From the beginning of the Cold War, the USSR and India shared a strong strategic military, economic and diplomatic relationship. At the collapse of the Soviet Union in the early 1990s, Russia automatically inherited this close relationship. This bilateral Indo-Russian relations remained robust even after India decisively opened its doors to the West in the late 1990s. The traditional pillars of Indo-Russian cooperation have remained defence, politics and diplomacy, nuclear energy, space, and anti-terrorism activities. Lately economic cooperation has also been highlighted by mutually setting a target of $ 30 billion in bilateral trade to be achieved by 2025.
Both Indian and Russia are members of important international bodies like the United Nations, BRICS, G-20 and SCO and cooperate with each other in these groups on matters of shared interest. Russia publicly supports India’s bid to be given permanent membership of the UN Security Council. Currently Russia is the only nation, other than for Japan, to have a mechanism of annual ministerial level defence review with India. Further, the Indo-Russian Inter-Governmental Commission (IRIGC) is the largest governmental mechanism that India has with any nation. The IRIGC is represented by all Government Departments and meets annually. It acts as a de facto steering committee on Indo-Russian bilateral relations.
Military and Economic Relations
Military relations between the two nations are governed by the annual Defence Ministerial meetings and has a long historical perspective of more than half a century, starting with the erstwhile Indo-Soviet defence agreements. Russia inherited the Soviet role as an automatic substitute on the political collapse of the Soviet Union. In 1997, India and Russia signed a ten-year agreement for further military-technical cooperation.
This agreement encompassed a wide range of activities including purchase of weapon systems, joint development and production of armament and weapons, joint marketing of the same and cooperation in the development of advanced military technology. The last was later widened to include ‘joint research and development’ of high-end technologies. There was also to be shared training, Service to Service exchanges and the conduct of joint exercises. Two major programmes—the joint development and production of the Fifth-Generation Fighter Aircraft (FGFA) and the Multi-role Transport Aircraft has been agreed upon and is currently progressing, albeit at a slow pace.
On the economic front, bilateral trade is large and in fairly diversified segments such as, machinery, electronics, shipping, pharmaceutical, apparels, fertilisers, coal, aerospace, chemicals and tea and coffee products. In actual terms, bilateral trade accounted for $ 1.5 billion in 2002 and had increased seven-fold to $ 11 billion by 2012, in the span of just one decade. Both governments have placed the development of a bilateral Free Trade Agreement (FTA) on priority, while other initiatives like the simplification of customs procedures are also being put in place. Likewise, there are long-term supplier contracts in key sectors like oil and gas being introduced. Further, Russia is similarly committed to help in the ‘Make in India’ initiative of the current Indian Government, while being actively engaged in the development of the new Indian concept of ‘Smart Cities’ and the commercial nuclear sector.
The Gradual Loss of Focus
Indo-Soviet/Russian strategic relationship has been an enduring fact since early 1960s with defence trade being the mainstay, especially in the post-Cold War era. However, in the past decade or so Russia’s share of military sales to India has been on the decline. During this period, India with its newfound and enhanced geo-political status has created some amount of strategic rapprochement with the United States. New Delhi has also become a welcome visitor to other Western capitals as an acceptable buyer of military hardware. These developments have unconsciously permitted the defining bilateral Indo-Russian relations to be gradually shifted to the backburner in the broader Indian appreciation of the emerging geo-political environment.
This movement has not been the result of an overnight shift in priorities but an evolution that has been in the making for more than a decade. Its genesis could be traced back to the Indo-US 123 Agreement that was an initiative of the second George W. Bush administration aimed at moving forward the concept of an Indo-US strategic partnership. As an aside, this softening of the US approach to India could also become the defining foreign policy legacy of the second Bush Presidency, considering the on-going mess that it created and left behind in the Middle-East.
From an Indian perspective the breakthrough in its relationship with the US was a watershed moment in its international defence and security engagement. Sanctions against India were lifted leading to an influx of foreign aerospace and defence manufacturers being given access to the Indian arms market. Within a decade the value of the Indo-Israeli defence trade had crossed $ 10 billion and the Indo-US trade had increased to $ 9 billion. As a corollary, this had a direct and adverse impact on Indo-Russian defence trade that had been the centrepiece of strategic cooperation and mutual support between the two nations. Even so, Russia still has a very high defence trade quantity in absolute terms and the recently concluded agreements may continue to maintain the trade at a reasonable level if they are brought to fruition. Currently the only running programme is that of the FGFA which is worth about $ 11 billion.
