Indo Russia

Old Friend New Relations: Indo-Russia Relation in 21st Century
Fakir Mohan University, Vyasa vihar, Balasore Page 1

Chapter - I
Introduction
Indo-Russo relations refer to the bilateral relations between the Republic of India and the
Russian Federation. During the Cold War, India and the Soviet Union (USSR) enjoyed a strong
strategic, military, economic and diplomatic relationship. After the collapse of the USSR, Russia
inherited the close relationship with India, even as India improved its relations with the West
after the end of the Cold War.
Traditionally, the Indo-Russian strategic partnership has been built on five major components:
politics, defence, civil nuclear energy, anti-terrorism co-operation and space. These five major
components were highlighted in a speech given by the Indian Foreign Secretary Ranjan Mathai
in Russia. However, in recent years a sixth component, economic, has grown in importance with
both countries setting a target for US$20 billion in bilateral trade by 2015. In order to facilitate
this target both countries are looking to develop a free trade agreement. Bilateral trade between
both countries in 2012 grew by over 24%.
The powerful IRIGC is the main body that conducts affairs at the governmental level between
both countries. Both countries are members of many international bodies where they jointly
collaborate closely on matters of shared national interest. Important examples include the UN,
BRICS, G20 and SCO where India has observer status and has been asked by Russia to become a
full member. Russia has stated publicly that it supports India receiving a permanent seat on the
United Nations Security Council. In addition, Russia has expressed interest in joining SAARC
with observer status in which India is a founding member.
India is the second largest market for the Russian defence industry. In 2004, more than 70% of
the Indian Military's hardware came from Russia, making Russia the chief supplier of defence
equipment. India has an embassy in Moscow and two consulates-general (in Saint Petersburg and
Vladivostok). Russia has an embassy in New Delhi and four consulates-general (in Chennai,
Hyderabad, Kolkata, Mumbai).


According to a 2013 BBC World Service Poll, 42% of Russians view India positively, with only
9% expressing a negative view.
India-Russia Relations A Prelude
A cordial relationship with India that began in the 1950s represented the most successful of the
Soviet attempts to foster closer relations with Third World countries. The relationship began with
a visit by Indian Prime Minister Jawaharlal Nehru to the Soviet Union in June 1955 and
Khrushchev's return trip to India in the fall of 1955. While in India, Khrushchev announced that
the Soviet Union supported Indian sovereignty over the disputed territory of the Kashmir region
and over Portuguese coastal enclaves, e.g. Goa.
Indias relationship with the erstwhile Soviet Union and the Russian Federation is founded on
trust and mutual interests. In the early years of this relationship, India greatly gained from the
Soviet Union in developing its core industries and laying the foundation for future growth.
During the Cold War years, India depended on the Soviet Union for its unflinching support in
protecting its vital interests in a number of fields including Jammu & Kashmir. Many of Indias
scientific and technological accomplishments particularly in the field of space and nuclear
energy became possible because of strong support extended by the Soviet Union. The Indo-
Soviet Friendship Treaty of 1971 provided a framework for deepening this cooperation. Indias
defence forces owe much to the technology, equipment, training and product support available
from the Soviet Union and its successor states. The military-technical cooperation between India
and Russia has been the center piece of the bilateral relationship and will continue to remain
important in years to come.
The decade of the Nineties was marked by developments which had profound implications for
geopolitics and also impacted India-Russia relations. In the wake of the Soviet Unions
disintegration, Russia remained focussed on coping with its own internal turbulence. The Soviet
military industrial complex disintegrated. Russia passed through a difficult transition to market
economy. This was disruptive for defence supplies to India, which was itself introducing
economic reforms and diversifying its international interactions. Combined with availability of
new sources of defence supplies particularly in the west and Israel, India Russia defence
relationship began to undergo changes. The Russian state itself began to look westwards and the


two countries seemed to drift from each other for a while. However, India has always recognized
the importance of Russia and repeatedly emphasized that its relationship with one great power is
not at the cost of its relations with its erstwhile friends and partners. This approach underpins
Indias policy of forging strategic partnerships with all the great powers i.e. the United States, the
Russian Federation, Peoples Republic of China, the European Union and Japan. Simultaneously,
India continues its efforts to deepen cooperation with member countries of SAARC, ASEAN and
IBSA. Indias policy is based on developing constructive and mutually beneficial cooperation
with all countries in its region and other parts of the world. The relationship between India and
Russia needs to be nurtured in the changing global environment. Traditionally, both countries
have favoured a rule based international order with both subscribing to the notion of a multi-
polar world. Despite new sources for defence supplies, Russia remains a crucial partner for India.
With its rapid economic growth, Indias energy needs will continue to multiply. India will be a
growing market for hydrocarbons as well nuclear energy and thus, energy offers considerable
potential for mutually beneficial cooperation. Indias globalizing service industries and corporate
can help diversify the Russian economy and develop bilateral trade.

It was in this background that the IDSA organized a dialogue between scholars from Russia and
India to deliberate on a range of issues concerning the two countries. These included among
others, Russias approach to the West, the Iranian nuclear issues, the situation in Afghanistan-
Pakistan, the issues of Intellectual Property Rights, future of Russia-India bilateral cooperation.
The dialogue was in a way a stocktaking of developments on these issues and an exploration of
the emerging opportunities to deepen this strategic partnership. Indo-Russo relations refer to the
bilateral relations between the Republic of India and the Russian Federation. During the Cold
War, India and the Soviet Union (USSR) enjoyed a strong strategic, military, economic and
diplomatic relationship. After the collapse of the USSR, Russia inherited the close relationship
with India, even as India improved its relations with the West after the end of the Cold War.
politics, defence, civil nuclear energy, anti-terrorism co-operation and space.(1) These five major
in Russia(1). However, in recent years a sixth component, economic, has grown in importance
with both countries setting a target for US$20 billion in bilateral trade by 2015(2). In order to


facilitate this target both countries are looking to develop a free trade agreement(3)(4)(5).
Bilateral trade between both countries in 2012 grew by over 24%. The powerful IRIGC is the
main body that conducts affairs at the governmental level between both countries. Both countries
are members of many international bodies where they jointly collaborate closely on matters of
shared national interest. Important examples include the UN, BRICS, G20 and SCO where India
has observer status and has been asked by Russia to become a full member. Russia has stated
publicly that it supports India receiving a permanent seat on the United Nations Security
Council. In addition, Russia has expressed interest in joining SAARC with observer status in
which India is a founding member. India is the second largest market for the Russian defence
industry. In 2004, more than 70% of the Indian Militarys hardware came from Russia, making
Russia the chief supplier of defence equipment. India has an embassy in Moscow and two
consulates-general (in Saint Petersburg and Vladivostok). Russia has an embassy in New Delhi
and four consulates-general (in Chennai, Hyderabad, Kolkata, Mumbai) (11). According to a
2013 BBC World Service Poll, 42% of Russians view India positively, with only 9% expressing
a negative view. The ongoing collaboration in the field of science & technology, under the
Integrated Long-Term Programme of Co-operation (ILTP) is the largest co-operation programme
in this sphere for both India and Russia. IndiaRussia relations in the field of culture are
historical. Prominent Russian painter and philosopher Nicholas Roerich was influenced by the
philosophy of Ramakrishna and Vivekananda, the poetry of Rabindranath Tagore, and the
Bhagavad Gita. He spent his last life in Kullu, Himachal Pradesh. The 130th birth anniversary of
Nicholas Roerich and 100th birth anniversary of Svetoslav Roerich were celebrated in India in
October 2004. Notable Russian Indologists like Eugene Chelyshev and Gury Marchuk were
awarded the Sahitya Akademi Fellowship by the Government of India. Days of Russian Culture
were held in India in November 2003, in Delhi, Kolkata and Mumbai. "Days of Indian Culture"
in Russia were organised from September to October 2005 in Russia. Chief Minister of National
Capital Territory of Delhi led a delegation for participating in the event "Days of Delhi in
Moscow" from 28 May 1 June 2006. The "Year of Russia in India" was held in 2008. It was
followed by the "Year of India in Russia" in 2009. There is a Hindi Department, in the
University of Moscow.



