Russia and India's mutual history runs from competition in South Asia between czarist Russia and colonial England to Cold War-era cooperation between India and the Soviet Union. Moscow and New Delhi developed a close relationship after the United States provided weapons to Pakistan in the 1950s. The relationship intensified again following the Sino-Indian war in 1962. Even as India headed the Non-Aligned Movement during the Cold War, the Soviet Union began a heavy military investment in India that continues to this day.
Russia and India maintained ties after the fall of the Soviet Union, but the two countries have not seen any reason to expand their relations. The strategic relationship that existed occasionally during the Cold War became less important as each country focused on its own regional concerns. But developments in places like China and Afghanistan are placing new emphasis on the relationship.
Over the past decade, India has surpassed China to become the largest buyer of Russian military exports. This is a consequence of India's military modernization and of China's increasing reliance on its indigenous military industry. India has recently signed a number of weapons contracts with Russia, purchasing tanks, warships and aircraft. For Moscow, the military relationship with India is critical, because the overall demand for Russian weapons is in decline.
The Indians have recently begun to diversify their arms suppliers. Arms contracts that could have gone to Russia include a major multirole fighter program contracted to the French and a couple of helicopter tenders that went to the United States. While the Russians still figure prominently in the Indian defense market, they are no longer the near-lone supplier of weapons to India. The Indians are seeking to purchase the most advanced and effective weaponry, and in some categories, Russia has a hard time competing with countries such as the United States. Furthermore, a series of delays and mishaps (especially with the Admiral Gorshkov carrier) have cast doubt on the Russians' reliability in arms transfers.
The greater competition from other weapons producers and the growing sophistication of the Indian military-industrial complex has caused the defense cooperation between India and Russia to include far more joint ventures in weapons development. This has allowed Russia to remain competitive in the Indian market, and it has also brought in much-needed Indian financing to support mutually beneficial weapons projects.
Russia and India collaborated in developing and fielding the BrahMos supersonic cruise missile and the Perspective Multi-Role Fighter. So long as the Russians can offer India more than just sales, New Delhi will remain a key partner in the military-industrial field — something Moscow needs. India, on the other hand, needs partners to help modernize its military as the country seeks to keep pace with military buildups in its neighborhood, especially in China.
India's domestic energy needs are rising fast. The International Energy Agency estimated that India would overtake Japan as the world's third-largest energy consumer by 2020. Domestic production of coal, natural gas and oil is declining due to poor management, lagging infrastructure and a complex regulatory environment. India has been trying to perfect its technical capability by participating in technically difficult projects around the world. Many of these projects have been carried out in Russia or in countries where Russia holds influence. India's Oil and Natural Gas Corp. holds a 20 percent stake in Russia's Sakhalin-I oil project and has been purchasing stakes in energy projects in Kazakhstan and Turkmenistan. India has hinted that it wants to create energy infrastructure connecting Central Asian energy supplies to India by routing them through Pakistan and Afghanistan, but security and political concerns decrease the chances that such a project will ever be carried out. Instead, India is focusing on existing projects to increase its expertise in energy technology.
New Delhi has renewed its focus on nuclear energy, a field in which Russia can expand its cooperation with India. Demand for nuclear energy is expected to grow nearly 400 percent in India from 2015 to 2035. Russia can build nuclear plants and provide uranium supplies. In fact, Moscow has already signed a protocol to build the third and fourth reactors at India's Kudankulam nuclear power plant, and it has offered loans to India for additional construction deals.
Both Moscow and New Delhi are worried about the security situation in Afghanistan once the U.S. military withdraws. Russia is concerned that militants will move from Afghanistan into Central Asia, a region Moscow considers its sphere of influence. New Delhi worries that Afghanistan will become the center of a transnational militancy that could affect India at home, and it also worries that Pakistan's influence in Afghanistan could grow.
During the Soviet war in Afghanistan, Moscow worked closely with New Delhi in backing the Northern Alliance against the Taliban; this cooperation created lasting connections between the countries' military, intelligence and political establishments. But while Russia is looking to cooperate with India on Afghanistan, Moscow has realized a relationship with Pakistan could be more useful in this case. India probably worries this will lead to greater ties between Islamabad and Moscow. With that in mind, it is in New Delhi's benefit to maintain relations with Moscow across a broad range of issues.