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Dec 13, 2013 | 11:15 GMT

9 mins read

Moscow's Ties with India

Summary

Editor's Note: This is the third in a three-part series on Russia's intensifying focus on East Asia. Part 3 examines Russia's relationship with India, including the countries' shared interest in constraining China. Part 1 examined Russia's strengthening ties with Vietnam. Part 2 examined Russia's interests in Northeast Asia and its efforts to strengthen ties with South Korea

The resource-rich Russian Far East presents Moscow with numerous opportunities and challenges. Though the territory is far from Russia's Muscovite core, it allows that core to extend its reach to the Pacific, primarily through energy deals with East Asian countries. These deals have become more important to the Russian economy as market changes have made exporting energy to Europe more complicated.

Although Japan and China are lucrative markets for Russian energy exports, they are also major powers with the potential to threaten Russia's interests in the Pacific and on the Eurasian landmass. Russia has begun looking for other alliances in the Pacific region, making deals with Vietnam and South Korea. In part, these deals are aimed at finding new export markets for Russian energy supplies, but they are also meant to counterbalance the increase in Russia's dealings with China by providing alternative markets and relationships. Russia has long been wary of China's and Japan's intentions in its periphery — whether in Siberia, the Pacific Islands or Central Asia — so Moscow has stalled on developing major ties with the two Asian powers.

Russia has also been making lucrative deals with India that, as a side effect, could constrain China's influence in the Pacific and in Central Asia. India is by no means a Russian ally in South Asia, but partnerships in energy and military matters are mutually beneficial for the two nations.

Russia's interest in India can be traced back to the 19th century, when India was a British colony. As Russia pushed southward into Central Asia, it engaged in a major rivalry with Britain as the two powers encountered each other in Afghanistan. Following Indian independence in 1947, the Soviet Union established ties with the new republic. India was the first of Britain's Asian colonies to gain independence following World War II, and the Soviet Union's recognition of India lent credibility to Soviet anti-imperialist propaganda. Soviet assistance grew after 1950, when the first deal was struck to barter Soviet wheat for Indian tobacco, tea and jute. In 1953, both countries granted each other most-favored-nation status. A series of five-year agreements on trade followed. Soviet assistance became key for the development of heavy industry in India, including the construction of India's first steel plant, Bhilai, in 1955. The partnership was initially one of mutually beneficial trade and ideological ties based on India's non-aligned but slightly pro-socialist tilt.

But Indo-Soviet ties also served as an important lever against an increasingly active China to Russia's south. When tensions between the Soviet Union and China flared in the 1960s and 1970s, Soviet assistance to India escalated accordingly. Between 1960 and 1972, Soviet trade with India increased sixfold, and the Soviet Union boosted military aid beginning in 1964. Throughout the 1960s, Sino-Soviet relations deteriorated into numerous border disputes, and India was seen as a key potential antagonist against the Chinese. India had its own disputes with China and, in 1962, the Soviets remained neutral during the Sino-Indian War but defended India's actions in meetings with the Chinese. Sino-Soviet disputes reached a peak in 1969 with clashes along the eastern and western ends of China's border with the Soviet Union: at Zhenbao Island near the Soviet port at Vladivostok and in the border area near China's Xinjiang province.

India had an interest in gaining support against China but also in achieving its own geopolitical imperative of dominating the self-contained subcontinent, especially against rival Pakistan. India was apprehensive of Pakistan's growing Cold War ties with the United States, and an alignment with the Soviet Union — the other superpower — was natural. The Soviet Union supported India diplomatically in the conflict with Pakistan over Kashmir, even brokering a peace deal in 1965. In 1971, when East Pakistan (Bangladesh) split from West Pakistan, the Soviets signed a treaty of friendship with India to counter Chinese attempts to intervene on Pakistan's behalf. This resulted in the end of Pakistan's advantageous territorial position on the subcontinent and gave India an increasingly dominant role.

Russia and India on the Eurasian Landmass

Russia and India on the Eurasian Landmass

Indo-Soviet ties remained strong through the end of the Cold War, and Soviet leader Mikhail Gorbachev paid a visit to India in 1986.

Post-Soviet Russia and India

Following the end of the Cold War, Russian and Indian ties — like Russia's ties with most of Asia — lapsed as Russia became more concerned with the chaos within its territory and in its borderlands. This changed in October 2000, when President Vladimir Putin signed a strategic partnership agreement with India and renewed the countries' defense ties. Since then, Putin has visited New Delhi four times and signed several deals on energy and military hardware. India's military is now overwhelmingly supplied by the Russians — most of its hardware is Russian built — but India has been attempting to seek more Western arms suppliers, complaining of the inferior quality of Russian technology. However, Russia is still India's top supplier, and with several deals already made Russia is likely to maintain this status in the near future.

