia to become a full member. Russia has stated publicly that it supports India receiving a permanent seat on the United Nations Security Council. In addition, Russia has expressed interest in joining SAARC with observer status in which India is a founding member. India is the second largest market for the Russian defence industry. In 2004, more than 70% of the Indian Military's hardware came from Russia, making Russia the chief supplier of defence equipment. India has an embassy in Moscow and two consulates-general (in Saint Petersburg and Vladivostok). Russia has an embassy in New Delhi and four consulates-general (in Chennai, Hyderabad, Kolkata, Mumbai).According to a 2013 BBC World Service Poll, 42% of Russians view India positively, with only 9% expressing a negative view. 41 years after the Indo-Soviet Friendship TreatyThe Indo-Soviet Treaty of Peace, Friendship and Cooperation was a remarkable diplomatic achievement for both India and the Soviet Union. It gave India security and the backing of a superpower and the USSR ended up with an ally in the biggest and most important country in South Asia. India, which wasnt the darling of the West in its avatar as a socialist country with its Hindu rate of growth, needed Soviet vetoes in the United Nations, the way the Russian veto is essential today for regimes in places as diverse as Sri Lanka and Syria.41 years later, India has a US$1.85 trillion economy that grows at 6 percent in a bad year. The country has managed to develop good diplomatic and political relations with many powerful nations. Russia continues to maintain global clout and while it is not as powerful as the Soviet Union was, the country remains a major global political force as well as an emerging economic giant. The relationship between the two countries remains warm and cordial yet the bonhomie of the 1970s seems to be missing at the higher levels.1 years after the signing of the Indo-Soviet Treaty, the most important aspect of the Indo-Russian relationship remains the tremendous people-to-people friendship. Since visa rules have been simplified, there has been an ever-increasing demand among Indians to visit Russia. Largely gone are the stereotypes about the Russian mafia and the KGB. Moscow is in the must-visit list of most Indian globetrotters and an increasingly number of adventurers want to take a Trans-Siberian rail journey.Although Goa remains the favourite destination for Russians in India, many prefer to head to Hampi and onwards to more places in southern India. Then there are the fans of Bollywood, a film industry that is finding new fans among the Russian youth. For those people who think Indian films are not popular in Russia, I would recommend a visit to popular Russian social-networking site vkontakte.ru. Almost every new Hindi film can be seen on the site, some with subtitles and others like Jab We Met, and 3 Idiots dubbed in Russian.

Indians who travel beyond Moscow and St Petersburg are often overwhelmed by the friendliness and hospitality that they get in Russia. Its beyond these 2 big cities where the Real Russia lives and where Russian culture can be found in an unadulterated form. Similarly, Russians who get off the tourist trail often talk about the special feelings that Indians have for Russia. Cultural festivals in major cities have shown that the Russians and Indians value each others diverse cultures but the spirit of Hindi-Russi Bhai-Bhai exists in the smaller areas of both countries.As far as political relationships go, India-Russia ties have had far more ups than downs and continue to be important for both countries. Whenever Russian or Indian leaders talk about the relationship between the countries, words like strategic get overpowered by the stress on friendship. The political friendship between the two countries needs to be harnessed and used in several areas, where the countries enjoy synergy. Like the people-to-people relationship, Indo-Russian ties are fundamentally strong and enjoy almost universal support across the political spectrum in both countries.Special and Privileged Strategic PartnershipFew people would know that Russia is the only country with which India has a mechanism of annual ministerial review of defence relations. Also, Russia was the first country with which India started holding the annual summit, a mechanism that India currently has in place with just two countries till date Japan being the other one. Relations with India have always been and I am sure will be one of the most important foreign policy priorities of our country. Our mutual ties of friendship are filled with sympathy, and trust, and openness. And we must say frankly that they were never overshadowed by disagreements or conflict. This understanding - this is indeed the common heritage of our peoples. It is valued and cherished in our country, in Russia, and in India. And we are rightfully proud of so close, so close relations between our countries.Political relationsBoth countries attending the BRICS summit in New Delhi, India March 2012. The first major political initiative, since the collapse of the Soviet Union, between India and Russia began with the Strategic Partnership signed between the two countries in 2000. President Vladimir Putin stated in an article written by him in the Hindu, "The