OPINION> Commentary
Medvedev's visit to India redefines relations
By Swaran Singh (China Daily)
Updated: 2008-12-19 07:51

Early this month, Russian President Dmitry Medvedev became the first leader to visit India after the Nov 26 terrorist attacks on the country's commercial capital, Mumbai. In spite of multiple hurdles Medvedev, managed to strike a cord with India's leaders and to sign 10 important agreements.

In Medvedev's words, his three-day visit to New Delhi was aimed at redefining the tenor of Russia-India relations beyond the traditional military-centric, buy-and-sell, hard-cash format, to a far more broad-based strategic partnership in tune with his resolve to revive Russia's stature as a global power.

Accordingly, their deliberations in New Delhi sought to convey how Russia-India relations had moved beyond nuclear and defense cooperation and onto new areas of technology transfers and joint production in sectors from metals and machine building to banking and finance management, power-generation, pharmaceuticals, space explorations, biotechnology, information technology, hotels and tourism.

The Russia-India Intergovernmental Working Group on Countering Terrorism in New Delhi on Tuesday and Wednesday took stock of the situation arising out of the terrorist strikes on Mumbai.

Exuding a body language of energy and enthusiasm - something never witnessed in Moscow before Vladimir Putin - Medvedev held a series of meetings with the leadership in India. He held discussions with Indian Prime Minister Manmohan Singh, chairperson of the ruling United Progressive Alliance Sonia Gandhi, and leader of the Opposition Lal Krishna Advani. He also paid a visit the cemetery of the father of the nation, Mahatma Gandhi, and participated in the closing ceremony of the "Year of Russia in India".

This picture of dynamism needs to be viewed against the backdrop of the recent US-Russian military showdown in Georgia, which has been described by experts as the return of Cold War politics, the US election of Barack Obama in the name of "change" and continued recession in the developed Western countries which has since brought emerging powers like Russia and India to the center of global initiatives.

More substantially, among the 10 pacts signed during the visit, the highlight was for building four nuclear power stations in Kudankulam in the south Indian province of Tamil Nadu. Two of these are already under construction.

However, briefing the media at the end of Medvedev's visit, the Russian ambassador to India said that there remained many more possibilities and that Moscow was capable of supplying 10 more nuclear plants to India in coming years. What is of interest is that he also underlined that fuel assurances and guarantees will be built into all such nuclear reactors supplied to India.

Indeed, the two sides had already signed during the visit a $700 million pact for the supply of nuclear fuel, which will be available for use in all of India's nuclear power stations. This means that the Nuclear Power Corporation of India will be keen to implement its plans to acquire $14 billion worth of reactors from French, US and Russian companies.

The other deals signedt by the Russian president included one of $1.2 billion for 80 M-17 V-5 medium-lift utility helicopters. These are expected to replace India's outdated 50 Mi-8 and boost India's operations in high-altitude regions like Siachen and Ladakh.

Besides, the two have opened deliberations on India buying Russia's state of the art, T-90 main battle tanks, and Russia leasing and/or entering into joint building of nuclear powered Akula-II class attack K-152 "Nerpa" submarines.

The two also declared their resolve to expedite their joint development and production of Multi-Role Transport aircraft and Fifth-Generation Fighter aircraft. Similarly, underlining their strategic cooperation in space, the Russian space agency and the Indian Space Research Organization signed a memorandum of understanding for cooperation in joint space explorations, including plans to send two Indian astronauts into space on board a Russian Soyuz spacecraft by 2013.

At the same time, India also brought to the table their long-standing issue of rapid cost-escalation in its purchase of Russia's aircraft carrier Admiral Gorshkov. High costs and delays in refitting have become a matter of concern. India had signed a deal in January 2004 for $1.5 billion. This has now gone up by another $650 million.

Also, this carrier was originally to be refurbished and equipped with 16 MiG-29 fighters and was scheduled to be delivered to India by the end of August this year.

The two have been talking of raising their bilateral trade to the level of $10 billion by 2010, which now seems reachable with their trade for 2007 expected to be more than $7 billion. The two, however, also need to focus on investments.

According to the Russian Statistics Service, the accumulated Indian investment in Russia totaled $821 million while the cumulative foreign direct investment from Russia up to August this year was only $144 million. Energy hungry India sees Russia's oil and gas fields as one more sector for expanding mutual reciprocity and cooperation.

Indian Oil & Natural Gas Corporation (ONGC) Videsh Limited has already raised a bid of $2.1 billion for the UK-based firm, Imperial Energy Plc, which has assets and proven reserves of about 920 million barrels in Russia's Siberian region.

In spite of oil prices tumbling from $150 to below $50 per barrel, India has decided to go ahead with this deal for two reasons.

First, given India's growing dependence on imports of oil and the drying up of its domestic sources, this makes a strategic investment. Second, despite initial fears that Russia may ask for up to a 40 percent stake as compensation to regularize this takeover by India, Moscow has agreed to facilitate this transfer on a "as it is basis".

Russia and India are keen to coordinate their strategies in dealing with the threat from the financial meltdown. Both believe they have strong fundamentals and large domestic demand to be able to steer clear from the impending financial tsunami, and catapult themselves as major leaders by helping others to override the crisis. The two remain focused on restoring and strengthening their former close ties and believe that this summit had opened doors for new opportunities.

The author is associate professor, School of International Studies, Jawaharlal Nehru University

(China Daily 12/19/2008 page9)