Objectives
1. The study aims to examine the changing relations between India and Russia over the
years.
2. It endeavours to look into the time tested friendship of both these countries rarely shared
by any other counterparts in world politics.
3. The study also testifies the strategic partnership and super bonding these two countries
share with each other.
4. The study also looks at the defence, economic and energy trade between the two
countries at a broader perspective.
Hypothesis
1. Indo-Russia relations are not just political, economical, military and cultural but also
psychological
2. India requires the support of Russia more than Russia of India in order to leapfrog to the
Global Politics.



Methodology

The proposed study will be based on historical, descriptive, comparative and analytical review of
the data collected both from primary and secondary sources. The analytical study of the available
sources is conducted in the light of the rapidly changing world politics. Day to day events are
taken care of in keeping their relevance to the research topic. Proposed study will take into
account all the new developments taking all over the World and the time tested external relations
between the countries and will make an empirical examination with a keen observance. Apart
from the available source materials like books, periodicals, journals, newspapers etc, primary
sources like official documents, economic reports and statistical analysis will be taken care of.
This will give a more accurate view of the subject.



Chapter II
RELATIONS BETWEEN INDIA AND THE SOVIET UNION

Historically, the USSR under Stalin (Iosif Dzhugashvili), was suspicious of the genuineness of
Indias independence and non-alignment. However, Indo-Soviet bonhomie started with
Jawaharlal Nehrus visit to the USSR in June 1955 and the Nikita Khrushchev/Nikolai Bulganin
visit to India in December 1955. This was also the time when the Congress party in India was
affirming its belief in state planning and a socialistic pattern of society, and Nehru was playing
a leading role in the Bandung Conference (1955) of 29 Afro-Asian nations. During the same
period, the USSR began to use the instruments of aid, trade and diplomacy in developing
countries, to limit Western influence. Subsequently, Indo-Soviet relations flourished over the
decades in the metallurgy, defence, energy and trade sectors. During the IndiaChina war in
1962, the USSR tried to be neutral between what it called brother China and friend India,
with the Peoples Republic of China seeing this as a betrayal of international communist
solidarity on the part of the USSR, and a factor that reflected and further exacerbated the
growing SinoSoviet split. In the early 1970s both Indian and Soviet leaders looked on the
emerging US-Chinese rapprochement as a serious threat to their security. Their response had
been in 1971 with the Indo-Soviet Treaty of Peace, Friendship and Cooperation, which provided
immediate consultation in case of military action against parties to the Treaty.5 During the
IndiaPakistan war in 1971, the USSR took a firm position in favour of India and sent ships to
the Indian Ocean to counter any move by the USA, which had already sent its 7th Fleet ships
into the Bay of Bengal. The results of the 1971 IndoPakistani war and emergence of
Bangladesh established a trusted partnership between India and the USSR. During the 1980s
both Rajiv Gandhi and Mikhail Gorbachev advocated a nuclear-free world. However, after the
Soviet invasion of Afghanistan in 1979, India was also confronted with a dilemma of how to
preserve its non aligned credibility without jeopardizing its relations with the USSR.
India since its independence in 1947 has followed a policy of peace and non-alignment. India has
always raised its voice in favour of truth and Justice. It was after India got its Independence in
1947 that the Nation has able to form its own foreign policy. India relationship with the Soviet
Union started off very well due to Pandit Nehrus initiative. Indias relations with the Soviet


Union in those first five year after independence were ambivalent, guided by Nehrus decision,
to remain non-aligned and take active part in the Commonwealth of Nations. However in
February 1954, when the US administration announced the decision to provide arms and supply
sophisticated military hardware and economic aid to Pakistan, this development alarmed India.
This close Pakistan-US relationship also did not down well with Soviet Union, which also
utilized this opportunity to develop a closer relationship with India. Although Indo-Soviet
cooperation had begun much earlier, Soviet defence and military cooperation with India began
mainly when Sino-Soviet and Sino-Indian relations started deteriorating. Following the 1962
Sino-Indian war, the Sino-Pakistani axis was also a force for growing cooperation between India
and Soviet Union.

An important event took place on August 9, 1971 when the USSR and India signed a Treaty
of Peace, friendship and Cooperation. It is important to note under which circumstances this
treaty was signed. Tensions between India and Pakistan were running high. Their allies and
opponents from third countries were involved, directly or indirectly in the conflict in South
Asia. Pakistan was being supported by China and through this relationship china was seeking
ways to contact Washington. That time, china was in a state of perpetual conflict with both India


and China. The United States helped Pakistan considerably not just with political support but
with supplying arm as well.
During this time, both Beijing and Washington were interested in stemming the spread of soviet
influence in Asia, where India was becoming one of Moscows few allies. Under these
circumstances, the Soviet Union made its historic decision in favour of India in Hindustan in the
early 1950s, and remained loyal to its ally, supporting the position of New Delhi during a
difficult period in the early 1970s.
It was during the time of 1971, when the national movement in East Pakistan erupted. This led to
the proclamation of the Republic of Bangladesh on March 26, 1971. The USSR tried to prevent
tensions from escalating into a direct armed conflict. The then Soviet foreign minister Andrei
Gromyko arrived in New Delhi in the summer of 1971 when the relation between India and
Pakistan were in miserable state.it was during this time of August 9, 1971 when the USSR and
India signed a Treaty of Peace, friendship and Cooperation. This treaty played an important role
which was well-prepared and thoroughly thought out and it took into account the high tensions in
and around the Hindustan. This treaty further stated effective commitment of Soviets Union that
it shall not enter into or participate in any military alliance directed against the other party. The
parties also undertook to abstain from providing any assistance to any third country that engages
in armed conflict with the other party. This was an important to India especially during the time
when territory was under pressure from both East and West Pakistan.
Nevertheless Conflict broke out despite the Soviet Unions efforts to preclude it. The conclusion
of the treaty and the Soviet Unions obvious support for the Indian position did not help. The
talks and manoeuvres and other great powers, primarily the United States and China, and the
triple use of the Veto by the Soviet envoy to the UN did not achieve the desired effect. The sides
were not ready for compromise. Military actions eventually led to military defeat of Pakistan, the
consolidation of the International positions of the newly-independent Bangladesh and a
geopolitical change in the region .All of Indias friends and foes recognized its regional
leadership.


It was during 1971, Treaty was signed for a period of 20 years with an automatic extension of
five years for each subsequent period. During the end of this term, Soviet Union was suffering
serious upheavals and was on the brink of collapse. It was in beginning of 1993, that the experts,
diplomats and scientists managed to peruse President Yeltsin not to ignore such friends and allies
as India. It was later again in 1993, Yelstin made an official visit to India where they signed a
new bilateral Treaty on friendship and Cooperation. Both the countries reaffirmed their
commitment to the New Delhi Declaration on the principle of Nuclear Weapon Free and Non-
violent World, which was signed on November 27, 1986. Moreover, in Article 12 of the
document the parties undertook to protect and facilitate the implementation of human rights and
fundamental liberties, including freedom of religion and minority rights, and to counter all forms
of religious extremism, hatred and violence. Further, this document reflected new challenges
faced by the world and the two countries such as on terrorism, the taking of Hostages, threats to
sea navigation and civil aviation, and illegal drug trafficking. By displaying cooperativeness and
realistic approach of their assessment of global events, and to the test they faced in determining
the form and direction of their bilateral reforms.
Indo-Soviet Treaty of Friendship and Cooperation
In the annals of diplomacy, the Indo-Soviet Treaty on Peace, Friendship and Cooperation, signed
in August 1971, is a unique document that not only epitomised the special relationship between
India and the then USSR, but also acted as a guarantor of regional peace. The treaty may have
been replaced by its modern version, but its legacy continues to underpin the burgeoning
strategic partnership between India and Russia. Few treaties have played such an important role
in shaping politics, history and geography of the world as the 1971 Indo-Soviet Treaty on Peace,
Friendship and Cooperation. The Soviet disintegration and the end of cold war may have eroded
some of its relevance, but nobody can deny that it still reflects the brightest moment in Indo-
Russian diplomatic history, enhancing New Delhis international profile and consolidating the
Soviet position in Asia. Many experts have compared the signing of the treaty as Indias second
liberation, and they were right in many ways.