Declaration on Strategic Partnership between India and Russia signed in October 2000 became a truly historic step". Prime Minister Manmohan Singh also agreed with his counterpart by stated in speech given during President Putin's 2012 visit to India, "President Putin is a valued friend of India and the original architect of the India-Russia strategic partnership". Both countries closely collaborate on matters of shared national interest these include at the UN, BRICS, G20 and SCO where India has observer status and has been asked by Russia to become a full member. Russia also strongly supports India receiving a permanent seat on the United Nations Security Council. In addition, Russia has vocal backed India joining the NSG and APEC. Moreover, it has also expressed interest in joining SAARC with observer status in which India is a founding member. Russia currently is one of only two countries in the world (the other being Japan) that has a mechanism for annual ministerial-level defence reviews with India. The Indo-Russian Inter-Governmental Commission (IRIGC), which is one of the largest and comprehensive governmental mechanisms that India has had with any country internationally. Almost every department from the Government of India attends it. IRIGCThe Indo-Russian Inter-Governmental Commission (IRIGC) is the main body that conducts affairs at the governmental level between both countries. Some have described it as the steering committee of Indo-Russia relations. It is divided into two parts, the first covering Trade, Economic, Scientific, Technological and Cultural Co-operation. This is normally co-chaired by the Russian Deputy Prime Minister and the Indian External Affairs Minister. The second part of the commission covers Military Technical Co-operation this is co-chaired by the two countries respective Defence Ministers. Both parts of IRIGC meet annually. In addition, to the IRIGC there are other bodies that conduct economic relations between the two countries. These include, the Indo-Russian Forum on Trade and Investment, the India-Russia Business Council, the India-Russia Trade, Investment and Technology Promotion Council and the India-Russia Chamber of Commerce. Military relationshipDefence relations between India and the Russian Federation have a historical perspective. The Soviet Union was an important supplier of defence equipment for several decades, and that relationship was inherited by Russia after the break-up of the Soviet Union. In 1997, Russian and India signed a ten-year agreement for further military-technical cooperation. That agreement encompassed a wide range of activities, including the purchase of completed weaponry, joint development and production, and joint marketing of armaments and military technologies. Today, the co-operation is not limited to a buyer-seller relationship but includes joint research and development, training, service to service contacts, including joint exercises. The last joint naval exercises took place in April 2007 in the Sea of Japan and joint airborne exercises were held in September 2007 in Russia. The last military exercise between Russian and Indian army units were held in Uttarakhand in October 2010. However, the bilateral relations seem to be strained with Russia cancelling both its 'Indra' series of military exercises with India for the year 2011. In April 2011, a flotilla of five warships from the Indian navy's eastern fleet that went for joint naval exercises to Vladivostok in the Russian far-east, was turned back without any manoeuvres. The joint army exercises scheduled to be held in Russia in June, 2011 was also cancelled shortly afterwards. One of the reasons given was that the MoD had not informed Moscow of the army exercises in advance. An Inter-Governmental commission on military-technical co-operation is co-chaired by the defence ministers of the two countries. The seventh session of this Inter-Governmental Commission was held in October 2007 in Moscow. During the visit, an agreement on joint development and production of prospective multi-role fighters was signed between the two countries.An IndiaRussia co-operation agreement was signed in December 1988. It has resulted in the sale of a multitude of defence equipment to India and also the emergence of the countries as development partners as opposed to purely a buyer-seller relationship. Two programmes that evidence this approach are the projects to form Indian-Russian joint ventures to develop and produce the Fifth Generation Fighter Aircraft (FGFA) and the Multirole Transport Aircraft (MTA). The agreement is pending a 10-year extension. India and Russia have several major joint military programmes including:1. BrahMos cruise missile programme1. 