EMERGING ISSUES IN INDIA- RUSSIA RELATIONS

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26 Dec EMERGING ISSUES IN INDIA- RUSSIA RELATIONS

Posted at 26 Dec 2023 in Daily Current Affairs for UPSC by
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MAINS RELEVANCE: GS2 SYLLABUS- Bilateral, Regional and Global Groupings and Agreements involving India and/ or affecting India’s interests:

WHY IN NEWS: 

  1. External Affairs Minister S. Jaishankar on Monday began his 5 day visit to Moscow and St. Petersburg, during which he will hold talks with Russian Foreign Minister Sergey Lavrov and Trade Minister Denis Mantu.
  2. The visit is also significant as it comes in lieu of the annual summit due to be held between Prime Minister Narendra Modi and Russian President Vladimir Putin, an unbroken tradition from the year 2000 until 2021 due to the Russia-Ukraine war. 
  3. The visit is expected to see discussions on a number of thorny bilateral issues, including continuing problems over the rupee-rouble payment mechanism amid a surge in the import of Russian oil and bilateral trade and delays in supplies of defense equipment. 
  4. Russia’s supply of the fourth and fifth regiment of the S­400 Triumf Air Defence Systems, also under U.S. sanctions, have been delayed and are now expected in 2024. 

INDIA-RUSSIA RELATIONS: CONVERGENCE: 

1. GEO-POLITICAL: 

  1. The India and Russia ties have been a longstanding relation since 1971 when Russia supported India in Liberation war of Bangladesh against pressure of Nuclear warfare by USA
  2. India-Russia signed the Indo-Soviet Treaty of Friendship & Cooperation on 9th August 1971: It was the first political treaty India made with another nation.
  3. It acted as a turning point in India’s traditional Non-aligned policy so vigorously enunciated at Bandung in 1955.
  4. India further signed the  “Declaration on the India-Russia Strategic Partnership” in 2000. 
  5. Political engagement has seen further highs with the current Government. For example: In 2019, President Putin signed the Executive Order on awarding PM Narendra Modi Russia’s highest state decoration – The order of St Andrew the Apostle.
  6. India’s decision to not join the U.S.­led naval operation against Houthi attacks on shipping in the Red Sea, named “Operation Prosperity Guardian” so far is also likely to find favor in Moscow.

2. GEO-STRATEGIC: 

  1. Russia has also provided “unwavering support” to India’s demand for Permanent Seat at UNSC
  2. Russia can significantly contribute to defusing tensions with China: For example Russia organized a trilateral meeting among the foreign ministers of Russia, India, and China following deadly clashes in the Galwan Valley in the disputed territory of Ladakh in 2020. 
  3. There is a long standing mutual cooperation against Terrorism through Groupings such as Shanghai Cooperation Organisation (SCO) & BRICS etc
  4. Two Inter-Governmental Commissions – one on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC), and another on Military-Technical Cooperation (IRIGC- MTC), meet annually.
  5. Both countries regularly conduct the Tri-Services exercise ‘INDRA‘.
  6. Russia is India’s topmost weapon supplier:
    1. Though as per SIPRI Report 2021: Russia’s share in India’s weapon import has fallen from 69% to 49%
    2. Examples of India’s Import: MIG-21, Sukhoi-30, T-72 tanks, Russian S-400 air defense missile system and a joint venture to manufacture AK-203 assault rifles. 
  7. Indian Navy’s first submarine, ‘Foxtrot Class’ came from Russia
  8. INS Vikramaditya, the sole aircraft carrier operated by India, is also Russian in origin.
  9. The joint military programmes between India and Russia include: BrahMos cruise missile programme, 5th generation fighter jet programme, Sukhoi Su-30MKI programme, Ilyushin/HAL Tactical Transport Aircraft & KA-226T twin-engine utility helicopters.
  10. Russia is an important partner for India in the area of peaceful use of nuclear energy:
    1. Kudankulam Nuclear Power Plant (KKNPP) is being built in India .
    2. Both India and Russia are implementing Rooppur Nuclear Power Project in Bangladesh