Chapter-III
INDO RUSSIA RELATION CHANGE AND CONTINUITY

In the initial post-Soviet period
Later in 1990s after the disintegration of the Soviet Union, Russia found it difficult to keep up
the economic position with India. The infrastructure that supported trade, economic, scientific
and technical cooperation was practically destroyed. The leaders tried to maintain the same ties
but that couldnt happen because they were concerned with their own economic and social
problem. It was during the backdrop they signed an important document called the Moscow
Declaration on the protection of Interests of Pluralistic states. This historic tie happened in the
summer of 1994.
Bilateral relations in the 1990s went through a period of uncertainty when Russia was
preoccupied with domestic economic and political issues, and with its relations with the USA
and Europe. Now India had to deal with a new Russia which was Eurocentric, economically
dependent on the West, and neither had the interest nor the resources for Third World regimes.
President Boris Yeltsin, during his visit to Delhi in 1993,tried to recreate the spirit of old
friendship with a new Treaty of Friendship to replace the old India-Soviet 1971 treaty. However,
the fundamental character of the Treaty was transformed and in case of any threat to peace, the
new Treaty vaguely called for regular consultations and co-ordination.8 Although Yeltsin
described India and Russia as natural partners, he was careful not to give the impression of a
special relationship. Although relations were restored to respectable levels, the early years
(199196) of benign neglect of India by Russia left a deep mark on Indian policy-makers.10
The situation changed when the new Russian Prime Minister Yevgeny Primakov (1998
99)started shifting from the previous pro-Western Russian foreign policy. To strengthen his
countrys relations with old allies, Primakov visited India in 1998 and pushed proposals for
creating a Russia-India-China (RIC) strategic triangle, although RIC coherence remains
questionable for some Indian commentators like Abanti Bhattacharya: the development of a
strategic triangle would be unrealistic. The reasons can be easily found in the mutual suspicion
between India and China.11 The new Russian leadership under Vladimir Putin (president,2000


08) reversed the Yeltsin-era drift in India-Russia bilateral relations, signed the Declaration on
Strategic Partnership with India in 2000 and established the institution of annual summit
meetings.12 Moscow realized that as a Eurasian power, an active Russian role and influence in
dynamic Asia would be limited without a solid partnership with old friends like India. Indian
commentators welcomed Putins comment in his 2004 visit, that India is our strategic privileged
partner [] And speaking from the point of view of geographical representation [] India is
number one, as recognition of Indias own rise.
State linkages:
Since 1992 about 15 summit meetings have taken place and about 135 agreements have been
signed between the two countries. To improve their economic relationship, an Indo-Russian
Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural
Cooperation (IRIGC-TEC) has been working towards promoting bilateral cooperation. The
Commission covers 11 joint working groups, namely: trade and economic co-operation;
pharmaceuticals; petroleum; the coal industry; metallurgy; science and technology; cultural
cooperation; information technology; power and energy; the environment and natural resources;
and co-operation with the regions. In the 15th meeting of IRIGC-TEC, held in Moscow in
October 2009, a new trade target of US $20,000m. by 2015 was agreed.
As already mentioned, a major turning point in their bilateral relationship was their formal
Declaration on Strategic Partnership between Republic of India and the Russian Federation,
signed during Putins visit to India in October 2000. Broadly, this agreement meant enhanced co-
operation in the political, economic, defence and cultural fields. It talked of deepening and
diversifying cooperation in sectors such as metallurgy, fuel and energy, information technology,
communications and transport, including merchant shipping and civil aviation, and of further
development of cooperation in banking and finance, and improving credit and insurance
facilities.There was mention of simplifying rules and procedures for travel by entrepreneurs and
businessmen of both countries. It was also agreed to jointly explore the possibilities of regional
trading arrangements with third countries. Since then, summit meetings are taking place almost
every year with many more agreements signed every year. The crux of all these summit meetings
and accompanying declarations has been common positions on major global issues like
international terrorism and desire for a multi-polar world and close bilateral relations. These


summits have been a very useful platform for formulating common positions and responses to
emerging global political and economic issues. However, what do these Summit declarations
actually mean in real terms? There are many ways of looking at these developments. Every time
the summit meeting takes place, the diehard proponents of old Indo-Soviet/Russian friendship
emphasize the need to look at these agreements and declarations as a testimony of a time-tested,
mutually beneficial friendship.
Defence linkages
There are estimates that about 800 Russian defence production facilities are kept in operation by
Indian defence contracts.18 Although China used to be the number one arms importer from
Russia, India has emerged as number one since 2007. Some analysts have argued that in arms
exports, geopolitical and economic factors will eventually force Russia to make a choice between
China and India, a contest that India will probably win Indias major purchases from Russia over
the last 18 years have been varied and extensive, including aircraft (MIG 29, MIG 29 SMT, SU
30K, SU MK1), helicopters (Mi-17, Mi-18, etc.) and air-defence systems (AK 630 30mm, etc.).
In June 2010 the Cabinet Committee on Security cleared another deal of more than $3,000m. to
buy an additional 42 Sukhoi-30 MKI fighters from Russia. The deal came on top of the 230
aircrafts already contracted from Russia in three deals worth a total of $8,500m. The initial
contract was for 50 fighters, at $1,460m. In 2000 the Government contracted the licensed
production of 140 fighters by Hindustan Aeronautics Limited. Then another 40 were added to the
contract.20 Some purchases have been of artillery and armoured vehicles (256M Tunguska),
engines, sensors and a variety of missiles. Maritime purchases have been noticeable, including
frigates (Talwar stealth class), submarines (Kilo/Sindhughosh), nuclear submarines (Akula-2
lease) and an aircraft carrier (the delayed Gorshkov purchase originally due for handover in
200809, now scheduled for handover at the end of 2012). Joint production has seen India also
starting to producing significant portion of armaments at home, including Brahmos missiles,
T72M1 tanks, radars, anti-ship and anti-tank missiles, etc. Most tanks and aircraft are also being
assembled in India. In 2009 both countries agreed on a new military technical co-operation
agreement for the period 201120. The new programme covers both ongoing projects, such as
the Su-30 MKI fighter plane and the T-90 tank production in India, and 31 new projects, which
include a fifth-generation fighter aircraft, the multi-role transport aircraft and a new multi-role
helicopter. Under this programme India hopes to further shift from the buyer-seller relationship


to joint design, development and production. India also has a long tradition of collaboration in
space with the USSR/Russia. Thumba Equatorial Rocket Launching Station was set up with
Soviet help and many Indian experimental and remote sensing satellites were launched with
Soviet co-operation. In 1990 India entered into a $350m. contract agreement with Russia to
supply the cryogenic engines and technology for their manufacture within the country. Russia
earlier agreed to provide India with the technology, but then reversed the decision after it signed
the Missile Technology Control Regime agreement with the USA. The USA objected to giving
India the technology because of its potential use for nuclear missiles. Commercial and political
factors later compelled Russia to sell the rocket engines while withholding the technology. Soon
afterwards Indian scientists were able to develop Indian engines. Currently, both countries
collaborate on many space projects, which include Indias unmanned lunar space flight project
(Chandrayaan-2), the human space flight project and the development of the Indo-Russian
Student Satellite, Youthsat. Russia has also agreed to provide India with access to signals from
its Global Navigation Satellite System (GLONASS).