5th generation fighter jet programme1. Sukhoi Su-30MKI programme (230+ to be built by Hindustan Aeronautics)1. Ilyushin/HAL Tactical Transport AircraftAdditionally, India has purchased/leased various military hardware from Russia:1. T-90S Bhishma with over 1000 to be built in India1. Akula-II nuclear submarine (2 to be leased with an option to buy when the lease expires)1. INS Vikramaditya aircraft carrier programme1. Tu-22M3 bombers (4 ordered)1. US$900 million upgrade of MiG-291. Mil Mi-17 (80 ordered)1. Ilyushin Il-76 Candid (6 ordered to fit Israeli Phalcon radar)1. The Farkhor Air Base in Tajikistan is currently jointly operated by India and Russia.In May 2011, Russia cancelled joint army and naval exercises with India allegedly in response to the elimination of Mikoyan MiG-35 from the Indian MRCA competition. An Indian Navy report to the referred to Russia as a fair-weather friend and recommended the review of Russia's status as a strategic partner. Both countries signed a defence deal worth $2.9 billion during President Putin's visit to India in December 2012. The 42 new Sukhois, to be produced under licence by defence PSU Hindustan Aeronautics, will add to the 230 Sukhois earlier contracted from Russia. Overall, the price tag for the 272 Sukhois - three of the over 170 inducted till now have crashed - stands at over $12 billion.The medium-lift Mi-17 V5 helicopters (59 for IAF and 12 for home ministry/BSF) will add to the 80 such choppers already being inducted under a $1.34 billion deal inked in 2008. The value of India's defence projects with Russia will further zoom north after the imminent inking of the final design contract for the joint development of a futuristic stealth fifth-generation fighter. This R&D contract is itself pegged at US$11 billion, to be shared equally by the two countries. So if India inducts over 200 of these 5th Gen fighters, as it hopes to do from 2022 onwards, the overall cost of this gigantic project for India will come to around US$35 billion since each of the jets will come for upwards of US$100 million at least.

Economic relationsBilateral trade turnover is modest and stood at US$3 billion in 200607, of which Indian exports to Russia were valued at US$908 million. The major Indian exports to Russia are pharmaceuticals; tea, coffee and spices; apparel and clothing; edible preparations; and engineering goods. Main Indian imports from Russia are iron and steel; fertilisers; non-ferrous metals; paper products; coal, coke & briquettes; cereals; and rubber. Indo-Russian trade is expected to reach US$10 billion by 2010.The India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Co-operation (IRIGC) is co-chaired by India's External Affairs Minister and the Russian Deputy Prime Minister. There are six Joint Working Groups [WG] under the IRIGC, namely, WG on Trade and Economy [trade and financial matters], WG on Energy [oil and gas, thermal and hydel power, non-conventional energy], WG on Metallurgy and Mining [steel, non-ferrous metal, coal], WG on Science & Technology; WG on Communication and Information Technology; and WG on Culture and Tourism. The 13th of the IRIGC was held in Moscow on 12 October 2007.The two countries have set up India-Russia Forum on Trade and Investment at the level of the two Commerce Ministers to promote trade, investment and economic co-operation. The first Forum was held in New Delhi on 1213 February 2007, which was attended by the Minister of Commerce and Industry and the Russian Minister of Economic Development and Trade, apart from a large number of business representatives from both sides. The Minister of Commerce & Industry, Shri Kamal Nath participated in the 11th Saint Petersburg International Economic Forum on 910 June 2007.In February 2006, India and Russia also set up a Joint Study Group to examine ways to increase trade to US$10 billion by 2010 and to study feasibility of a Comprehensive Economic Cooperation Agreement (CECA). The group finalised its report after its fourth meeting in Moscow in July 2007. It has been agreed that a Joint Task Force would monitor the implementation of the recommendation made in the Joint Study Group Report, including considering CECA. The second BRIC summit was held in Braslia in April 2010. India and Russia agreed to jointly study a Comprehensive Economic Co-operation Agreement with Belarus-Kazakhstan with the aim of boosting trade ties and achieving the ambitious trade target of $20 billion by 2015. Prime Minister Manmohan Singh stated in speech given during President Putin's 2012 visit to India, "Our bilateral trade has grown by over 30 per cent this year. There is still untapped potential in areas such as pharmaceuticals, fertilisers, mining, steel, information technology, civil aviation, telecommunications, infrastructure, food processing, innovation and services, which we will work to exploit".Due to India simplifying recent visa rule changes for Russians travelling to India, the number of tourists increase by over 22%. In 2011 the Indian consulates in Moscow, Vladivostok and St. Petersburg issued 160,000 visas an increase of over 50% compared to 2010. Co-operation in the Energy sectorEnergy sector is an important area in Indo-Russian bilateral relations. In 2001, ONGC-Videsh acquired 20% stake in the Sakhalin-I oil and gas project in the Russian Federation, and has invested about US $1.7 billion in the project. The Russian company Gazprom and Gas Authority of India. have collaborated in joint development of a block in the Bay of Bengal. Kudankulam Nuclear Power Project with two units of 1000 MW each is a good example of Indo-Russian nuclear energy co-operation. Both sides have expressed interest in expanding co-operation in the energy sector.In December 2008, Russia and India signed an agreement to build civilian nuclear reactors in India during a visit by the Russian president to New Delhi.Space Co-operationIndia