Old bedfellows, but commercially disjointed

Even though Western governments and media outlets have launched a vilification campaign against Russian President Vladimir Putin as an aggressive and unlawful foe, the strongman from Moscow is finding eager partners in Asia. Following a high-profile visit to China last month where landmark deals were signed in the energy sector, he touched down in a welcoming India last week.

The red carpet Indian Prime Minister Narendra Modi laid out for Mr Putin in New Delhi poured cold water on Western attempts to corner the Russian leader as an international pariah and furthered Russia’s march into Asia.

United States President Barack Obama is struggling to implement his much-touted pivot to Asia, but Mr Putin has swiftly reoriented Russian foreign policy towards Asia as a retort to bete noires that he ironically taunts as “our Western partners”. Facing shrinking market opportunities for Russian exporters in Europe and in light of the European Union’s scuttling of Russia’s ambitious South Stream gas pipeline, Mr Putin knows that his country’s future is inextricably tied to Asian powers such as China and India, which follow independent foreign policies by resisting Western pressures.

A black-belt holder in judo, Mr Putin is manoeuvring to ensure that Russia’s vast gas and oil industries are redirected southwards and eastwards, thereby sustaining Russia’s “great power” status and weathering Western economic sanctions. The amount of diplomatic capital Moscow has devoted to groupings such as BRICS (Brazil, Russia, India, China and South Africa) and the Shanghai Cooperation Organisation (SCO) reveals a Russia divorced from its European half of identity and harnessing more of its Asiatic character.

Mr Putin is engineering this cultural shift owing to realisation that America and some European powers have not abandoned their Cold War-era mission of “keeping Russia down”. Unlike the US, which spearheads the North Atlantic Treaty Organization (NATO) to hem in Russia, Asia’s top guns are less threatened by Russia’s return to glory under Mr Putin.

This is especially true for India, which benefits from a powerful Russia as it checks Islamic extremism in Central Asia and beefs up Iran in the Middle East— outcomes that dovetail with New Delhi’s strategic goals. India’s positions on ongoing wars and interventions around the world echo those of Russia because there is little overlap between the zones of influence that each nation covets for itself.

The same cannot be said about Indian and American strategies, which sometimes clash because of the underlying fact that New Delhi (like Moscow) wants a multipolar world with many power centres, while Washington strives to preserve its pre-eminence in global affairs.

STRENGTHENING ECONOMIC AND MILITARY COOPERATION

However, despite structural commonalities, India and Russia have been lethargic on the transactional nitty-gritty, which ought to buttress their larger geopolitical convergence. Civilian-sector trade between the two is stagnating at only US$10 billion (S$13.1 billion) per annum. Mr Putin is bullish that Russia-China trade will reach US$100 billion next year. In contrast, the target of modestly raising Russia-India trade to US$15 billion by next year looks unachievable, as there has been no concerted push from the governments on both sides in the form of concessions and preferential treatment to induce their corporations to do business with each other.

Russia has thus far been an unwavering source of nuclear energy for India. Mr Putin announced in New Delhi that Russia will supply 12 new nuclear reactors to India in the next two decades. Given that nuclear energy constitutes a tiny fraction of India’s overall energy mix, if the two countries can find a transnational connectivity path to tap into Russian gas, it will be an even bigger milestone in energy security. The International North-South Corridor, which purports to transport freight among Russia, Iran, Central Asian countries and India, can be a game changer, if executed on a priority basis, with the potential to ameliorate India’s chronic energy shortage. When operational, the corridor could drastically cut transit time and costs, and open an assured supply line for gas to India.

Perceptions that the Russian market is difficult to penetrate due to non-tariff barriers and state domination are partly responsible for disappointing trade and investment levels with India. Given Mr Putin’s commanding authority over Russia’s destiny, he can create special windows for Indian companies and clear the logjams. His skill of punishing foreign investors and traders from countries inimical to Russia’s strategic interests can be an advantage for Russia-friendly India, which seeks to become a substitute exporter of products and services that the European Union is now withholding from Russia.

As long as the volume of civilian trade is mediocre, military exchanges will remain the mainstay of the Russia-India bilateral relationship. Here, shadows have been cast lately by India diversifying its defence acquisitions away from Russia and Russia peddling fighter aircraft to India’s nettlesome neighbour Pakistan.

Recession-plagued Russia needs India more than before and the onus is on Russia to share defence know-how and enhance co-production of hi-tech weaponry with India. New cutting-edge joint ventures that repeat the magic of BrahMos (the world’s fastest short-range cruise missile, jointly produced by Indian and Russian defence majors, which is being sold to Vietnam) can raise the bar in the India-Russia military equation.

Mr Putin’s offer to manufacture advanced helicopters in India that can be exported to third countries is exactly the kind of fresh strategic-cum-business fillip that the old Russia-India marriage requires.

India and Russia are geopolitically on the same page, but commercially disjointed. Mr Modi and Mr Putin are grabbing a historic chance to repair the latter aspect, so that the former keeps flourishing.

ABOUT THE AUTHOR:

Sreeram Chaulia is a professor and dean at the Jindal School of International Affairs in Sonipat, India.