Commercial linkages
One important point of the old Indo-Soviet friendship was a special bilateral trade and economic
relationship. Although this arrangement had many of the usual weaknesses, like corruption and
patronage transactions in low-quality products, it helped many small and medium sized private
Indian companies to become exporters. After the disintegration of the USSR, this relationship
was badly damaged. Economic transformation in Russia from a centrally planned economy to a
market economy in 1992 coincided with the policies of economic liberalization in India. These
developments changed the nature and character of foreign economic relations in both countries.
Therefore, despite having solid economic and trade relations in the past, most
Russian and Indian companies are still struggling to adjust in each others markets. Economic
relations are still surviving mainly because of defence purchases and some public sector Indias
relations with Russia investments by India. Commercial initiatives are slow to take advantage of
Russian economic transformation. Despite good intentions, both governments have been unable
to facilitate any major economic initiative which could have given a new direction to bilateral
commercial ties


Indian and Russian diplomats holding talks at Hyderabad Housein New Delhi
Background of trading linkages
After the collapse of the USSR, the Indian and Russian Governments renegotiated the entire
trade regime. The 1993 agreement terminated the traditional rupee trade arrangement and
mandated all bilateral trade transactions to be conducted on a hard currency basis. However, with
this agreement the issue of repaymentSince 1953, when the first trade agreement took place,
seven long-term agreements have been signed between the two countries up to the collapse of the
USSR. This bilateral trade was conducted through a specific system of trade and payment called
the Rupee Trade System, based on annual plans. The important point of the system was
payments in non-convertible currency. The trade turnover between the two countries increased
from less than 2 crores in 1953 to about 8,000 crores in 199091. In 199091 more than 16% of
Indian exports went to the USSR and about 6% of imports came from there. One of the most
striking characteristics of the Soviet centrally planned economy was that it had created a system
of exchange in non-convertible currencies with many of its trading partners. This trade behaviour
existed not only with the Council for Mutual Economic Assistance (CMEA) countries, but also
with some other friendly countries like India. The value of exchange between the Russian rouble
and Indian rupee currencies was arrived at through periodic bureaucratic negotiations. Most of
the ideologically-motivated scholars in India regarded this arrangement as a Soviet version of
bilateral aid. The mainstream academia in India also declared that India had derived substantial


benefits from its trade with the socialist world.21 In the late 1970s and early 1980s a few
scholars in India had already warned that despite short-term gains, this type of arrangement
would harm long-term requirements of efficiency and growth. After initial industrialization,
India had problems of importing further machinery either for joint production for third countries
or for the exclusive production for the socialist bloc. India did not want Soviet participation in
those areas where it could get markets of its own. It also did not want captive units, the
production of which could not be exported anywhere else but to the Soviet bloc and could give
the Soviets the possibility of dictating terms. Except for a few works, academia in India by and
large did not bother to critically examine this pattern. The whole arrangement reflected political
imperatives rather than economic rationality. After the Soviet break-up, the new policy elite in
Russia also found these irrational arrangements with developing countries unaffordable. The
haste with which bilateral payment arrangements were scrapped in favour of payments in
convertible currencies indicated that Russian and Indian policy-makers considered s of civilian
and military loans taken by India from the former USSR also came up. Finally, after prolonged
negotiations, the rouble credit was denominated in rupees and a repayment schedule was drawn
up. The agreement provided for an annual repayment of about the equivalent of $1,000m. in
rupees to Russia over a period of 12 years starting from 1994, with smaller amounts for a further
period of 33 years. The rupee debt funds were to be used by the Russian side for import of goods
and trade-related services from India. The rupee debt funds are maintained in a central account
with the Reserve Bank of India. Under a three-year perspective plan, which came to an end in
1997, a part of the rupee debt funds was allocated for the import of tea, tobacco, soya meal and
pharmaceuticals to designated Russian agencies. The balance was either auctioned or allocated to
various states or importing organizations in Russia. In January 1998 this mechanism was
replaced with a weekly auction of rupee debt funds conducted by the Vnesheconombank (Bank
for Foreign Economic Affairs). During 1999 allocations made for the import of pharmaceuticals
and medical equipment from India were utilized by several ministries in Russia. Between 2000
and 2006 the utilization of rupee funds continued through the auctions. In 2007 it was agreed that
Indias restructured rupee debt would be invested in Russian projects in India. According to
Indian finance ministry sources, in December 2007 India still owed $1,970m. in debt to Russia
under this category.



Cultural Cooperation
The strong tradition of Indian studies continues in Russia. Jawaharlal Nehru Cultural Center at
the Embassy of India, Moscow (JNCC) maintains close cooperation with all leading Russian
institutions including the Institute of Moscow, Russian State University for Humanities,
Moscow, Institute of Oriental Studies, Moscow, Institute of Asian and African Studies at the
Moscow State University, School of International Relations at the St. Petersburg University,
Kazan Federal University, Kazan and Far Eastern National University, Vladivostok. There is a
Mahatma Gandhi Chair on Indian Philosophy at the Institute of Philosophy, Moscow, while a
Chair of Contemporary Indian Studies is at the Russian State University for Humanities,
Moscow. Proposals to establish Chairs of Indian studies at Kazan Federal University, Kazan and
Volgograd State University, Volgograd are currently under ICCRs consideration. About 20
Russian Institutions, including leading universities and schools regularly teach Hindi to 1500
Russian students. Apart from Hindi, languages such as Tamil, Marathi, Gujarati, Bengali, Urdu,
Sanskrit and Pali are taught in Russian Institutions. There is general interest among Russian
people in Indian dance, music, yoga and ayurveda. JNCC conducts classes in yoga, dance, music
and Hindi for approximately 500 students every month.
There are regular cultural initiatives to promote people-to-people contacts between India and
Russia. Year of Russia was celebrated in India in 2008 and the Year of India was marked in
Russia in 2009. 150th anniversary of Rabindranath Tagore and a mini Festival of Indian Culture
were celebrated in Russia in 2011. During 2012, the Embassy of India, Moscow organized
several academic, cultural and other events to mark the 65th anniversary of establishment of
diplomatic relations between India and the Russian Federation. A Festival of Russian Culture
was organized in India in 2012. Days of Moscow in New Delhi were held from 26- 29 October
2012


.
Bilateral Relations between India and Russia
Relations with Russia are a key pillar of India's foreign policy and Russia has been a
longstanding time-tested partner of India. Since the signing of Declaration on the India-Russia
Strategic Partnership in October 2000 (during the visit of President Vladimir Putin to India),
India-Russia ties have acquired a qualitatively new character with enhanced levels of cooperation
in almost all areas of the bilateral relationship including political, security, trade and economy,
defense, science and technology and culture. Under the Strategic Partnership, several
institutionalized dialogue mechanisms operate at both political and official levels to ensure
regular interaction and follow up on cooperation activities. During the visit of Russian President
to India in December 2010, the Strategic Partnership was elevated to the level of a Special and
Privileged Strategic Partnership.
Kashmir and Terrorism
Russias stand on the issue of Kashmir and the terrorism faced by India on account of this
dispute has been consistent and unconditional over time or regime change. Every Russian leader,
from Yeltsin to Putin, has reiterated this and it forms the basis for Indias trust with Moscow.
Russia has never tried to balance Indias interest with Pakistan; India has never put into a
position of having to compete with other countries to prove its loyalty by approving all other


Russian positions (for example on Iran, Iraq, etc.); Russian defence and strategic support is not
balanced with a link to any other Russian partner, including China. The US on its part has never
supported the Indian position on Kashmir. They have hyphenated their relations with India with
that with Pakistan. The US needs Pakistan for its Afghanistan policy. They will thus continue to
balance India and Pakistan. International terrorism is perceived as a threat in the Russian
national security doctrine, and both India and Russia have expressed concern that the
international coalition against terrorism has not paid sufficient attention to terrorism in regions
like Kashmir, Chechnya, etc., and is instead focused entirely on Afghanistan and Iraq. It can thus
be judged to be selective and motivated. Russia and India have had reasons to combine forces on
this issue, resolved to exchange information and set up working groups and will have to address
this problem regionally.
India and Russia: Moving towards a 21st century world
The recent summit between President Putin and Prime Minister Singh may have heralded a new
inflexion point in the bilateral. It would seem that India-Russia relations might have bucked the
season of gloom. For years now, since Prime Minister Yevgeny Primakovs reorientation of
Russias foreign policy eastwards, weve largely seen two governments making positive
statements, not matched by actions on the ground and compounded by a general sense of drift.
Adding to this has been a waning interest in India of all things Russian and vice-versa. Two close
friends gradually drifting apart, a contemporary tale of the engagement between Moscow and
New Delhi. The recent summit between President Putin and Prime Minister Singh may have
heralded a new inflexion point in the bilateral. On a cursory comparison of their joint statement
issued on October 22 with the previous four summit statements, there seems very little change on
the surface and if anything, these statements continue to remain an exercise in blandness. But
connecting the dots we get three game changers, which while mentioned, have not been
described under the strategic rubric that they perhaps should have.The first is trade which stood
at $7.46 billion in 2009, $8.53 billion in 2010, and $8.87 billion in 2011, and has suddenly
spurted to $11.04 billion in 2012, registering a 24.5 percent growth year on year. This was the
best performance of Russias top 25 trade partners. This is particularly surprising given the
present world economic situation, the lack of growth of Indias world trade in 2012 and a
marginal growth of 1.8 percent growth in Russias world trade. The second is Russias


determination to push through a free trade agreement with India the comprehensive economic
cooperation agreement (CECA). Given that most of this increase in bilateral trade has been in-
spite of the two governments (outside of the defence sector), this is of particular significance.
This will give the Indian private sector critical access to such landlocked markets like Belarus
and Kazakhstan, which are part of a customs union with Russia.