3. TRADE RELATIONS: 

  1. The two countries intend to increase bilateral investment to US$50 billion and bilateral trade to US$30 billion by 2025.
  2. A Phenomenal Growth in Bilateral Trade has been observed as it has increased by around 2.1 times in January- September in 2023, up to almost 50 billion USD owing to strong demand for hydrocarbons in India. 
  3. Exceeding Expectations: India and Russia have already achieved the bilateral trade target of $30 billion before the target year of 2025.
  4. Resilient Engineering Exports: According to Engineering Exports Promotion Council (EEPC) India, amid declining demand for engineering goods from major markets such as the US and China, shipments to Russia continued their uptrend and more than doubled to around US$ 123 million in July 2023 from around US$ 55 million in July 2022.
  5. India has also shown active engagement in the Eastern Economic Forum (EEF) to develop Russia’s far east (eg-Vladivostok). It will help India to Explore Critical Minerals such as Hydrocarbon,diamonds, gold and tungsten from Far-East.
  6. India and Russia are discussing a free trade agreement (FTA) involving the Eurasian Economic Union (EEU), against the backdrop of bilateral economic ties seeing a sharp expansion since the start of the Ukraine conflict.
  7. Member countries of EEU:  Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan.
  8. Diversifying Trade: India has diversified its export basket to Russia to include pharmaceuticals, fertilizers, coal, diamonds, chemicals, and ceramics, among other goods. 
  9. Rupee-Rouble Mechanism: De-Dollarization of Economy: The payment mechanism between India and Russia was devised to circumvent the U.S. and EU sanctions against Russia over the Ukraine war. 

4. CULTURAL RELATIONS: 

  1. Cultural contact through Yoga, Vaishnavism, Ayurveda and Dance etc
  2. About 20 Russian Institutions, including leading universities and schools, regularly teach Hindi to about 1500 Russian students
    1. EXAMPLE: creation of a Traditional Knowledge Digital Library (TKDL). 
  3. Apart from Hindi, languages such as Tamil, Marathi, Gujarati, Bengali, Urdu, Sanskrit and Pali are taught in Russian Institutions   

EMERGING ISSUES BETWEEN RUSSIA & INDIA: 

  1. High trade deficit incurred by India: The skewed trade balance has been an area of concern between the two countries: 
    1. For example, during FY23, India had around a $43 billion trade deficit with Russia, which left their exporters with large surpluses in their Vostro accounts in India.
    2. This has meant delayed payments, as well as the need for India to use third country currencies including the UAE Dirham and Chinese Yuan to pay for Indian imports from Russia that have grown a massive 368% year on year from 2022 to 2023, mainly due to an increase in import of Russian oil, leading to a major trade deficit.
    3. This has created Challenges in Rupee- Ruble Trade: Indian refiners are using a mix of currencies to settle most of their Russian oil purchases.
  2. Both countries previously discussed trading in their local currencies but this is yet to take off because of currency volatility and the high trade deficit. 
  3. Russia’s Over Dependence on China: China enjoys direct connectivity, advanced logistics supply, a high level of trade, and profitability with Russia. 
    1. Since the beginning of Russia- Russia-Ukraine conflict, Russia-China cooperation has grown in all directions. 
    2. The trade turnover between the two countries reached a record $190 billion last year, increased by another 39% in the first quarter of this year compared with the same period in 2022. 
  4. Infrastructure and Connectivity Issues: Inadequate transportation infrastructure and connectivity can impede the smooth flow of goods between India and Russia. 
    1. The absence of a direct trade route and high shipping costs make exports to Russia a costly affair for India, as it doesn’t share a land border with Russia, unlike China
  5. Divergence on International Relations: While Russia has been openly critical of Israel’s actions, and in particular, the U.S.’s support to Israel over the bombing of civilians, India’s stand has been less strident. 
  6. Challenging India’s role as Balancing Power: Russia along with China has been highly critical of India as Member of QUAD including US, Australia and Japan, grouping formed to ensure security of trade and transit in Indo-Pacific region 
  7. While India has been wary of SCO’s emerging outlook as “Anti-Western” grouping: Eg- Recent inclusion of Iran and Belarus as member & Myanmar as Observer making practically every member facing sanctions by Europe & USA. 

STEPS TO TAKE BY INDIAN DIPLOMACY: 

  1. Addressing Trade Imbalance: A huge imbalance in trade heavily towards Russia is an issue in the Rupee-Ruble trade. To solve this problem, Russia is keen to import manufacturing equipment including machinery from India. 
  2. Increasing Asia’s Importance for Russia: To compensate for the decline in trade with the West, Russia is looking much more toward Asia. 
    1. For India, this could mean broadening our engagement that was overly reliant on the triad of military, nuclear, and space cooperation.
  3. Providing Solutions to Short- and Medium-Term Challenges in Business: Payments, logistics, and certification were some of the key areas of issues and it is possible to find solutions to them. 
    1. Attracting Russian’s investors towards India’s key infrastructure shall be emphasized upon
  4. Improving Rupee-Ruble Trade: To tackle the accumulation of Indian currency in Russia, increasing Rupee trade with third countries common to both India and Russia, where India has a trade surplus can help in ensuring seamless money flow while solving the problem. 
    1. For this, India has taken steps to de-dollarize trade while pushing for the internationalization of the Indian Rupee. 
  5. New Trade Routes: The development of new trade routes like the Eastern Maritime Corridor and the Northern Sea Route will also be of interest in deepening trade ties. 
    1. International North-South Transport Corridor (INSTC) is another effective connectivity initiative to increase Indo-Russian trade.
    2. The two countries are also discussing the possibility of launching a trans-Arctic container shipping line and processing facilities along the Northern Sea Route.
  6.  Defense deals and nuclear energy cooperation can further float relations

CONCLUSION: 

Thus in words of International Policy Expert Suhasini Hiader: India’s adequate response to the crisis posed by Russia-Ukraine War has displayed its “Diplomatic Deftness” as India not only secured its National interest but reinforced its commitment for Rule based order. However, addressing trade imbalances, enhancing connectivity, and exploring diversified partnerships will be crucial for sustaining and strengthening their economic ties in the evolving global landscape.

