Narendra Modi is Shoring
Up Russia Ties as Vladimir Putin Deepens China Embrace
Worried
by deepening China-Russia relations, Indian Prime Minister Narendra Modi is
heading to Moscow next week for talks with President Vladimir Putin, his first
visit to the country since the Kremlin’s 2022 invasion of Ukraine.
The
meeting, which will help Putin to counter Western efforts to cast him as a
pariah, comes two months after Putin went to China for the first foreign visit
of his new term. That trip underlined Moscow’s increasing dependence on
Beijing, which India has eyed warily.
“The
deepening of the strategic alignment between Russia and China is uncomfortable
for New Delhi because it’s like your best friend sleeping with the enemy,” said
Swasti Rao, an associate fellow at Manohar Parrikar
Institute for Defence Studies and Analyses, a Defense
Ministry-backed research group in New Delhi. “Given that we have these concerns
it makes sense for the prime minister to go there and talk to Putin at the highest
level.”
It
will be Modi’s first bilateral visit since he won a third term in office, with
the prime minister breaking convention by visiting Russia instead of neighboring countries like Bhutan, Maldives and Sri Lanka,
where he chose to go after previous election wins.
That
underlines the importance New Delhi places on its ties with Moscow, people
familiar with the matter said. India, the world’s third-largest crude consumer,
has become a major buyer of Russian oil, and is reliant on its military hardware
supplies. At the same, relations between China and India have been at a low
point since land-border clashes in 2020.
The
two leaders are expected to discuss a range of issues although no breakthrough
agreements are likely, according to Indian officials familiar with the matter,
who asked not to be identified as the discussions are private. The agenda
includes a logistics supply agreement to bolster cooperation between the two
militaries, restarting discussions on the joint development of a fifth generation fighter aircraft, and collaboration on
nuclear power, the people said.
India’s
Ministry of External Affairs wasn’t immediately available to comment when
contacted for further information. The visit to Moscow, which is expected to
take place on July 8-9, partly coincides with a separate summit in Washington of
members of the North American Treaty Organization. Modi’s Russia trip was long
overdue and the timing had no connection with the alliance’s meeting, people
familiar with the matter said. Modi is expected to visit Vienna on a two- day
trip after Moscow.
The
US has sought to strengthen ties with India to counter China’s dominance in
Asia and has been tolerant of New Delhi’s relations with Russia. Asked about
those relations, Kurt Campbell, the US deputy secretary of state, said last
week Washington has raised concerns about India-Russia ties with New Delhi, but
that it had confidence in India and wants to expand relations with the South
Asian country.
Modi
has skipped annual in-person summits with Putin for the past two years amid
discomfort in New Delhi over the worst fighting in Europe since World War II.
Even so, India has avoided censuring Russia for invading neighbouring Ukraine,
abstaining at United Nations votes on the issue, and has advocated diplomacy to
resolve the conflict.
Cheap
Oil
Oil
sales by Russia to India are helping to maintain ties, even if they aren’t as
close as during the Soviet era. As Russia offers deeper discounts on its oil
amid Western energy restrictions, India has increased its purchases of Russian
crude more than 20 times compared to 2021, exceeding 2 million barrels a day.
India
saved $13 billion by importing cheaper crude oil from Russia over the previous
23 months, according to a study by ICRA, the rating agency, published in April.
A
Moscow meeting with the Indian prime minister is a diplomatic win for Putin,
whose country’s been hit with unprecedented sanctions over its attack on
Ukraine. He’s also wanted for war crimes by the International Criminal Court
which has restricted his travel abroad.
In
June, Putin on a rare foreign tour visited North Korea, where he signed a
military defense pact with Kim Jong Un that alarmed
the US and its allies. Last year, he didn’t attend the Group of 20 leaders’
meeting hosted by India or the BRICS emerging economies’ summit held in South
Africa.
A
former Indian envoy to Russia, who asked not to be identified, said New Delhi’s
ties with Moscow are stable and strong, although economic and defence
interactions have slowed recently. The relationship has always been driven from
the top, and summits between the leadership have their own importance, the
person said.
“The
visit of a leader of a state such as India demonstrates that Russia isn’t
facing international isolation, and for the Kremlin this is very important,”
said Aleksei Zakharov, an
expert on India based in Moscow.
India,
which has refused to join punitive measures against Russia, has worked to
resolve problems affecting trade caused by Moscow’s need to reduce its use of
the US dollar.
India
now pays largely in UAE dirham for Russian oil, and the two countries have
found a solution to a deadlocked payment system for weapons and other goods.
That had led to Russian companies amassing as much as $8 billion worth of
rupees in accounts in India which they couldn’t spend, according to senior
officials who didn’t want to be named because of the sensitivity of the issue.
Under
the agreement, Russia has used the funds to invest in Indian enterprises and
buy more electronic goods, pharmaceuticals, agricultural tools and textiles,
said officials directly aware of the details.
Arms
Deals
From
New Delhi’s perspective, the commercial relationship remains unbalanced,
however, with India importing about $60 billion a year and Russia buying less than
$5 billion from India.
Russia,
meanwhile, is seeing its once-dominant position in India’s arms market weaken
as New Delhi looks to Western suppliers led by France and the US, as well as to
its own defense industry. There have been no new
major arms deals with Russia for the last three years, and India’s push to
diversify looks set to continue after delays in the delivery of Russian S- 400
air defense systems.
Russia
for now remains India’s main supplier, accounting for 36% of arms imports,
according to the Stockholm International Peace Research Institute. But that’s
down more than half from a decade ago.
Wary
of sanctions risks and payments difficulties, Indian businesses also are
cautious about operating in Russia, and top Indian officials and executives
have been reluctant to attend major economic gatherings in the country.
Modi’s
last trip to Russia was in 2019, when he attended a far eastern economic forum
in Vladivostok.
“This
is about maintaining the status quo,” said Zakharov,
the Moscow-based India specialist. “Ties are not deteriorating but there’s no
particular drive to improve relations either.”