Former Prime Minister Atal Bihari Vajpayee with Russia's presidentVladimir Putin in November 2001.



Chapter - IV
INDIA-RUSSIA: Old Friends and New Relations
Indo-Russo relations refer to the bilateral relations between the Republic of India and the
Russian Federation. During the Cold War, India and the Soviet Union (USSR) enjoyed a strong
strategic, military, economic and diplomatic relationship. After the collapse of the USSR, Russia
inherited the close relationship with India, even as India improved its relations with the West
after the end of the Cold War.
politics, defence, civil nuclear energy, anti-terrorism co-operation and space. These five major
in Russia. However, in recent years a sixth component, economic, has grown in importance with
both countries setting a target for US$20 billion in bilateral trade by 2015. In order to facilitate
this target both countries are looking to develop a free trade agreement. Bilateral trade between
both countries in 2012 grew by over 24%.
The powerful IRIGC is the main body that conducts affairs at the governmental level between
both countries. Both countries are members of many international bodies where they jointly
collaborate closely on matters of shared national interest. Important examples include the UN,
BRICS, G20 and SCO where India has observer status and has been asked by Russia to become a
full member. Russia has stated publicly that it supports India receiving a permanent seat on the
United Nations Security Council. In addition, Russia has expressed interest in joining SAARC
with observer status in which India is a founding member.
India is the second largest market for the Russian defence industry. In 2004, more than 70% of
the Indian Military's hardware came from Russia, making Russia the chief supplier of defence
equipment. India has an embassy in Moscow and two consulates-general (in Saint Petersburg and
Vladivostok). Russia has an embassy in New Delhi and four consulates-general (in Chennai,
Hyderabad, Kolkata, Mumbai).


According to a 2013 BBC World Service Poll, 42% of Russians view India positively, with only
9% expressing a negative view.
41 years after the Indo-Soviet Friendship Treaty
The Indo-Soviet Treaty of Peace, Friendship and Cooperation was a remarkable diplomatic
achievement for both India and the Soviet Union. It gave India security and the backing of a
superpower and the USSR ended up with an ally in the biggest and most important country in
South Asia. India, which wasnt the darling of the West in its avatar as a socialist country with its
Hindu rate of growth, needed Soviet vetoes in the United Nations, the way the Russian veto is
essential today for regimes in places as diverse as Sri Lanka and Syria.
41 years later, India has a US$1.85 trillion economy that grows at 6 percent in a bad year. The
country has managed to develop good diplomatic and political relations with many powerful
nations. Russia continues to maintain global clout and while it is not as powerful as the Soviet
Union was, the country remains a major global political force as well as an emerging economic
giant. The relationship between the two countries remains warm and cordial yet the bonhomie of
the 1970s seems to be missing at the higher levels.
1 years after the signing of the Indo-Soviet Treaty, the most important aspect of the Indo-Russian
relationship remains the tremendous people-to-people friendship. Since visa rules have been
simplified, there has been an ever-increasing demand among Indians to visit Russia. Largely
gone are the stereotypes about the Russian mafia and the KGB. Moscow is in the must-visit list
of most Indian globetrotters and an increasingly number of adventurers want to take a Trans-
Siberian rail journey.
Although Goa remains the favourite destination for Russians in India, many prefer to head to
Hampi and onwards to more places in southern India. Then there are the fans of Bollywood, a
film industry that is finding new fans among the Russian youth. For those people who think
Indian films are not popular in Russia, I would recommend a visit to popular Russian social-
networking site vkontakte.ru. Almost every new Hindi film can be seen on the site, some with
subtitles and others like Jab We Met, and 3 Idiots dubbed in Russian.

Indians who travel beyond Moscow and St Petersburg are often overwhelmed by the friendliness
and hospitality that they get in Russia. Its beyond these 2 big cities where the Real Russia


lives and where Russian culture can be found in an unadulterated form. Similarly, Russians who
get off the tourist trail often talk about the special feelings that Indians have for Russia. Cultural
festivals in major cities have shown that the Russians and Indians value each others diverse
cultures but the spirit of Hindi-Russi Bhai-Bhai exists in the smaller areas of both countries.
As far as political relationships go, India-Russia ties have had far more ups than downs and
continue to be important for both countries. Whenever Russian or Indian leaders talk about the
relationship between the countries, words like strategic get overpowered by the stress on
friendship. The political friendship between the two countries needs to be harnessed and used in
several areas, where the countries enjoy synergy. Like the people-to-people relationship, Indo-
Russian ties are fundamentally strong and enjoy almost universal support across the political
spectrum in both countries.
Special and Privileged Strategic Partnership
Few people would know that Russia is the only country with which India has a mechanism of
annual ministerial review of defence relations. Also, Russia was the first country with which
India started holding the annual summit, a mechanism that India currently has in place with just
two countries till date Japan being the other one.
Relations with India have always been and I am sure will be one of the most important foreign
policy priorities of our country. Our mutual ties of friendship are filled with sympathy, and trust,
and openness. And we must say frankly that they were never overshadowed by disagreements or
conflict. This understanding - this is indeed the common heritage of our peoples. It is valued and
cherished in our country, in Russia, and in India. And we are rightfully proud of so close, so
close relations between our countries.
Political relations
Both countries attending the BRICS summit in New Delhi, India March 2012. The first major
political initiative, since the collapse of the Soviet Union, between India and Russia began with
the Strategic Partnership signed between the two countries in 2000. President Vladimir Putin
stated in an article written by him in the Hindu, "The Declaration on Strategic Partnership
between India and Russia signed in October 2000 became a truly historic step". Prime Minister
Manmohan Singh also agreed with his counterpart by stated in speech given during President


Putin's 2012 visit to India, "President Putin is a valued friend of India and the original architect
of the India-Russia strategic partnership". Both countries closely collaborate on matters of shared
national interest these include at the UN, BRICS, G20 and SCO where India has observer status
and has been asked by Russia to become a full member. Russia also strongly supports India
receiving a permanent seat on the United Nations Security Council. In addition, Russia has vocal
backed India joining the NSG and APEC. Moreover, it has also expressed interest in joining
SAARC with observer status in which India is a founding member.
Russia currently is one of only two countries in the world (the other being Japan) that has a
mechanism for annual ministerial-level defence reviews with India. The Indo-Russian Inter-
Governmental Commission (IRIGC), which is one of the largest and comprehensive
governmental mechanisms that India has had with any country internationally. Almost every
department from the Government of India attends it.
IRIGC
The Indo-Russian Inter-Governmental Commission (IRIGC) is the main body that conducts
affairs at the governmental level between both countries. Some have described it as the steering
committee of Indo-Russia relations. It is divided into two parts, the first covering Trade,
Economic, Scientific, Technological and Cultural Co-operation. This is normally co-chaired by
the Russian Deputy Prime Minister and the Indian External Affairs Minister. The second part of
the commission covers Military Technical Co-operation this is co-chaired by the two countries
respective Defence Ministers. Both parts of IRIGC meet annually.
In addition, to the IRIGC there are other bodies that conduct economic relations between the two
countries. These include, the Indo-Russian Forum on Trade and Investment, the India-Russia
Business Council, the India-Russia Trade, Investment and Technology Promotion Council and
the India-Russia Chamber of Commerce.
Military relationship
Defence relations between India and the Russian Federation have a historical perspective. The
Soviet Union was an important supplier of defence equipment for several decades, and that
relationship was inherited by Russia after the break-up of the Soviet Union. In 1997, Russian and