In recent years the larger Indian defence contracts have all been snapped up by Western defence manufacturers: $ 7 billion for 36 Rafale Medium Multi Role Combat Aircraft (MMRCA) by the French Dassault Aviation; $ 4.1 billion for 10 C-17 Globemaster strategic lift aircraft and $ 2.1 billion for eight P-8I maritime Patrol aircraft, both by Boeing in the US. It is significant that these aircraft will all be replacements for Russian aircraft that are in service with the Indian Air Force and Navy—the Mig-21 ‘Fishbed’, Il-76 ‘Candid’ and the Tu-142 ‘Bear’. In other on-going tenders, requests for information and evaluation trials, like the competition for the Multi-Role Tanker Transport and both attack and heavy lift helicopters, the Russian platforms that have been offered have fared poorly. It seems highly likely that Russia will lose the decades-ling ‘preferred’ status within the Indian arms industry.
The Russian Reaction
Even a casual observer will be able to notice trouble brewing in the horizon for the bilateral relationship. If Russia perceives that it has lost its ‘preferred’ status it will also downgrade its relationship with India from ‘exclusive’ to ‘preferred’ with all that such a move would imply. This will have to be seen as a pragmatic decision, especially considering that India has already started to broaden its own military import-base, sending a clear signal to Russia that it is no more in an ‘exclusive’ situation.
The basic fact is that Russia needs to sell weapon systems. The reasons for Russia being in this situation are clear to identify, even though they are a Soviet legacy. The military-industrial complex that Russia inherited at the breakup of the Soviet Union has grown to represent 20 per cent of all manufacturing jobs in the country, employing nearly three million workers. The faltering economy at the breakdown of the Soviet Union led to a reduction in military expenditure as a percentage of the GDP from 14.1 in 1993-94 to a mere 3.8 today. With such a reduction in the domestic market, the mammoth military-industrial complex is increasingly dependent on exports to survive. Russia cannot deny the economic need to maintain a high level of military exports anymore.
The Russian reaction to India’s gradual drift towards the West has been to revive a two-year old agreement of cooperation with Pakistan and to take a decision to supply Mi-35 ‘Hind’ attack helicopters to them. Till the signing of this deal Russia had refrained from supplying lethal military hardware to Pakistan in deference to the strained Indo-Pak relations. This unofficial embargo was also a legacy of the Indo-Soviet Treaty of Friendship Cooperation and Peace signed in 1971.
The Pakistan Factor
Until recently the bilateral relationship between Russia and Pakistan was coloured by the Cold War legacy in which Pakistan was treated as a die-hard US ally. Pakistan’s support for the insurgency that defeated the Soviet occupation of Afghanistan was always a sticking point in improving bilateral relations. After decades of frosty relations, Russia is reaching out to Pakistan, creating media speculation that Russia was using Pakistan as a tool to impress upon its long-standing ally India, the need to improve mutual bilateral relations. There have been slow developments in the political, defence and economic spheres between Russia and Pakistan for the paste few years. In the wake of the Western sanctions, Pakistan had provided assistance to ensure food security in Russia.
Russia conducted a joint exercise with Pakistan from 27 September to 10 October to practise counter terrorism and anti-drug trafficking operations. The timing is particularly noteworthy. It was held in the middle of the period of heightened Indo-Pak tensions and rhetoric between the countries after the terrorist attacks on the Indian Army formation stationed at Uri in Jammu and Kashmir. The timing of the Russian overture to Pakistan could not have been more offensive to India. Russian diplomats are stating that the exercise was cooperation in counter terrorism and trying to dilute its significance. However, it is a clear indication of a re-evaluation of Russian foreign policy in the region. The truth is that Russian arms policy in the region is being revised and the exercise and sale of helicopters is a not so subtle warning to India as to how events could play out in the future.
Russia has openly put the agenda of a common interest with Pakistan in economic and security matters on the table. The security aspect is difficult to fathom, unless it is meant to keep the underlying instability between India and Pakistan percolating. The other side of the equation, from a Russian perspective, is its concern regarding the turmoil in Afghanistan. The US withdrawal has created a power vacuum that is facilitating the re-emergence of the Taliban. Russia fears that religious fundamentalism and terrorism that will accompany the rise of the Taliban could spill over to Central Asia, bringing unwanted instability to its ‘near abroad’ and spheres of influence.
These developments indicate that the Indo-Russian bilateral relationship could be entering a new and uncharted phase. However, both sides state that their relationship is set in stone and cannot be influenced by third parties. The possibility of a cloud over the friendship is being carefully down played in both capitals. Even so, the shadow of the burgeoning Indo-US strategic partnership is very visible irrespective of the angle from which the Indo-Russian relationship is viewed. Emerging new synergies are becoming visible. Ground realities also points in this direction. In the recently concluded BRICS summit in India, the Russian President Vladimir Putin made no mention of terrorism, even as the Indian Prime Minister Narender Modi as the host pointedly referred to Pakistan as the ‘mothership’ of terrorism. This could be seen as a direct, if minor, tap on the wrist for India. The misgivings regarding a downslide in the bilateral relations have been further stoked by an overactive Indian media.
