Thursday, 11 December 2014


Russia and India renew frayed ties
Russia pledges 10 more nuclear reactors in India


Russia and India agreed on Thursday to renew their frayed relationships in energy, defence and trade, with leaders Vladimir Putin and Narendra Modi promising construction of at least 10 more Russian nuclear power reactors in India over the next two decades.

“Today, we have outlined an ambitious vision for nuclear energy,” Mr Modi announced at a joint news conference with Mr Putin in New Delhi.

At a time of increasing economic isolation of Russia by the west, Mr Putin has been keen to strengthen relationships with emerging market trading partners. India, for its part, has neither criticised nor supported Russia’s annexation of Crimea and its involvement in eastern Ukraine.

The recently commissioned 1,000-megawatt first unit of the Kudankulam Nuclear Power Plant in south India, built by Russia, has already increased Indian nuclear electricity output by a fifth.
Another reactor is due to begin operating next year, with two more to follow.

In a tacit acknowledgment of the cost overruns and long delays hampering previous projects, the agreement commits India to finding a site in addition to Kudankulam for building more reactors. The agreement says both sides will seek “to minimise the total cost and time of construction of nuclear power units”.

During the cold war, Russia was considered a loyal friend of India and became its main arms supplier, but in recent years New Delhi has sought to broaden its range of alliances and moved closer to the US and its Asia-Pacific allies Japan and Australia.

Mr Modi struck up an apparently warm relationship with President Barack Obama on his visit to Washington this year and will host him at India’s Republic Day ceremonies in January. The US, in turn, is eager to boost trade and defence ties with India, and last year delivered more weapons to India than any other supplier.

Russia has identified India as a market that could help offset weakening trade, investment and diplomatic ties with the west following the crisis in Ukraine. Since the onset of western sanctions against Russia earlier this year, Mr Putin has emphasized the need to crank up Russian trade, investment and security co-operation with Asian nations.

China has become the focus of this push with bilateral agreements to build two massive pipelines for Russian gas exports. But Russian officials say Moscow must balance its reliance on Beijing with increased ties to other Asian nations, naming South Korea and Singapore as potential sources of foreign investment and technology, and India as another important energy market, arms buyer and security partner.

Moscow also hopes to see the Shanghai Cooperation Organisation evolve into a more meaningful security alliance by having India, Pakistan and Mongolia join next year.

According to Samir Patil, national security expert at Indian think-tank Gateway House, delays in Russian arms supplies, defective spare parts and arguments over cost have led to “troubled defence ties” between India and Russia since the cold war and opened the door to US and Israeli manufacturers.

Mr Modi nevertheless said “Russia will remain our most important defence partner” and announced that Russia had offered full manufacture in India of one its helicopter models. He also recalled that his first trip outside Delhi as prime minister was to the $2.3bn Indian aircraft carrier Vikramaditya, a modified Kiev-class Soviet vessel.

Among the 20 documents signed during Mr Putin’s one-day visit to India were several relating to co-operation in oil and gas, including one envisaging a joint study for a Russia-India pipeline and another between Rosneft and Essar for the supply of Russian oil to Indian refineries over the next 10 years.

Mr Modi described collaboration in oil and gas to date as “disappointing”. Mr Putin – in an earlier interview with news agency Press Trust of India – said bilateral trade between the two countries fell by a tenth last year to $10bn. “It is important to reverse this trend,” he said.

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