India signed a ten-year agreement for further military-technical cooperation. That agreement
encompassed a wide range of activities, including the purchase of completed weaponry, joint
development and production, and joint marketing of armaments and military technologies.
Today, the co-operation is not limited to a buyer-seller relationship but includes joint research
and development, training, service to service contacts, including joint exercises. The last joint
naval exercises took place in April 2007 in the Sea of Japan and joint airborne exercises were
held in September 2007 in Russia. The last military exercise between Russian and Indian army
units were held in Uttarakhand in October 2010. However, the bilateral relations seem to be
strained with Russia cancelling both its 'Indra' series of military exercises with India for the year
2011. In April 2011, a flotilla of five warships from the Indian navy's eastern fleet that went for
joint naval exercises to Vladivostok in the Russian far-east, was turned back without any
manoeuvres. The joint army exercises scheduled to be held in Russia in June, 2011 was also
cancelled shortly afterwards. One of the reasons given was that the MoD had not informed
Moscow of the army exercises in advance.
An Inter-Governmental commission on military-technical co-operation is co-chaired by the
defence ministers of the two countries. The seventh session of this Inter-Governmental
Commission was held in October 2007 in Moscow. During the visit, an agreement on joint
development and production of prospective multi-role fighters was signed between the two
countries.
An IndiaRussia co-operation agreement was signed in December 1988. It has resulted in the
sale of a multitude of defence equipment to India and also the emergence of the countries as
development partners as opposed to purely a buyer-seller relationship. Two programmes that
evidence this approach are the projects to form Indian-Russian joint ventures to develop and
produce the Fifth Generation Fighter Aircraft (FGFA) and the Multirole Transport Aircraft
(MTA). The agreement is pending a 10-year extension.
India and Russia have several major joint military programmes including:
BrahMos cruise missile programme
5th generation fighter jet programme


Sukhoi Su-30MKI programme (230+ to be built by Hindustan Aeronautics)
Ilyushin/HAL Tactical Transport Aircraft
Additionally, India has purchased/leased various military hardware from Russia:
T-90S Bhishma with over 1000 to be built in India
Akula-II nuclear submarine (2 to be leased with an option to buy when the lease expires)
INS Vikramaditya aircraft carrier programme
Tu-22M3 bombers (4 ordered)
US$900 million upgrade of MiG-29
Mil Mi-17 (80 ordered)
Ilyushin Il-76 Candid (6 ordered to fit Israeli Phalcon radar)
The Farkhor Air Base in Tajikistan is currently jointly operated by India and Russia.
In May 2011, Russia cancelled joint army and naval exercises with India allegedly in response to
the elimination of Mikoyan MiG-35 from the Indian MRCA competition. An Indian Navy report
to the referred to Russia as a fair-weather friend and recommended the review of Russia's status
as a strategic partner. Both countries signed a defence deal worth $2.9 billion during President
Putin's visit to India in December 2012. The 42 new Sukhois, to be produced under licence by
defence PSU Hindustan Aeronautics, will add to the 230 Sukhois earlier contracted from Russia.
Overall, the price tag for the 272 Sukhois - three of the over 170 inducted till now have crashed -
stands at over $12 billion.The medium-lift Mi-17 V5 helicopters (59 for IAF and 12 for home
ministry/BSF) will add to the 80 such choppers already being inducted under a $1.34 billion deal
inked in 2008. The value of India's defence projects with Russia will further zoom north after the
imminent inking of the final design contract for the joint development of a futuristic stealth fifth-
generation fighter. This R&D contract is itself pegged at US$11 billion, to be shared equally by
the two countries. So if India inducts over 200 of these 5th Gen fighters, as it hopes to do from
2022 onwards, the overall cost of this gigantic project for India will come to around US$35
billion since each of the jets will come for upwards of US$100 million at least.


Economic relations
Bilateral trade turnover is modest and stood at US$3 billion in 200607, of which Indian exports
to Russia were valued at US$908 million. The major Indian exports to Russia are
pharmaceuticals; tea, coffee and spices; apparel and clothing; edible preparations; and
engineering goods. Main Indian imports from Russia are iron and steel; fertilisers; non-ferrous
metals; paper products; coal, coke & briquettes; cereals; and rubber. Indo-Russian trade is
expected to reach US$10 billion by 2010.
The India-Russia Inter-Governmental Commission on Trade, Economic, Scientific,
Technological and Cultural Co-operation (IRIGC) is co-chaired by India's External Affairs
Minister and the Russian Deputy Prime Minister. There are six Joint Working Groups [WG]
under the IRIGC, namely, WG on Trade and Economy [trade and financial matters], WG on
Energy [oil and gas, thermal and hydel power, non-conventional energy], WG on Metallurgy and
Mining [steel, non-ferrous metal, coal], WG on Science & Technology; WG on Communication
and Information Technology; and WG on Culture and Tourism. The 13th of the IRIGC was held
in Moscow on 12 October 2007.
The two countries have set up India-Russia Forum on Trade and Investment at the level of the
two Commerce Ministers to promote trade, investment and economic co-operation. The first
Forum was held in New Delhi on 1213 February 2007, which was attended by the Minister of
Commerce and Industry and the Russian Minister of Economic Development and Trade, apart
from a large number of business representatives from both sides. The Minister of Commerce &
Industry, Shri Kamal Nath participated in the 11th Saint Petersburg International Economic
Forum on 910 June 2007.


In February 2006, India and Russia also set up a Joint Study Group to examine ways to increase
trade to US$10 billion by 2010 and to study feasibility of a Comprehensive Economic
Cooperation Agreement (CECA). The group finalised its report after its fourth meeting in
Moscow in July 2007. It has been agreed that a Joint Task Force would monitor the
implementation of the recommendation made in the Joint Study Group Report, including
considering CECA. The second BRIC summit was held in Braslia in April 2010. India and
Russia agreed to jointly study a Comprehensive Economic Co-operation Agreement with
Belarus-Kazakhstan with the aim of boosting trade ties and achieving the ambitious trade target
of $20 billion by 2015. Prime Minister Manmohan Singh stated in speech given during President
Putin's 2012 visit to India, "Our bilateral trade has grown by over 30 per cent this year. There is
still untapped potential in areas such as pharmaceuticals, fertilisers, mining, steel, information
technology, civil aviation, telecommunications, infrastructure, food processing, innovation and
services, which we will work to exploit".
Due to India simplifying recent visa rule changes for Russians travelling to India, the number of
tourists increase by over 22%. In 2011 the Indian consulates in Moscow, Vladivostok and St.
Petersburg issued 160,000 visas an increase of over 50% compared to 2010.
Co-operation in the Energy sector
Energy sector is an important area in Indo-Russian bilateral relations. In 2001, ONGC-Videsh
acquired 20% stake in the Sakhalin-I oil and gas project in the Russian Federation, and has
invested about US $1.7 billion in the project. The Russian company Gazprom and Gas Authority
of India. have collaborated in joint development of a block in the Bay of Bengal. Kudankulam
Nuclear Power Project with two units of 1000 MW each is a good example of Indo-Russian
nuclear energy co-operation. Both sides have expressed interest in expanding co-operation in the
energy sector.
In December 2008, Russia and India signed an agreement to build civilian nuclear reactors in
India during a visit by the Russian president to New Delhi.