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Prelims Question (2019)

Q: Recently, India signed a deal known as ‘Action Plan for Prioritization and Implementation of Cooperation Areas in the Nuclear Field’ with which of the following countries?

(a) Japan

(b) Russia

(c) The United Kingdom

(d) The United States of America

Ans: (b)

PRELIMS 2024 PRACTISE QUESTIONS: 

Q1: “Operation Prosperity Guardian” recently seen in the news is associated with which of the following: 

  1. Operation by India to curb Narco-Terrorism in Golden Crescent region 
  2. Operation by USA to provide Maritime security in Red Sea region
  3. An initiative launched by BRICS countries to provide loans to Lower Middle income countries
  4. A joint military exercise between all members of QUAD grouping 

ANSWER: B

EXPLANATION: 

 “Operation Prosperity Guardian”: 

  1. It is an initiative launched by USA to protect Red Sea commerce.
  2. Countries Involved: The U.K., Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles, and Spain are participating.
  3. Joint Patrols: These nations will conduct joint patrols in the southern Red Sea and the Gulf of Aden
  4. NOTE: India is NOT a member of alliance 
  5. This follows missile and drone attacks by Yemen’s Iran-aligned Houthis:  The Houthis are a large clan belonging to the Zaidi Shia sect, with roots in Yemen’s northwestern Saada province.
    1. Today, the Houthis are one faction in a bloody civil war that has raged in Yemen since 2014.
    2. The Houthis, backed by Iran, are a part of what Iran calls, “The Axis of Resistance” : an informal anti-Israel and anti-West political and military coalition that it leads.
    3. Other notable groups in the Axis include Hezbollah and Hamas.
    4. In Yemen, the Houthis are fighting against the Sunni-led internationally recognized Yemeni government, backed by Saudi Arabia and the UAE.

Q2: India & Russia have recently accomplished 50 years of Strategic ties through Indo-Soviet Treaty of Friendship & Cooperation 1971. Which of the following initiatives are being developed under joint cooperation by India & Russia: 

  1. INS Vikramaditya
  2. BrahMos cruise missile programme
  3. Kudankulam Nuclear Power Plant in Tamil Nadu
  4. Rooppur Nuclear Power Project in Bangladesh

Choose the correct code from options below: 

  1. Only one pair
  2. Only two pair
  3. Only three pair
  4. All of the above pair 

ANSWER: D

EXPLANATION: 

  1. The India and Russia ties have been a longstanding relation since 1971 when Russia supported India in Liberation war of Bangladesh against pressure of Nuclear warfare by USA:
    1. India-Russia signed the Indo-Soviet Treaty of Friendship & Cooperation on 9th August 1971: It was the first political treaty India made with another nation.
    2. It acted as a turning point in India’s traditional Non-aligned policy so vigorously enunciated at Bandung in 1955.
  2. India further signed the  “Declaration on the India-Russia Strategic Partnership” in 2000. 
  3. Political engagement has seen further highs with the current Government. For example: In 2019, President Putin signed the Executive Order on awarding PM Narendra Modi Russia’s highest state decoration – The order of St Andrew the Apostle.
  4. JOINT PROJECTS BY INDIA & RUSSIA: 
    1. Indian Navy’s first submarine, ‘Foxtrot Class’ came from Russia
    2. INS Vikramaditya, the sole aircraft carrier operated by India, is also Russian in origin.
    3. The joint military programmes between India and Russia include: BrahMos cruise missile programme, 5th generation fighter jet programme, Sukhoi Su-30MKI programme, Ilyushin/HAL Tactical Transport Aircraft & KA-226T twin-engine utility helicopters.
    4. Russia is an important partner for India in the area of peaceful use of nuclear energy:
    5. Kudankulam Nuclear Power Plant (KKNPP) is being built in India .
    6. Both India and Russia are implementing Rooppur Nuclear Power Project in Bangladesh

Practice Mains Question: Discuss the importance of India-Russia relationship in the current global context. In light of recent developments, highlight the scope for strengthening economic and strategic cooperation between the two countries especially with regards to India’s Act Far East policy. (15 marks, 250 words)

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