Background

On July 8th and 9th, the Prime Minister of India, Narendra Modi, visited Moscow to participate in the 22nd India-Russia Summit with President Putin. The summit was a significant event in global geopolitics, allowing Prime Minister Modi and President Putin to strengthen the longstanding relationship between the two civilizational states. This relationship, rooted in historical and cultural ties, has weathered many global challenges. In light of these challenges, the summit provided a crucial platform for leaders to engage in constructive discussions and strategic dialogues focussed on enhancing cooperation in areas such as trade, energy, connectivity, defence, and technology. This event marked a significant milestone in the deepening ties between India and Russia, a relationship that has stood the test of time.

The visit drew significant attention and sparked varied reactions on the global stage. Notably, the Western media and strategic circles expressed substantial disappointment regarding this visit, criticizing the perceived inopportune timing of the visit, given the ongoing conflict between Russia and Ukraine. However, viewed from the Indian perspective, the Modi-Putin Summit was seen as a demonstration of India's strategic autonomy in the midst of global conflicts. Some scholars, however, argued that the timing of this assertion of strategic autonomy was inappropriate. Nonetheless, it is argued that strategic autonomy loses its significance if not upheld during the times of conflict. This debate underscores the complexity and significance of the visit.

Burgeoning Defence Cooperation

During the bilateral talks, there was a significant emphasis on strengthening defence and security cooperation between India and Russia. This is a crucial development, given the long-standing defence partnership between the two countries. Russia remains India's main weapons supplier, accounting for 36% of its arms imports.^[1] The discussions focussed on defence deals, joint military exercises, and technology transfers, with the aim of moving from a traditional buyer-seller relationship to a more integrated collaboration involving research, development, and production of advanced defence technology and systems. This shift signifies a deepening of the strategic partnership between India and Russia, and it's important to note that both countries stand to gain from this cooperation. The joint manufacturing of spare parts and components for Russian-origin arms and defence equipment in India, as part of the Make-in-India initiative, is important for enhancing defence ties. The establishment of joint ventures to meet the requirements of the Indian Armed Forces, and potentially for export to friendly nations, is a significant step forward. Given the changing geopolitical dynamics and the emerging security challenges in the region, it is crucial to prioritize new avenues of defence cooperation. The visit's emphasis on mutual defence and security interests highlights both countries' strong commitment to enhancing their strategic alliance.^[2]

The much-anticipated Reciprocal Exchange of Logistics Agreement (RELOS) between Russia and India remained unsigned. The agreement was intended to facilitate the exchange of logistical support for military purposes between the two countries, encompassing a wide range of critical services, including transportation, supplies, and other essential resources. Despite extensive discussions and thorough preparation, the agreement not being signed is a significant setback from the summit. Moving forward, it is crucial to analyze the reasons for this and implement more potent strategies to ensure successful agreements in the future.

Expediting the Proposed Connectivity Projects as an Alternative to Traditional Routes

The joint statement underscores the leaders' shared vision of enhancing cooperation on transport and connectivity. Their understanding of the need for a stable transport route and the development of productive production and marketing chains in Eurasia is a testament to their strategic vision and commitment to enhancing cooperation. They have stressed the implementation of the Chennai-Vladivostok (Eastern Maritime) Corridor and the International North-South Transport Corridor. They also plan to use the potential of the Northern Sea Route (NSR), a route that promises significant cost savings and reduced shipping times for goods traveling between Europe and Asia. The route's increased accessibility due to melting Arctic ice has sparked increased interest in its potential for commercial shipping and trade, offering a bright future for global trade. Both leaders have agreed to establish a joint working group on NSR, which will expedite the progress on this route.

After the Ukraine crisis and Russia’s focus on diversifying exports to the South, the International North-South Transport Corridor (INSTC) got the required impetus. Because this project is cost-friendly and saves time, it is the most favourable option for India’s exports to Eurasia and vice versa.