Space Co-operation
India and Russia both have signed agreements for cooperation and use of GLONASS. Space is
another key sector of collaboration between the two countries. During President Vladimir Putin's
visit to India in December 2004, two space-related bilateral agreements were signed viz. Inter-
Governmental umbrella Agreement on co-operation in the outer space for peaceful purposes and
the Inter Space Agency Agreement on co-operation in the Russian satellite navigation system
GLONASS. Subsequently a number of follow-up agreements on GLONASS have been signed.
In November 2007, the two countries have signed an agreement on joint lunar exploration. These
space co-operation programmes are under implementation. Chandrayaan-2 is a joint lunar
exploration mission proposed by the Indian Space Research Organisation (ISRO) and the
Russian Federal Space Agency (RKA) and has a projected cost of 4.25 billion (US$90 million).
The mission, proposed to be launched in 2013 by a Geosynchronous Satellite Launch Vehicle
(GSLV) launch vehicle, includes a lunar orbiter and a rover made in India as well as one lander
built by Russia.


Science and Technology
The ongoing collaboration in the field of science & technology, under the Integrated Long-Term
Programme of Co-operation (ILTP) is the largest co-operation programme in this sphere for both
India and Russia. ILTP is coordinated by the Department of Science and Technology from the
Indian side and by the Russian Academy of Sciences and Russian Ministry of Industry &
Science and Technology from the Russian side. Development of SARAS Duet aircraft,
semiconductor products, super computers, poly-vaccines, laser science and technology,
seismology, high-purity materials, software & IT and Ayurveda have been some of the priority
areas of co-operation under the ILTP. Under this programme, eight joint Indo-Russian centres
have been established to focus on joint research and development work. Two other Joint Centres
on Non-ferrous Metals and Accelerators and Lasers are being set up in India. A Joint Technology
Centre based in Moscow to bring cutting edge technologies to the market is also under
processing. An ILTP Joint Council met in Moscow on 1112 October 2007 to review co-
operation and give it further direction. In August 2007, an MoU was signed between Department
of Science and Technology and Russian Foundation of Basic Research, Moscow to pursue
scientific co-operation.
North-South Transport Corridor
The "North-South" Transport Corridor Agreement [INSTC] has been ratified by all the three
original signatory states, viz. India, Iran and Russia, and has come into force since 16 May 2002.
This route is expected to reduce the cost of movement of goods between India and Russia and
beyond. The 3rd Coordination Council Meeting of the INSTC was held in October 2005 in New
Delhi and the 4th meeting was held in Aktau, Kazakhstan in October 2007 to discuss further
streamlining the operation of the corridor.
In 2011, Iran and Russia agreed to make every effort to develop bilateral and multilateral
cooperation in road, rail, air and marine transportation. In 2012, Rasia FZE was awarded the
Armenia-Iran railway project and the southern section of the North-South Road Corridor, which
will complete the key missing link in the International NorthSouth Transport Corridor.


Cooperation in the Cultural Sphere
IndiaRussia relations in the field of culture are historical. Prominent Russian painter and
philosopher Nicholas Roerich was influenced by the philosophy of Ramakrishna and
Vivekananda, the poetry of Rabindranath Tagore, and the Bhagavad Gita. He spent his last life in
Kullu, Himachal Pradesh. The 130th birth anniversary of Nicholas Roerich and 100th birth
anniversary of Svetoslav Roerich were celebrated in India in October 2004. Notable Russian
Indologists like Eugene Chelyshev and Gury Marchuk were awarded the Sahitya Akademi
Fellowship by the Government of India.
Terrorism
On international terrorism, India and Russia agree that there is no justification for terrorism, and
this must be fought against, without compromise and wherever it exists. Russia has supported the
Indian draft at the UN on Comprehensive Convention on International Terrorism [CCIT]. The
two sides signed a MoU on co-operation in combating terrorism in December 2002. A Joint
Working Group on Combating International Terrorism meets from time to time and its fourth
meeting was held in Delhi on 24 October 2006.Both Russia and India have faced the problem of
terrorism, India has seen it in the context of its military presence in Kashmir and Russia has seen
it in Chechnya and both the countries are supportive of each other on the issue of terrorism.
Nuclear Deals
On 7 November 2009, India signed a new nuclear deal with Russia apart from the deals that were
agreed upon by the two countries earlier. India and Russia are in discussion for construction of
two more nuclear power units at Kudankulam. The two units already set up are ready for
operation. During Russian president Vladimir Putin's visit to India for the 13th annual summit, a
co-operative civilian nuclear energy road map was agreed to. Running until 2030, sixteen to
eighteen new reactors will be constructed, with installed capacity of 1000 MW each. A 1000
MW reactor costs around $2.5 billion so the deal may touch $45 billion in worth.



Chapter v
STRATEGIC PARTNERSHIP BETWEEN INDIA AND RUSSIA
Political Relations:
Annual Summit meeting between the Prime Minister of India and the President of the Russian
Federation is the highest institutionalized dialogue mechanism under the Strategic Partnership
between India and the Russian Federation. So far 14th Annual Summit meetings have taken
place alternatively in India and Russia. The last (14th) Annual Summit was held in Moscow on
21 October 2013 when PM Dr. Manmohan Singh visited Moscow and had a meeting with
President Putin. A Joint Statement Deepening the Strategic Partnership for Global Peace and
Stability was adopted during the Summit. Bilateral agreements concluded during the Summit
included a Treaty on sentenced persons; MoUs on standardisation and on energy efficiency; and
Programmes of Cooperation in science & technology and in biotechnology. PM Dr. Manmohan
Singh also visited St. Petersburg on 4-7 September for participating in the G-20 Summit and met
President Putin on the on the sidelines of the 5th BRICS Summit in Durban (South Africa) on 27
March 2013.

There are regular high-level interactions between the two countries. Two Inter- Governmental
Commissions - one on Trade, Economic, Scientific, Technological and Cultural Cooperation
(IRIGC-TEC), co-chaired by the External Affairs Minister (EAM) and the Russian Deputy Prime
Minister (DPM) and another on Military Technical Cooperation (IRIGC- MTC) co-chaired by
Russian and Indian Defense Ministers, meet annually. The 19th session of the IRIGC-TEC and


the 13th session of IRIGC-MTC were held in Moscow on 4 October and 18 November 2013
respectively. EAM Shri Salman Khurshid visited Moscow for intersessional meeting of IRIGC-
TEC in April 2013 and then in October 2013 for the IRIGC-TEC meeting with Deputy PM
Dmitry Rogozin and meeting with Foreign Minister of Russia, Mr. Sergey Lavrov. At the
invitation of the Russian Minister for Interior, Home Minister of India Shri Sushil Kumar Shinde
visited Moscow in April 2013. Commerce and Industry Minister, Shri Anand Sharma visited
Moscow in April 2013; St. Petersburg in June 2013 to attend St. Petersburg International
Economic Forum; St. Petersburg in September 2013 to attend the India - Russia Trade and
Investment Forum. Culture Minister Smt. Chandresh Kumari Katoch visited Russia from 10-12
November 2013. Chairperson of the Federation Council (Upper House of Russian Parliament)
Ms. Valentina Matvienko visited India in February 2013, at the joint invitation of Chairman,
Rajya Sabhaand Speaker LokSabha.
Foreign Minister Mr. Sergei Lavrov visited India from 9-11 November 2013 for the India-
Russia-China FMs meeting and Asia-Europe Ministerial meeting.
Defence:
India has longstanding and wide-ranging cooperation with Russia in the field of defence. India-
Russia military technical cooperation has evolved from a simple buyer - seller framework to one
involving joint research, development and production of advanced defence technologies and
systems. BrahMos Missile System, Joint development of the Fifth Generation Fighter Aircraft
and the Multi Transport Aircraft, as well as the licensed production in India of SU-30 aircraft
and T-90 tanks, are examples of such flagship cooperation. The two countries also hold
exchanges and training exercises between their armed forces annually. The Inter Governmental
Commission and its Working Groups and Sub-Groups review defence cooperation between the
two countries.
Commercial Relations:
Trade, investment and economic cooperation between India and Russia has been growing
steadily. In 2012, bilateral trade increased by 24.5% to reach US$# 11 billion out of which
Indian exports amounted to US$ 3 billion while Russian exports were valued at US$ 8 billion. In