and Russia both have signed agreements for cooperation and use of GLONASS. Space is another key sector of collaboration between the two countries. During President Vladimir Putin's visit to India in December 2004, two space-related bilateral agreements were signed viz. Inter-Governmental umbrella Agreement on co-operation in the outer space for peaceful purposes and the Inter Space Agency Agreement on co-operation in the Russian satellite navigation system GLONASS. Subsequently a number of follow-up agreements on GLONASS have been signed. In November 2007, the two countries have signed an agreement on joint lunar exploration. These space co-operation programmes are under implementation. Chandrayaan-2 is a joint lunar exploration mission proposed by the Indian Space Research Organisation (ISRO) and the Russian Federal Space Agency (RKA) and has a projected cost of 4.25billion (US$90 million). The mission, proposed to be launched in 2013 by a Geosynchronous Satellite Launch Vehicle (GSLV) launch vehicle, includes a lunar orbiter and a rover made in India as well as one lander built by Russia.Science and TechnologyThe ongoing collaboration in the field of science & technology, under the Integrated Long-Term Programme of Co-operation (ILTP) is the largest co-operation programme in this sphere for both India and Russia. ILTP is coordinated by the Department of Science and Technology from the Indian side and by the Russian Academy of Sciences and Russian Ministry of Industry & Science and Technology from the Russian side. Development of SARAS Duet aircraft, semiconductor products, super computers, poly-vaccines, laser science and technology, seismology, high-purity materials, software & IT and Ayurveda have been some of the priority areas of co-operation under the ILTP. Under this programme, eight joint Indo-Russian centres have been established to focus on joint research and development work. Two other Joint Centres on Non-ferrous Metals and Accelerators and Lasers are being set up in India. A Joint Technology Centre based in Moscow to bring cutting edge technologies to the market is also under processing. An ILTP Joint Council met in Moscow on 1112 October 2007 to review co-operation and give it further direction. In August 2007, an MoU was signed between Department of Science and Technology and Russian Foundation of Basic Research, Moscow to pursue scientific co-operation.North-South Transport CorridorThe "North-South" Transport Corridor Agreement [INSTC] has been ratified by all the three original signatory states, viz. India, Iran and Russia, and has come into force since 16 May 2002. This route is expected to reduce the cost of movement of goods between India and Russia and beyond. The 3rd Coordination Council Meeting of the INSTC was held in October 2005 in New Delhi and the 4th meeting was held in Aktau, Kazakhstan in October 2007 to discuss further streamlining the operation of the corridor.In 2011, Iran and Russia agreed to make every effort to develop bilateral and multilateral cooperation in road, rail, air and marine transportation. In 2012, Rasia FZE was awarded the Armenia-Iran railway project and the southern section of the North-South Road Corridor, which will complete the key missing link in the International NorthSouth Transport Corridor.Cooperation in the Cultural SphereIndiaRussia relations in the field of culture are historical. Prominent Russian painter and philosopher Nicholas Roerich was influenced by the philosophy of Ramakrishna and Vivekananda, the poetry of Rabindranath Tagore, and the Bhagavad Gita. He spent his last life in Kullu, Himachal Pradesh. The 130th birth anniversary of Nicholas Roerich and 100th birth anniversary of Svetoslav Roerich were celebrated in India in October 2004. Notable Russian Indologists like Eugene Chelyshev and Gury Marchuk were awarded the Sahitya Akademi Fellowship by the Government of India.TerrorismOn international terrorism, India and Russia agree that there is no justification for terrorism, and this must be fought against, without compromise and wherever it exists. Russia has supported the Indian draft at the UN on Comprehensive Convention on International Terrorism [CCIT]. The two sides signed a MoU on co-operation in combating terrorism in December 2002. A Joint Working Group on Combating International Terrorism meets from time to time and its fourth meeting was held in Delhi on 24 October 2006.Both Russia and India have faced the problem of terrorism, India has seen it in the context of its military presence in Kashmir and Russia has seen it in Chechnya and both the countries are supportive of each other on the issue of terrorism.Nuclear DealsOn 7 November 2009, India signed a new nuclear deal with Russia apart from the deals that were agreed upon by the two countries earlier. India and Russia are in discussion for construction of two more nuclear power units at Kudankulam. The two units already set up are ready for operation. During Russian president Vladimir Putin's visit to India for the 13th annual summit, a co-operative civilian nuclear energy road map was agreed to. Running until 2030, sixteen to eighteen new reactors will be constructed, with installed capacity of 1000 MW each. A 1000 MW reactor costs around $2.5 billion so the deal may touch $45 billion in worth.