India also plays a direct role in Russian interests in Central Asia. Both Moscow and New Delhi are looking ahead to the impending U.S. military withdrawal from Afghanistan and a possible resurgence of militant activity in that country, with repercussions for both India and Central Asia, which remains in Russia's sphere of influence. Before the war, India and Russia cooperated in supporting the Northern Alliance against the Taliban. New Delhi fears that the U.S. withdrawal and a possible collapse of the Afghan government could give Pakistan greater influence in Afghanistan, and with the possibility that Russia could ally with Pakistan to protect its interests in Central Asia, India has an incentive to remain close to Russia.  

Russia's post-Soviet strategy in India is more complex than its strategy during the Cold War. Russia resolved all of its remaining border disputes with China in 2008. Sino-Indian relations, too, are no longer as belligerent. This reflects the new strategic environment in Asia, where several powers vie for control of the seas and other nations work to contain an ascendant China while profiting from Chinese economic power. Russia no longer has an interest, as it did in the 1960s, of countering Chinese moves openly; however, it has a strategic interest in complicating the strategic environment for China at sea.

India and Russia align on this point. In the past decade, India has modernized its naval capabilities in order to counter Chinese influence at sea and to secure access to energy imports, most of which arrive in India by water. Russia has been an important player in this push, signing a 2004 deal for India to make its first aircraft carrier purchase since 1961 — the INS Vikramaditya, which Russia sent to India in November 2013, and leasing India nuclear submarines in 2011 and 2013. Russia and India conduct a number of joint military exercises each year, including the biannual INDRA naval exercises started in 2003. In 2014, India and Russia will hold their first joint air force exercises in Peter the Great Bay in the Sea of Japan. Both sides also made progress on a deal to set up a joint venture to manufacture Russian Kamov helicopters in India. 

These deals are a low-stakes, profitable way for Russia to increase India's reach in the Indian Ocean, where China has been seeking greater influence. While India's purchase of Russian arms has proceeded apace, Russian deals with China have been tapering off even though after the 1989 Tiananmen Square incident China was one of Russia's largest purchasers. During the 1990s, China bought up to $1 billion in arms from Russia per year, rising to $2 billion by the mid-2000s. However, China is increasingly manufacturing weapons at home and Russia has declined to sell more advanced weapons systems to China.

Russia's assistance in strengthening the Indian navy dovetails with its support for longtime Soviet ally Vietnam in the disputed South China Sea. Russia has sold submarines to Vietnam and is also set to open a naval repair facility in Vietnam's Cam Ranh Bay, in addition to extracting natural gas from blocks claimed by both China and Vietnam. India has followed suit, signing a deal to loan Vietnam $100 million in November for military equipment — India's first such deal with a non-South Asian nation — and acquiring the right to use Vietnam's Nha Trang port in 2011. India has made its own cautious hydrocarbon deals in Vietnam's South China Sea as well, signing a deal in November for exploration in seven hydrocarbon blocks, although all safely within Vietnam's territory. Unlike Russia, India has been careful to avoid exploring directly in the area claimed by China, but India's economic presence in Vietnamese waters gives Vietnam greater legitimacy. 

India's Potential as an Energy Market

As part of its broader push into energy markets in Asia and to secure deals in growing markets, Russia has pursued energy deals with India — a possible new market for Russia's essential natural gas exports. India is currently the fourth-largest energy consumer worldwide, and the International Energy Agency estimates that it will become the third largest by 2020. Russia has six liquefied natural gas projects currently on the table that could produce 50 billion cubic meters of liquefied natural gas by 2016-2018. India's consumption of natural gas, a key substitute for coal in power generation and a source of synthetic fertilizer, rose 10 percent per year between 2001 and 2010, reaching 2.3 trillion cubic feet (25 percent of which was liquefied natural gas), and consumption is set to double in the next five years. The effects of the global recession have somewhat darkened this forecast, with India's natural gas consumption down 10 percent in 2012. Regardless, India's gross domestic product growth is expected to accelerate to 6.2 percent in 2014-15, according to the World Bank, and energy imports will need to rise accordingly over time. 

In October, Russia and India established a joint study group to examine the potential for overland supply of Russian natural gas to India. This would require either overcoming major political obstacles in Afghanistan or Pakistan or the use of China as a transit point. Regardless of the fate of this plan, Indian consumption of more Russian liquefied natural gas is a distinct possibility. India's Oil and Natural Gas Corp. Videsh, Indian Oil Corp. and Petronet are considering a partnership with Japan's Mitsui and Mitsubishi to acquire a 10 percent stake in the Yamal liquefied natural gas project in Siberia, owned by Russia's Novatek. Moreover, India is looking to diversify its natural gas supplies away from Qatar, which currently supplies 78 percent of India's imports. As India tries to loosen its energy ties with Qatar, it has secured deals with East African countries such as Mozambique and is pushing for the United States to increase liquefied natural gas exports. As India diversifies its natural gas imports, Russia is one potential supplier. 

Russia and India share interests in balancing against China while maintaining economic ties with the country, which is arguably the premier power in Asia. For now, Russia and India will continue to partner in mutually lucrative deals with the added benefit of reinforcing their mutual interest in a chastened China.

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