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Sansad TV: Perspective- India-Russia Trade Relations

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Introduction:

India and Russia are in advanced negotiations for a new Bilateral Investment Treaty, External Affairs Minister S Jaishankar said. Addressing a business event that was also attended by Russian deputy Prime Minister and trade minister Denis Manturov, Dr. Jaishankar described India’s relationship with Russia as among the steadiest major relationships of the world. He, however, emphasized on the need to address the growing trade imbalance with Russia. The annual bilateral trade between India and Russia has gone up to $45 billion this year, driven largely by India’s increased purchases of Russian crude. India is exploring means to increase its exports to Russia across a slew of sectors.

Eastern Economic Forum:.

  • The Eastern Economic Forum was established by decree of the President of the Russian Federation Vladimir Putin in 2015 to support the economic development of Russia’s Far East and to expand international cooperation in the Asia-Pacific region.

The Far East:

  • The Far East is the easternmost part of Russia.
  • The macro-region borders two oceans, the Pacific and the Arctic, and five countries (China, Japan, Mongolia, the United States and the DPRK).
  • The area of the region is 6.952.555 km2, which is about 41% of the area of the entire country (the largest federal districts in terms of size).
  • Over the past few years, the Far East has been a dynamically developing part of the Russian Federation. Unique mechanisms such as Advanced Special Economic Zones are to create a favourable investment climate.
  • The Far East is rich in natural resources. The macro-region extracts 98% of Russian diamonds, 80%of stannary, 90% of borax materials, 50% of gold, 14% of tungsten, and 40% of fish and seafood.

Why is Russia Important for India?

  • Prime Minister Modi has described the EEF as a “historic opportunity” to give new impetus to the cooperation between India and Russia.
  • India is interested in expanding the level of trade between the two countries. An area of special interest for India is the exploration of hydrocarbon reserves along the coast of Russia’s Far East
  • Even as India is diversifying its defense trade partners, Russia still dominates the Indian defense inventory to the tune of about 70 per cent.
  • Russia remains the only partner that is still willing to give India critical technologies, such as a nuclear submarine.
  • Russia also reaffirmed its “unwavering support” to India for a permanent seat in an expanded UN Security Council.
  • Russia expressed its support for India’s membership of the Nuclear Suppliers Group.
  • Both countries have mutual benefits in supporting struggle against terrorism, Afghanistan, climate change; organisations like SCO, BRICS, G-20 and ASEAN.

Economic ties:

  • Russia-India trade has not grown to great heights despite the encouragement of both states.
  • Russia sees India – one of the fastest growing economiesin the world – as a country that could alleviate Russia’s economic problems.
  • Make in India initiative has welcomed Russian companies from the public and private sectors.
  • Indian companies are exploring major investment options in Russia, especially in natural resources such as coal, fertilizers, hydrocarbons, minerals, and rare earth metals.
  • Trade and investment relations are not up to the mark and this needs improvements.

Issues of terrorism:

  • Both countries strongly condemned terrorism in all its forms, stressing the need for an effective global effort in dealing with the terrorist menace.
  • They also called for the elimination, once and for all, of all terrorist “safe havens,” presumably referring to Pakistan.
  • India openly shared Russia’s concerns over developments in Syria.

Cultural Cooperation:

  • There is a strong tradition of Indian studies in Russia.
  • 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.
  • There are regular cultural initiatives to promote people-to-people contacts between India and Russia

Way Forward:

  • India-Russian relationship is passing through an interesting phase.
  • There are bilateral challengesthat need to be overcome.
  • The defense deals and nuclear energy cooperation should keep the India-Russia relationship afloat.
  • India has to rebuild on its strengths and common concerns with the Russians.
  • India must attract Russian investors to tap the vast opportunities in India’s infrastructure space.

Conclusion:

  • India and Russia have identified several new areas of cooperation.
  • These range from deep sea exploration to building knowledge based economies based on science and technology, innovation, robotics and artificial intelligence, focussing on infrastructure, skill development, agriculture, shipbuilding, railways, aviation and greater connectivity, especially people-to-people contacts.
  • Above all, the push to ‘Act Far East’ allows India to demonstrate its commitment to an area of concern for Moscow, thus reassuring its traditional partner that in an increasingly polarised world, India is confident of working with multiple alignments, even if they are at cross purposes with each other.