Chapter vSTRATEGIC PARTNERSHIP BETWEEN INDIA AND RUSSIA Political Relations:Annual Summit meeting between the Prime Minister of India and the President of the Russian Federation is the highest institutionalized dialogue mechanism under the Strategic Partnership between India and the Russian Federation. So far 14th Annual Summit meetings have taken place alternatively in India and Russia. The last (14th) Annual Summit was held in Moscow on 21 October 2013 when PM Dr. Manmohan Singh visited Moscow and had a meeting with President Putin. A Joint Statement Deepening the Strategic Partnership for Global Peace and Stability was adopted during the Summit. Bilateral agreements concluded during the Summit included a Treaty on sentenced persons; MoUs on standardisation and on energy efficiency; and Programmes of Cooperation in science & technology and in biotechnology. PM Dr. Manmohan Singh also visited St. Petersburg on 4-7 September for participating in the G-20 Summit and met President Putin on the on the sidelines of the 5th BRICS Summit in Durban (South Africa) on 27 March 2013.

There are regular high-level interactions between the two countries. Two Inter- Governmental Commissions - one on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC), co-chaired by the External Affairs Minister (EAM) and the Russian Deputy Prime Minister (DPM) and another on Military Technical Cooperation (IRIGC- MTC) co-chaired by Russian and Indian Defense Ministers, meet annually. The 19th session of the IRIGC-TEC and the 13th session of IRIGC-MTC were held in Moscow on 4 October and 18 November 2013 respectively. EAM Shri Salman Khurshid visited Moscow for intersessional meeting of IRIGC-TEC in April 2013 and then in October 2013 for the IRIGC-TEC meeting with Deputy PM Dmitry Rogozin and meeting with Foreign Minister of Russia, Mr. Sergey Lavrov. At the invitation of the Russian Minister for Interior, Home Minister of India Shri Sushil Kumar Shinde visited Moscow in April 2013. Commerce and Industry Minister, Shri Anand Sharma visited Moscow in April 2013; St. Petersburg in June 2013 to attend St. Petersburg International Economic Forum; St. Petersburg in September 2013 to attend the India - Russia Trade and Investment Forum. Culture Minister Smt. Chandresh Kumari Katoch visited Russia from 10-12 November 2013. Chairperson of the Federation Council (Upper House of Russian Parliament) Ms. Valentina Matvienko visited India in February 2013, at the joint invitation of Chairman, Rajya Sabhaand Speaker LokSabha.Foreign Minister Mr. Sergei Lavrov visited India from 9-11 November 2013 for the India-Russia-China FMs meeting and Asia-Europe Ministerial meeting.Defence:India has longstanding and wide-ranging cooperation with Russia in the field of defence. India-Russia military technical cooperation has evolved from a simple buyer - seller framework to one involving joint research, development and production of advanced defence technologies and systems. BrahMos Missile System, Joint development of the Fifth Generation Fighter Aircraft and the Multi Transport Aircraft, as well as the licensed production in India of SU-30 aircraft and T-90 tanks, are examples of such flagship cooperation. The two countries also hold exchanges and training exercises between their armed forces annually. The Inter Governmental Commission and its Working Groups and Sub-Groups review defence cooperation between the two countries.Commercial Relations:Trade, investment and economic cooperation between India and Russia has been growing steadily. In 2012, bilateral trade increased by 24.5% to reach US$# 11 billion out of which Indian exports amounted to US$ 3 billion while Russian exports were valued at US$ 8 billion. In January-September 2013, bilateral trade amounted to US$ 6.94 billion. Exports from India to Russia amounted to US$ 2.33 billion while imports from Russia stood at US$ 4.61 billion. The two-way investment between the two countries stands at approximately US$ 8 billion. In 2009, both sides set the target of US$ 20 bn bilateral trade by 2015. Priority areas for expanding bilateral economic cooperation are pharmaceuticals, IT, steel, diamonds, aviation, fertilizers, infrastructure, heavy engineering and food products.IRIGC-TEC is the main institutional mechanism to review economic cooperation. It integrates seven working groups on trade and economic cooperation, modernization and industrial cooperation, energy, investment projects, tourism and culture, science and