Russia and India plan to expand trade, as India faces US tariff pressure | DW News

Key Concepts

• India-Russia Relations: Expansion beyond energy and defense, economic cooperation program until 2030, strategic autonomy, diversification.
• Ukraine Conflict: India's stance on peace, support for peace efforts, impact on India's relations with the West.
• Economic Cooperation: Fast-tracking trade agreement with Eurasian Economic Union, increasing bilateral trade, joint production, joint innovation, investment agreements.
• Defense Cooperation: Russia's willingness to assist India in becoming self-reliant through technology transfer, joint development, and joint production of military hardware.
• Energy Sector: Uninterrupted fuel shipments from Russia to India, potential for increased oil imports, impact of US sanctions.
• Multipolar World Order: Shared vision between India and Russia for a fairer, more democratic global system based on international law and UN charter principles.
• Strategic Autonomy: India's policy of maintaining independent foreign policy and diversifying its partnerships.

India-Russia Ties: Expanding Beyond Traditional Sectors Amidst Western Pressure

India and Russia have reaffirmed their commitment to deepen their bilateral relationship, aiming to expand cooperation beyond the established domains of energy and defense, despite significant pressure from Western nations for India to curtail its ties with Moscow. This commitment was highlighted during Russian President Vladimir Putin's visit to New Delhi.

Economic Cooperation Program and Ukraine Peace Efforts

Prime Minister Narendra Modi announced that India and Russia have finalized an economic cooperation program that will extend until 2030. This program signifies a long-term vision for enhancing economic ties between the two nations.

Furthermore, Prime Minister Modi reiterated India's consistent stance on the conflict in Ukraine, stating, "In relation to Ukraine, India has maintained the side of peace from the beginning. We welcome all efforts being made for a peaceful and sustainable resolution of this issue. India has always been ready to make its contribution and will continue to do so." This statement underscores India's commitment to diplomatic solutions and its willingness to play a constructive role in de-escalation.

Shared Vision for a Multipolar World

Both leaders emphasized their shared foreign policy principles. President Putin stated, "Russia and India pursue independent and autonomous foreign policies. We along with supporters from BRICS SEO and from the states of the world's majority promote the process of forming a fairer more democratic multipolar world order and advocate for the fundamental principles of international law enshrined in the UN charter." This highlights a mutual aspiration for a global order that is more equitable and less dominated by a single power bloc.

India's Stance on Ukraine and its Geopolitical Implications

Gulchan Sachiva, a professor at JNU Center for European Studies, commented on the significance of India's position regarding Ukraine. He noted that India's stance on peace is a priority because it affects its relations with the United States and, to some extent, Europe. India desires a swift resolution to the conflict to facilitate its engagement with all partners, including Russia, which has been a crucial partner. The ongoing sanctions on Russia have created practical difficulties for India, particularly in making payments for weapons and oil imports. Therefore, India's support for peace initiatives, including recent ones, stems from a desire to normalize its relations and ensure continuity in its partnerships.

Regarding potential Indian actions to influence Russia, Sachiva suggested that "putting pressure on Russia is not the way India looks at this." Instead, India is pleased to see a "certain momentum" in discussions between the US administration and Russian authorities regarding the end of the Ukraine war. India remains willing to support any peace initiative and offer assistance if requested. Prime Minister Modi's initial statement during the press briefing heavily emphasized the importance of peace for both global stability and bilateral relations, even within a bilateral meeting context.

Trade Deal Prospects and Eurasian Economic Union

The discussion also touched upon the potential for a trade deal between India and the Eurasian Economic Union (EAEU). It was clarified that India has not yet signed any trade deal but is in discussions about fast-tracking a free trade agreement with the EAEU. Currently, India's trade with Russia stands at approximately $70 billion, largely comprising crude oil imports, with Indian exports to Russia at around $5-6 billion. India aims to increase its exports, especially as Western and European companies have withdrawn from the Russian market, creating opportunities for Indian businesses. A free trade deal with the EAEU could address non-tariff barriers and other trade-related issues. India is also seeking an investment agreement to encourage greater investment from Russian companies in India and vice versa.

Balancing India's Ties with the West and Russia

India's strategy to balance its relationships with the West, including the US, and Russia is characterized by its existing close partnerships with the US and Europe. The upcoming visits of the European Commission President and the European Council President to India, where they will be chief guests for India's Republic Day, exemplify these strong ties. India is also in the process of finalizing trade negotiations with the European Union.

This balancing act is seen as a way for India to assert its strategic autonomy and diversify its relations, particularly in the defense and energy sectors. Historically, India diversified its energy dependence from the Middle East. The current situation with increased oil imports from Russia is viewed as a dynamic development, with the expectation that a certain volume of oil will continue to flow to India.

The increased trade volumes, projected to reach $100 billion in the next two to three years, are expected to make connectivity projects like the International North-South Trade Corridor and the Chennai-Vladivostok Corridor more viable. This aligns with India's diversification strategy, as it also procures weapons from the US, Israel, and France, reinforcing its argument for strategic autonomy.

Joint Production and Innovation in Defense and Critical Sectors

During President Putin's visit, there was significant emphasis on joint production and joint innovation as key areas for future cooperation. In defense, Russia has expressed its willingness to assist India in achieving greater self-reliance through technology transfer, expanding joint development, and joint production of military hardware within India.

Cooperation is also set to increase in critical sectors such as fertilizers, critical minerals, and pharmaceutical production. A significant development in the energy sector is Russia's readiness to provide India with small modular nuclear reactors to meet its growing energy demands.

Russia's Energy Deliveries and India's Oil Purchases

President Putin stated, "Russia is a reliable supplier of energy resources and everything necessary for the development of India's energy sector. We are ready to continue uninterrupted shipments of fuel for the fast growing Indian economy." While this signals Russia's commitment to continued oil deliveries, the crucial unanswered question is whether India is prepared to continue buying that oil, especially given the US and UK sanctions on Russian oil companies. India's reluctance to risk high US tariffs for purchasing Russian oil could significantly impact Russia's oil industry and economy. The extent to which this meeting influenced India's oil purchase decisions remains to be seen.

India's Position on Ukraine: Not Neutral, but on the Side of Peace

Regarding the war in Ukraine, Prime Minister Modi reiterated that "India is not neutral. India is on the side of peace." This has been India's consistent position since 2022. Ukraine was not a central focus of the joint press statement, and no questions were permitted. Modi emphasized India's welcome of any efforts that would lead to a cessation of hostilities and bring both sides to the negotiating table. President Putin, in contrast, did not mention Ukraine but highlighted the shared multipolar vision of the world between India and Russia, where all parties are respected.

Visit's Success for Putin: Propaganda Win

From the Russian perspective, the visit was considered a "big propaganda win" for the Kremlin. Russian state television extensively covered the "warm gestures" in New Delhi, conveying the message that President Putin is conducting himself appropriately on the world stage and is welcomed by friendly nations. This narrative is aimed at both domestic audiences and Western countries, signaling that Russia has powerful allies and should not be pressured.

Conclusion

The India-Russia summit underscored a strategic deepening of ties, moving beyond traditional areas of cooperation to encompass economic development, technological advancement, and a shared vision for a multipolar world order. While India maintains its commitment to peace in Ukraine and its strategic autonomy, the practical implications of Western sanctions on Russia and India's balancing act remain key factors shaping the future trajectory of this relationship. The finalized economic cooperation program until 2030 and the focus on joint production and innovation signal a long-term commitment to strengthening bilateral ties.