Most importantly, as the joint statement clearly mentions, these connectivity projects are free from any political agenda (unlike Chinese BRI). Their implementation will be based on the principles of transparency, broad participation, local priorities, financial sustainability, and respect for all nations' sovereignty and territorial integrity. Furthermore, these connectivity projects can reduce India’s dependence on traditional trade routes.

India and Russia have made a solid commitment to enhancing their trade and investment cooperation in the Far East and the Arctic region of Russia. The agreement on the India-Russia cooperation in trade, economic, and investment activities in the Russian Far East from 2024 to 2029, and the principles of cooperation in the Arctic zone of the Russian Federation, will boost the partnership. This commitment reassures both nations of a promising future for their economic growth.

Maintaining the Momentum in Bilateral Trade

Another critical dimension of the visit is the emphasis on boosting economic ties. India and Russia have been exploring new avenues for cooperation in trade and investments. Prime Minister Modi's discussions with Russian leadership paved the way for greater economic engagement and identified areas of mutual interest for fostering sustainable economic growth, offering a promising future for both nations.

Source: https://tradestat.commerce.gov.in/eidb/iecnt.asp
A new bilateral trade target of USD 100 billion by 2030 has been firmly set, significantly surpassing the previous target of USD 30 billion by 2025. The sharp increase in bilateral trade is primarily due to India's amplified imports of Russian crude at a discount following the US and Europe's oil sanctions on Russia after the Ukraine crisis. An agreement has been reached to prepare a robust "Programme-2030" for developing promising areas of economic cooperation. Furthermore, both leaders have pledged to expedite negotiations for a Free Trade Agreement (FTA) on goods between India and the Eurasian Economic Union (EAEU), which has been under consideration for a long time. Implementing this FTA would also benefit India by enhancing its trade with Central Asian countries. The leaders have also committed to facilitating the active participation of Russian businesses in the "Make in India" and "Atmanirbhar Bharat" programmes and encouraging Indian companies to engage in investment projects in Russia.^[3]

To maintain the current momentum in bilateral relations, both New Delhi and Moscow need to broaden their trade offerings. The increase in trade is currently reliant on Russian energy exports to India. Another vital challenge is to reach a consensus on a mutually agreed-upon payment system. Both sides have discussed the possibility of conducting transactions using their respective local currencies, which needs to be accelerated. These two issues are critical for maintaining the current level of trade between India and Russia.

Furthermore, energy cooperation is a prominent feature of PM Modi's visit. Both countries are keen on exploring opportunities for collaboration in the energy sector, including oil and gas exploration, renewable energy, and nuclear energy. This is aligned with India's objective of diversifying its energy resources and ensuring energy security.

Conclusion

In addition to defence, economic, and energy cooperation, the visit also underscores the importance of cultural and people-to-people exchanges. Strengthening cultural ties and promoting tourism can further deepen the bonds between the people of India and Russia. Prime Minister Narendra Modi's visit to Russia shows the enduring friendship and strategic partnership between the two nations. It reflects the commitment to advancing mutual interests and addressing global challenges through collaborative efforts. The outcomes of this visit are anticipated to bolster the multifaceted relationship and chart a course for sustained cooperation in the years to come.

References

^[1] ndia continues to be the world’s largest Arms imparter, Times of India, march 12, 2024. https://timesofindia.indiatimes.com/india/india-topped-worlds-arms-imports-in-2019-23-sipri/articleshow/108413336.cms#:~:text=The%20flurry%20of%20emergency%20procurements%20from%20countries%20like%20Russia%2C%20France,36%25%20of%20its%20arms%20imports.

^[2] Joint Statement following the 22nd India-Russia Annual Summit, MEA, July 09, 2024. https://www.mea.gov.in/bilateraldocuments.htm?dtl/37940/Joint+Statement+following+the+22nd+IndiaRussia+Annual+Summit

^[3] Ibid.
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