technology, and communications & IT. India - Russia Forum on Trade and Investment co-chaired by the Commerce and Industry Minister of India and the Russian Minister for Economic Development, and India - Russia CEOs Council are the two primary mechanisms to promote direct bilateral business-to- business contacts between India and Russia. Mechanisms such as India - Russia Business Council (partnership between FICCI of India and CCI of Russia), India - Russia Trade, Investment and Technology Promotion Council (partnership between CII of India and RUIE of Russia), India Russia Business Dialogue (partnership between CII of India and Russias Business Council for Cooperation with India) and India - Russia Chamber of Commerce (with focus on SMEs) supplement the efforts to build direct business - to - business ties. In June 2013, the 4th India-Russia Business Dialogue was held within the framework of the annual St. Petersburg International Economic Forum (SPIEF). India-Russia CEOs Council met in St. Petersburg in June 2013 and in Moscow in October 2013. Seventh India-Russia Forum on Trade & Investment was held in St. Petersburg in September 2013.Energy:Russia is an important partner in peaceful uses of nuclear energy and it recognizes India as a country with advanced nuclear technology with an impeccable non-proliferation record. Construction of the Kudankulam Nuclear Power Plant (KKNPP) Units 1 & 2 (VVER 1000 MW units) is an example of fruitful cooperation between India and Russia. KKNPP Unit 1 has become operational in July 2013, while its Unit 2 is at an advanced stage of construction. India and Russia also have ongoing cooperation in the field of hydrocarbons and power. ONGC Videsh Limited has substantive investments of over US$ 5 billion in two major oil and gas projects Sakhlin-1 and Imperial Energy Limited (Tomsk). Russian companies are engaged in several power plant and oil and gas projects in India.Outer Space: India-Russia cooperation in the field of peaceful uses of outer space dates backto about four decades. The two countries are currently engaged in cooperation onGLONASS and other space applications.Science & Technology:The Working Group on Science and Technology functioning under IRIGC-TEC, the Integrated Long Term Programme (ILTP) and the Basic Science Cooperation Programme are the three main institutional mechanisms for bilateral Science and Technology cooperation, while the Science Academies of the two countries promote inter-academy exchanges. ILTP which supports collaborative research in basic and applied sciences has resulted in establishment of 9 thematic centers in India and Russia and implementation of about 500 projects. In 2010, ILTP was extended for another 10 years with a renewed mandate innovation led technology programme. India-Russia Science and Technology Centre with a branch each in Delhi-NCR and Moscow was set up in 2011-12 in order to promote transfer of technologies and their commercialization. Two Programmes of Cooperation in the field of science and technology and in biotechnology were signed in October 2013 and are in the process of implementation.Cultural:There is a strong tradition of Indian studies in Russia. Jawaharlal Nehru Cultural Center at the Embassy of India, Moscow (JNCC) maintains close cooperation with leading Russian institutions including the Institute of Philosophy, Moscow, Russian State University for Humanities, Moscow, Institute of Oriental Studies, Moscow, Institute of Asian and African Studies at the Moscow State University, School of International Relations at the St. Petersburg University, Kazan Federal University, Kazan and Far Eastern National University, Vladivostok. There is a Mahatma Gandhi Chair on Indian Philosophy at the Institute of Philosophy, Moscow, while a Chair of Contemporary Indian Studies is at the Russian State University for Humanities, Moscow. About 20 Russian Institutions, including leading universities and schools, regularly teach Hindi to 1500 Russian students. Apart from Hindi, languages such as Tamil, Marathi, Gujarati, Bengali, Urdu, Sanskrit and Pali are taught in Russian Institutions. There is general interest among Russian people in Indian dance, music, yoga and ayurveda. JNCC conducts classes in yoga, dance, music and Hindi for approximately 500 students every month. There are regular cultural initiatives to promote people-to-people contacts between India and Russia. A Festival of Indian Culture covering 10 cities of Russia took place in 2013.