For its part, Pakistan is leveraging the newfound friendship with Russia to signal its unhappiness at the downgrading of its strategic relevance by the US. Further, the improving Indo-US relationship has aggravated Pakistan’s anxiety at being left with only the China card to play. By cosying up to Russia, Pakistan is indicating to the US that it still has foreign policy options available. Whether this bluff will be called or not is a moot question.
Russia has further created discomfiture for India, almost like a cherry on top of the ice cream, by its efforts to improve Sino-Russian military cooperation. It has sold the Su-35 fighter aircraft, a heavily upgraded derivative of the Su-27 ‘Flanker’, the S-400 air defence missile system and four Lada-class submarines to China. Considering the mistrust that India has towards Chinese intentions, this action is likely to be viewed sceptically in the policy circles in New Delhi. It might create the impetus for India to turn further away from Russian military purchases: the purchase of Rafale fighter aircraft and the request for information regarding local manufacture of fighter aircraft could be seen as a manifestation of this rift.
India is correct to believe that Russia must clearly articulate its strategy for engagement in South Asia, which has not been done so far. This situation gives the impression that more than an open bilateral relationship for mutual benefit is being fostered by Russia in its overtures to Pakistan and China. Russian intentions are opaque, at least for the time being. China and Pakistan share an ‘all-weather’ friendship primarily aimed at challenging India’s national interests and undermining its security and economic development. It is definite that Russia is aware of this situation. In order to ensure that its Pakistan initiative is not wrongly construed in the Indian polity, Russia needs to create the necessary impetus to reassure and re-build Indian confidence. By equating Pakistan and India in terms of bilateral relationships, Russia is downgrading its ‘special’ relationship with India. The reason seems to be obvious—India’s tilt towards the US in recent dealings. However, moving away from the special relationship is bound to be detrimental, both geo-strategically and economically, for both the nations.
If Russia had carried out a pragmatic analysis of its policy options in South Asia it would have realised that long-term partnership would be better with India than with either China or Pakistan. China’s track record of reverse engineering the Su-27 ‘Flanker’ to produce the ‘indigenous’ J-11B fighter aircraft should have acted as a warning to Russia for future export of high-technology hardware. Pakistan is a proven supporter of religious fundamentalism and terrorist organisations and Russia’s bilateral engagement is a strategic gamble, at best. On the other hand, simultaneous engagement with China, Pakistan and India is indicative of Russia’s intent to be engaged in South Asia far more than has been the case so far. However, Russia’s economic realities have made short-term realpolitik trump long-standing and mutually profitable relations.
The Current Situation
There is no doubt that the Soviet Union assisted India in many ways during the early years of the latter’s independent history, moving it towards self-reliance, becoming a trusted ally and true strategic partner. In the contemporary world of geo-political turmoil and with the scare of economic recession being very real in many parts, India’s rapid economic growth has provided it with increased self-confidence. At the same time Russia has emerged on the world stage as a counterpoint for the faltering Western intervention in the Middle-East. Both India and Russia are playing a larger role than before on the global geo-political environment and both the nations support the creation of a multi-polar world. The contemporary geo-political situation is complex and fast-changing, which necessitates nations having to diversify their foreign policy options. At the same time they will also have to maintain trusted relations on an even keel and nurture them to ensure a base-level stability.
Russia plays a major role in the Indian energy sector, much as the erstwhile USSR did. India is energy deficient and Russia is energy surplus, which makes for a natural alliance. Russia is active in providing assistance in the hydrocarbon and nuclear sectors while India is keen to penetrate the Russian energy market. India’s largest investments abroad in the energy sector are both in Russian projects—a 20 per cent stake in the Sakhalin energy project amounting to $ 2.8 billion and the outright purchase of Imperial Energy, a London-listed oil major in the Tomks region.
The weakest link in the bilateral relations remains trade and economic ties. Bilateral trade is low and there is opportunity to boost the partnership, especially in the private sector. The attempts being made to improve economic partnerships, both governmental and private sector, could provide a new direction to the relationship. The Comprehensive Economic Partnership Agreement (CEPA) is an initiative aimed at increasing India’s economic outreach to the broader Eurasian region through Russian ties with Belarus and Kazakhstan.
There is also an expectation that Russia will invest heavily in the Delhi-Mumbai Industrial Corridor that plans to connect nine mega industrial complexes spread across six Indian states. Russia is keen to create an economic and trade forum outside of the Western Bloc, especially after sanctions were imposed on it by the US and its allies. There is great encouragement from Russia for the RIC (Russia-India-China) and BRICS groupings. If the nations involved played a straight game, opportunities for bilateral and multi-lateral partnerships to grow and flourish are abundant.
