Russian President Vladimir Putin’s visit this week comes against the backdrop of the toughest challenge faced by the Russian economy since the late 1990s. With falling global oil prices and bruising Western sanctions, Russia is set to slip into recession next year and Putin’s state-of-the-nation address last Thursday warned Russians to brace for hard times ahead. In this situation, Moscow would naturally seek to reach out to other partners, such as India and China. Putin’s visit is also going to be Prime Minister Narendra Modi’s first substantive engagement with the Russian president, although they had met at the BRICS summit in Brazil (July) and the G-20 summit in Australia (November). Once India’s all-weather friend, the distance between New Delhi and Moscow has grown in recent times and there is much work to do for both Modi and Putin.
The two sides would need to focus particularly on the bilateral economic relationship, which remains far below potential. While Russia would look to India, among others, for investment at a time when its bridges to Western financial markets are mostly gone, ties between the respective private sectors are few. Bilateral trade is a meagre $ 10 billion and is unlikely to meet the 2015 target of $ 20 billion. If the strategic trade, in the defence and nuclear energy sectors, is taken out of the equation, there is little to boast of on the commercial side. With a number of agreements reportedly on the agenda, including the significant rough diamond trade and the “mutual recognition agreement” in educational degrees, India should invite Russia to the “Smart Cities” and other infrastructure projects, apart from pushing trade in national currencies. However, the political challenge before Delhi and Moscow is bigger and it would call for greater mutual understanding, given the profound geopolitical changes occurring across the globe. Russia sees India drawing close to the West at a time when its own ties with the United States and Europe are fraying, largely in the context of the crisis in Ukraine. Moscow is also concerned about losing its prime position as a supplier of arms to India. At the same time, India has been watching Russia get closer to China and Pakistan. In addition to its deepening military and strategic ties with Beijing, Moscow has initiated a new defence relationship with Islamabad, borne out by Russian Defence Minister Sergei Shoigu’s first-ever visit to Pakistan last month, during which a defence cooperation pact was signed.
India’s partnership with Russia, nevertheless, remains important and multi-dimensional. The two countries have shared strategic interests, like stability in Afghanistan. Modi and Putin should have a frank conversation, put the old bilateral sentimentalism aside and take a fresh look at how best to reorient and advance the relationship in the current circumstances.