Russian PresidentDmitry Medvedevon thesets ofRa.One

ConclusionExcept for a very brief period in the early 1990s, Indias relations with Russia have been based on mutual trust and confidence. In the mid-1990s relations were restored to respectable levels which have been further strengthened since the signing of their strategic partnership in 2000. Currently, the main pillars of this relationship are strategic congruence, defence ties, nuclear power and hydrocarbons. The trouble for Indian policy-makers is that these areas still remain skewed in favour of Russia. The major challenge for both India and Russia is how to sustain this relationship in the absence of dynamic commercial ties. Future bilateral economic relations will depend on Russias importance to Indias developmental needs and vice versa. In the past, the USSR played an important role in Indias industrialization process. It had a comparative advantage in sectors like steel, which was central to its needs. India now has to assess where Russia has a comparative advantage. So far, India has been able to develop linkages in defence production, the oil and gas sector and in nuclear energy. Indian industry has already identified areas of mutual interest, namely information technology, pharmaceuticals, telecommunications, financial services, hydrocarbons, energy and power, oil and gas, food processing, financial consultancy, management services, textiles and diamond processing. The problems are well known, however, including lack of information, visa problems and logistical issues. Still, very little attempt has been made to address these issues. There was a lot of hope that a Eurasian northsouth trade corridor would be able to tackle some of the transportation problems. Owing to low trade volumes, however, the trading community has not yet developed this route. The strong political will in both countries to improve bilateral economic relations could have been converted into real economic gains if some imaginative initiatives had been taken, particularly when the Russian economy was booming between 2000 and 2007. With the global economic slowdown impacting in 2008/09, things have become more complicated for increasing India-Russia economic links, with trade declining from $5,420m. in 2008/09 to $4,550m. in 2009/10. Current Indo-Russian commercial relations are certainly not commensurate with existing potential. In the last few years India has signed bilateral trade deals with many partners and many are under negotiation. However, until Russia joins the World Trade Organization (WTO), it is highly unlikely that India and Russia will be able to sign any significant bilateral trade and economic co-operation agreements. In the last two decades the Indian and Russian economies have moved far from each other. With no major breakthrough, Indian and Russian economic ties will continue to depend on the arms trade, and nuclear and energy industry linkages. Russian exports to India are likely to be from the extraction industries and limited Indian exports will continue to be from low-volume, high-value and high-profit sectors. It is clear now that defence ties constitute the core of bilateral relations. Russia has provided the most advanced aircrafts, tanks, rocket launchers, missiles, frigates and submarines to India. Through licensed production of arms, missiles and aircraft, India is slowly developing its own defence industry. There have been problems in defence supplies concerning product support, cost escalations, delays in delivery and incomplete transfers of technology. Still, substantial arms imports continue to come from Russia. With a changing foreign policy orientation in India, the importance of arms imports from Russia may see a declining trend in coming years. There was some uneasiness in Russia when India signed a Strategic Partnership with the USA in 2006, and there was talk of Russia being elbowed out as Indias main arms supplier, particularly in the midst of troubled negotiations during 200810 over the sale of the Admiral Gorshkov aircraft carrier. Nevertheless, overall Russia remains an important factor in Indian foreign policy debates. Moreover, at the broadest level, the Indian elite believes that a strong Russia is important for maintaining a desired international equilibrium, both supporting the idea of multi-polarity and a rule-based international system, within which India can continue its rise. This remains Indias basic strategic synergy. Indias relations with Russia

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