January-September 2013, bilateral trade amounted to US$ 6.94 billion. Exports from India to
Russia amounted to US$ 2.33 billion while imports from Russia stood at US$ 4.61 billion. The
two-way investment between the two countries stands at approximately US$ 8 billion. In 2009,
both sides set the target of US$ 20 bn bilateral trade by 2015. Priority areas for expanding
bilateral economic cooperation are pharmaceuticals, IT, steel, diamonds, aviation, fertilizers,
infrastructure, heavy engineering and food products.
IRIGC-TEC is the main institutional mechanism to review economic cooperation. It integrates
seven working groups on trade and economic cooperation, modernization and industrial
cooperation, energy, investment projects, tourism and culture, science and technology, and
communications & IT. India - Russia Forum on Trade and Investment co-chaired by the
Commerce and Industry Minister of India and the Russian Minister for Economic Development,
and India - Russia CEOs Council are the two primary mechanisms to promote direct bilateral
business-to- business contacts between India and Russia. Mechanisms such as India - Russia
Business Council (partnership between FICCI of India and CCI of Russia), India - Russia Trade,
Investment and Technology Promotion Council (partnership between CII of India and RUIE of
Russia), India Russia Business Dialogue (partnership between CII of India and Russias
Business Council for Cooperation with India) and India - Russia Chamber of Commerce (with
focus on SMEs) supplement the efforts to build direct business - to - business ties.
In June 2013, the 4th India-Russia Business Dialogue was held within the framework of the
annual St. Petersburg International Economic Forum (SPIEF). India-Russia CEOs Council met
in St. Petersburg in June 2013 and in Moscow in October 2013. Seventh India-Russia Forum on
Trade & Investment was held in St. Petersburg in September 2013.
Energy:
Russia is an important partner in peaceful uses of nuclear energy and it recognizes India as a
country with advanced nuclear technology with an impeccable non-proliferation record.
Construction of the Kudankulam Nuclear Power Plant (KKNPP) Units 1 & 2 (VVER 1000 MW
units) is an example of fruitful cooperation between India and Russia. KKNPP Unit 1 has
become operational in July 2013, while its Unit 2 is at an advanced stage of construction.


India and Russia also have ongoing cooperation in the field of hydrocarbons and power. ONGC
Videsh Limited has substantive investments of over US$ 5 billion in two major oil and gas
projects Sakhlin-1 and Imperial Energy Limited (Tomsk). Russian companies are engaged in
several power plant and oil and gas projects in India.
Outer Space:
India-Russia cooperation in the field of peaceful uses of outer space dates back
to about four decades. The two countries are currently engaged in cooperation on
GLONASS and other space applications.
Science & Technology:
The Working Group on Science and Technology functioning under IRIGC-TEC, the Integrated
Long Term Programme (ILTP) and the Basic Science Cooperation Programme are the three
main institutional mechanisms for bilateral Science and Technology cooperation, while the
Science Academies of the two countries promote inter-academy exchanges. ILTP which supports
collaborative research in basic and applied sciences has resulted in establishment of 9 thematic
centers in India and Russia and implementation of about 500 projects. In 2010, ILTP was
extended for another 10 years with a renewed mandate innovation led technology programme.
India-Russia Science and Technology Centre with a branch each in Delhi-NCR and Moscow was
set up in 2011-12 in order to promote transfer of technologies and their commercialization. Two
Programmes of Cooperation in the field of science and technology and in biotechnology were
signed in October 2013 and are in the process of implementation.
Cultural:
There is a strong tradition of Indian studies in Russia. Jawaharlal Nehru Cultural Center at the
Embassy of India, Moscow (JNCC) maintains close cooperation with leading Russian
institutions including the Institute of Philosophy, Moscow, Russian State University for
Humanities, Moscow, Institute of Oriental Studies, Moscow, Institute of Asian and African
Studies at the Moscow State University, School of International Relations at the St. Petersburg
University, Kazan Federal University, Kazan and Far Eastern National University, Vladivostok.


There is a Mahatma Gandhi Chair on Indian Philosophy at the Institute of Philosophy, Moscow,
while a Chair of Contemporary Indian Studies is at the Russian State University for Humanities,
Moscow. About 20 Russian Institutions, including leading universities and schools, regularly
teach Hindi to 1500 Russian students. Apart from Hindi, languages such as Tamil, Marathi,
Gujarati, Bengali, Urdu, Sanskrit and Pali are taught in Russian Institutions. There is general
interest among Russian people in Indian dance, music, yoga and ayurveda. JNCC conducts
classes in yoga, dance, music and Hindi for approximately 500 students every month. There are
regular cultural initiatives to promote people-to-people contacts between India and Russia. A
Festival of Indian Culture covering 10 cities of Russia took place in 2013.

Russian President Dmitry Medvedev on the sets of Ra.One



Conclusion
Except for a very brief period in the early 1990s, Indias relations with Russia have been based
on mutual trust and confidence. In the mid-1990s relations were restored to respectable levels
which have been further strengthened since the signing of their strategic partnership in 2000.
Currently, the main pillars of this relationship are strategic congruence, defence ties, nuclear
power and hydrocarbons. The trouble for Indian policy-makers is that these areas still remain
skewed in favour of Russia. The major challenge for both India and Russia is how to sustain this
relationship in the absence of dynamic commercial ties. Future bilateral economic relations will
depend on Russias importance to Indias developmental needs and vice versa. In the past, the
USSR played an important role in Indias industrialization process. It had a comparative
advantage in sectors like steel, which was central to its needs. India now has to assess where
Russia has a comparative advantage. So far, India has been able to develop linkages in defence
production, the oil and gas sector and in nuclear energy. Indian industry has already identified
areas of mutual interest, namely information technology, pharmaceuticals, telecommunications,
financial services, hydrocarbons, energy and power, oil and gas, food processing, financial
consultancy, management services, textiles and diamond processing. The problems are well
known, however, including lack of information, visa problems and logistical issues. Still, very
little attempt has been made to address these issues. There was a lot of hope that a Eurasian
northsouth trade corridor would be able to tackle some of the transportation problems. Owing to
low trade volumes, however, the trading community has not yet developed this route. The strong
political will in both countries to improve bilateral economic relations could have been converted
into real economic gains if some imaginative initiatives had been taken, particularly when the
Russian economy was booming between 2000 and 2007. With the global economic slowdown
impacting in 2008/09, things have become more complicated for increasing India-Russia
economic links, with trade declining from $5,420m. in 2008/09 to $4,550m. in 2009/10. Current
Indo-Russian commercial relations are certainly not commensurate with existing potential. In the
last few years India has signed bilateral trade deals with many partners and many are under
negotiation. However, until Russia joins the World Trade Organization (WTO), it is highly
unlikely that India and Russia will be able to sign any significant bilateral trade and economic
co-operation agreements. In the last two decades the Indian and Russian economies have moved


far from each other. With no major breakthrough, Indian and Russian economic ties will
continue to depend on the arms trade, and nuclear and energy industry linkages. Russian exports
to India are likely to be from the extraction industries and limited Indian exports will continue to
be from low-volume, high-value and high-profit sectors. It is clear now that defence ties
constitute the core of bilateral relations. Russia has provided the most advanced aircrafts, tanks,
rocket launchers, missiles, frigates and submarines to India. Through licensed production of
arms, missiles and aircraft, India is slowly developing its own defence industry. There have been
problems in defence supplies concerning product support, cost escalations, delays in delivery and
incomplete transfers of technology. Still, substantial arms imports continue to come from Russia.
With a changing foreign policy orientation in India, the importance of arms imports from Russia
may see a declining trend in coming years. There was some uneasiness in Russia when India
signed a Strategic Partnership with the USA in 2006, and there was talk of Russia being elbowed
out as Indias main arms supplier, particularly in the midst of troubled negotiations during 2008
10 over the sale of the Admiral Gorshkov aircraft carrier. Nevertheless, overall Russia remains
an important factor in Indian foreign policy debates. Moreover, at the broadest level, the Indian
elite believes that a strong Russia is important for maintaining a desired international
equilibrium, both supporting the idea of multi-polarity and a rule-based international system,
within which India can continue its rise. This remains Indias basic strategic synergy. Indias
relations with Russia



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