Back to the Future: Defence and Energy Warm Indo-Russian Ties

Thursday, December 11, 2014
Putin and Modi at their summit in Delhi (photo: Reuters)

Russian President Vladimir Putin visited India for one day, and was rewarded with a helicopter deal worth $3 billion and energy deals with the energy-hungry Indian economy. Prime Minister Narendra Modi also reassured Putin that Russia would remain India's top defence supplier, even though Delhi's options have widened since the end of the Cold War.

Both leaders met on Thursday for their first formal bilateral summit since Modi was elected in May. The two sides signed billions of dollars of deals in nuclear power, oil and defence.

These include state-owned Rosatom agreeing to build 12 nuclear reactors in India, oil major Rosneft signing a 10-year crude supply deal with Essar Oil, and India agreeing to assemble 400 Russian multi-role helicopters a year.

Deputy Prime Minister Dmitry Rogozin said the deal related to the Ka-226T, a light multi-role helicopter built by Russian Helicopters that can be used for search-and-rescue operations in mountainous areas.

This helicopter deal is important for Modi, whose Make in India campaign seeks to build India's defence production capacity.

"Even if India's options have increased, Russia remains our most important defence partner," Modi told reporters after the summit.

According to Reuters, Putin’s visit to Delhi comes as the Kremlin grapples with a sliding oil price and an economy that has been undermined by Western sanctions over its annexation of Crimea and support for rebels in eastern Ukraine.

As Russia’s ties with the West deteriorate, Putin appears keen to promote bilateral trade with Asian economies like India and China as a counterweight.

Energy diplomacy is a key element in this push. Modi and Putin presided over the signing of a “Druzhba-Dosti” vision statement setting out a roadmap for cooperation in the sphere of nuclear power.

Rosatom said that it would supply 12 nuclear energy reactors for India over 20 years, though Putin said that Russia could eventually supply India with 20 nuclear reactors.

"We highly appreciate the friendship, trust and mutual understanding with Indian partners," the Russian President said in his statement to journalists.

A 1,000-megawatt reactor is already operating at the Russian-built Kudankulam power station in Tamil Nadu, with a second due on-stream in 2015. Indian officials said a total of six reactors will be built at Kudankulam. A further six will follow at a site to be decided.

According to Reuters, other deals signed on Thursday covered oil supply, infrastructure and an increase in direct diamond sales to India by Russian state monopoly Alrosa.

In defence, India and Russia are expected to move ahead with long-delayed projects to develop a joint fifth-generation fighter jet and a multi-role transport aircraft, in addition to the chopper deal.

- Karan Singh

To Learn More:

Modi to Putin: Russia to stay India's top defence partner (by Douglas Busvine and Denis Dyomkin, Reuters)

Putin backs Make In India with copter, nuclear deals (by Jayanth Jacob, Hindustan Times)

India-Russia ink new nuclear-deal; Moscow most important defence partner, says Modi (by Shubhajit Roy, Indian Express)


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