The defence cooperation between India and Russia has stagnated somewhat in the past few years. The Indo-Russian partnership is facing some challenges that need to be ameliorated. Russia is facing intense competition in the Indian defence market from the US, France and Israel. Even so, Russia continues to enjoy a unique position of exclusivity, although the status should not be taken for granted. Russia’s position of pre-eminence can be, and in some cases seems to be getting, undermined by the conscious effort of powerful Western nations acting in concert. It is necessary for both India and Russia to watch out for the thrusts aimed at breaking their strategic relationship. Indo-Russian bilateral ties are built on strong foundations. However, maintaining an uneasy status quo in defence and economic relations is not sufficient for the relationship to progress, especially when sufficient competition exists to thwart forward momentum. Vested interests will always be ready to drive a wedge between the partners.
The emerging partnership between Russia and China will be a concern for India. In the contemporary geo-political environment, the Sino-Russian cuddle can only be considered as a necessary anti-US alliance. Moscow has relaxed the semi-embargo that it had placed on advanced weapon technology exchange with China and also conducted a joint naval exercise in the South China Sea at the height of the tensions in the region following the International Tribunal ruling against China. Although India has officially stated that it accepts the need for Russia to engage with China and Pakistan, there is obviously internal concern regarding the direction of Russian foreign policy advances. Combined with China’s aggressive posture towards India and its incursions into the Indian Ocean, alarm bells must be ringing in New Delhi. India currently has no clear answer to the question, ‘What are the core interests that Russia is pursuing in its new South Asian engagement intitiatives?’
The on-going and at times rapid developments in the global economic and political environment will challenge the veracity of all bilateral relationships. The current shift towards a multi-polar world will add to the complexity and increase the geo-strategic instability. In turn, these events will create an upsurge in the focus on national interests by individual nations. It is only natural that the Indo-Russian partnership will also evolve contextually. India faces internal socio-economic challenges of a very high magnitude. The political establishment is aware that these need to be resolved in the short-term future if they are not to affect bilateral relations with any other nation. Further, India needs a collective approach constituted of multiple bilateral relations to develop. Its biggest advantage is that while becoming economically stronger, it has the potential to carry smaller economies with it in its upward trajectory. India as an emerging power understands that open and trusted cooperation is the key to achieving this.
India however, cannot expect the rest of the world to wait while its gets it act together. Even trusted and long-term allies like Russia will be impatient and have different domestic issues to address. However, the Russian overtures towards China and Pakistan must be of obvious worry to the strategic establishment in India. In this context, India’s relations with China remains a paradox since it is characterised by political and military abrasiveness and fairly strong, mutually beneficial economic relations. Russian move towards improving its relations with China will upset Indian calculations of balancing the South Asian geo-strategic environment in its favour. In an extreme case, this situation could prompt or motivate India to veer further towards the US. However, such a move in itself may not be in India’s longer term interests.
Any further Indian move towards the ‘West’ carries with it the real risk of the long-standing Indo-Russian partnership spiralling downwards. It is now necessary for both nations to widen the base of contact and to draw up a mutually agreed upon roadmap and work jointly to make that roadmap function. Stagnation of the relationship through taking it for granted breeds familiarity and could lead to contempt—an unhealthy situation for any relationship. The 17th Indo-Russian Annual Summit, conducted on 15 October on the sidelines of the BRICS Meet, has injected the much-wanted energy serum into the bilateral relationship. A number of pending defence deals were concluded and agreements to deepen cooperation in a range of disparate sectors actioned. These include nuclear power, cyber security, trade, investment, hydrocarbons, smart cities and space. The immediate aftermath of these initiatives has been to dispel any doubts that remained regarding the robustness and health of the Indo-Russian partnership.
Even with the slight upswing that the announcements have created in the general perception, a long-term vision for the future of the relationship is still missing. It is apparent that guidance from the highest level of political leadership is needed to shepherd the partnership forward with adequate energy. Only a realistic assessment and acceptance of necessity from both the nations will avoid the relationship meandering into the wilderness where it will wither and dry. Undoubtedly it will be necessary to smoothen the occasional ripple that will upset the equanimity of the partnership, before the ripples develop into waves with greater consequence.
The uncertainties and compulsions of emerging geo-political situations can be seen at play, influencing and shaping the Indo-Russian strategic partnership. In the current time of geo-strategic volatility, every nation must look out for its own interests, continually mentoring long-standing bilateral and multi-lateral relations and monitoring the altering global pecking order and its own status within it. Attempting anything else will not serve the national interest.