India and Russia: Taking Each Other Seriously

By Katherine Foshko

India and Russia’s partnership has much potential but both countries need to approach more specific avenues for cooperation.

In December, Indian Prime Minister Manmohan Singh went to Moscow for the 2011 India-Russia Summit. It was the 12th such meeting since the accession of Russian Prime Minister (formerly President) Vladimir Putin in 2000.

Putin has enjoyed steady visibility and popularity for his role in India – he is credited for reviving ties that had flagged in the 1990s. In geopolitical terms, the two countries are strategic allies
 whose wider goals—the 
pursuit of a multipolar world, especially in
 Eurasia, stability in Afghanistan—align, or at
 least do not clash, with
 one another. Russia supports India’s gaining
 full membership in the 
Shanghai Cooperation 
Organization while India 
has displayed none of 
the suspicion of Western
 countries at Putin’s recent proposal regarding 
the formation of a “Eurasian Union.” The relationship’s progress has 
recently been marked 
by two events: Russia’s 
completion of two nuclear reactors at the Kudankulam plant in Tamil Nadu—amidst protests from the local population, and the reciprocal easing of the visa regime for Indian and Russian businessmen to address their woefully underperforming bilateral trade and investment regime.

But are meetings enough to lift the Indo-Russia relationship from the benign neglect of the past? An unprecedented 30 Memoranda of Understandings (MOUs) were signed between the two countries 
at the summit in 2010, but many, such as 
the MOU “envisag[ing] joint production of modern oncological medicine in the Russian Federation and/or purchase of raw materials” have been too vague to lead to tangible results. The government-to-government exchanges that worked so well in years past are lately proving counter-productive or downright obstructionist, resulting in significant misunderstandings. For instance, even the stalwart Indo-Russian defense cooperation suffered a hiccup last year when India by–passed Russian MiG-35s for a $11bn defense procurement deal with the EU. Russia – India’s major arms supplier since the 1960s — subsequently reneged on its pre-planned war games with India in late May.

Soon after Putin’s September announcement of his presidential ambitions, a response in the Russia & India Report, a supplement of the official Russian government newspaper Rossiyskaya Gazeta, claimed that Russia had a diversification plan of its own: “… the power balance in the Russia-India-China equation may shift, especially in light of Vladimir Putin’s visit to China and resulting agreements on broadening of Russian-Chinese economic cooperation from traditional industries to high technology industries and signing $7bn deals.” This is more than an idle threat: China’s bilateral trade with Russia far exceeds India’s at $42.4bn and saw a 25% growth in 2009-10. That makes China Russia’s biggest trade partner. Moreover, China imports a large amount of Russian defense materiel. During Putin’s visit to China in October 2011, the two north Asian neighbors signed varied agreements on energy and hydropower, and also created a mutual investment fund dependent on contributions from private donors. Immediate results came in the form of sixteen economic and trade cooperation deals across a broad swath of sectors, including new machinery, electronics, and agriculture.

The delegations of leading businessmen from China and Russia who were brought to the state meeting and given the opportunity to interact with each other, were directly responsible for this result. Meanwhile, because of the lack of effective introductory mechanisms, Indo-Russian private cooperation is limited to small-scale trade and investment fore, none of them tied to state visits. India clearly needs to learn from the vigor and urgency present in the Russia-China relationship and, above all, from its focus on private sector engagement.

The relationship can take a step in that direction. Modernization of its own economy is at the top of the Russian leadership’s agenda, and will extend to its bilateral ties as well. This is the time for India to really push for sophisticated, high technology cooperation with its old friend and strategic partner. The best opportunities in the bilateral relationship which promise immediate results are those that incubate Russian science and hi-tech concepts by using India’s technological eco-system and infrastructure for joint projects. Information technology in particular is an area where India should capitalise on the plethora of educated and talented Russian professionals and Russia can benefit from the size as well as expertise of the Indian labor pool. For India, the size and scope of the teams and trials involved will not only promote innovation but also provide employment and encourage market growth in new technologies.

There are already some joint hi-tech projects in the pipeline. One such is a venture with the Skolkovo Innovation Center, a planned hi-tech business area just outside of Moscow and the emblem of the Russian government’s focus on innovation. An MoU between Tata Sons and Skolkovo Foundation involving joint research and development in communication and IT was signed in 2010. Yet its realisation, as that of the Skolkovo Center which has been under construction since 2009 and is yet incomplete, remains distant. Nanotechnology, as well as another pioneering science, biotechnology, has also been on the agenda since the 2010 summit given that the costs of commercialising and piloting nano and bio solutions are higher in Russia than in India. Clearly, a few MoUs on cooperation won’t make the cut; what’s needed is a more wide-ranging and systematic plan where the government can provide initial support and later allow the private sector to take over.

India and Russia can launch such initiatives as government-funded study trips for representatives of innovative IT businesses to visit their counterparts in India or Russia and, even more crucially, create the first-ever Indo-Russian IT forum. Private initiatives, co-sponsored by organisations like NASSCOM in the two countries, can add to the one existing joint IT center by encouraging the formation of joint ventures between IT organisations and scientists. This can create venture funds for collaborative Russian-Indian projects which would benefit from Indian relationships in the outsourcing industry and Russian relationships in higher-end computer science research in third countries. For instance, Russian specialists have experience in the automatisation of embedded systems programs, which they can coordinate with Indian IT professionals. Together the two can excel in such joint projects that involve scientific programming, to be used, among others, in space exploration – an area which India is trying to rapidly develop.

Now, in the midst of the global economic slowdown, is the time for the two countries to use their history of cooperation and political goodwill to address their respective economic needs and market gaps by boosting joint innovation. Only then will India’s most important—yet disconcertingly dormant—geopolitical partnership receive a much-needed lift.

Dr. Katherine Foshko is the Russia Studies Fellow at Gateway House: Indian Council on Global Relations, Mumbai.

The views expressed in this article are the author's own and do not necessarily reflect Fair Observer’s editorial policy.

*[This report was originally published by Gateway House.]

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