The Two Headed Eagle Lands: Vladimir Putin's New Delhi visit

The Putin visit has transformed a relationship based on strategic-political congruence to one based on mutual economic gain. Hindustan Times January 24, 2007

At a press briefing in New Delhi in the late-Eighties, a Soviet academician, when pressed on the quality of technology in his country, said somewhat plaintively, “Surely a country that has flown the Buran cannot be backward.” In the field of space science and military technology, it was not. The Buran, which flew in October 1988, was a Soviet space shuttle that could be launched, manoeuvred and landed automatically. But the Buran never flew again. The country that launched it dissolved, in part because it was bankrupted by programmes like Buran, aimed at giving the USSR strategic parity with the United States. Like a nova, the Soviet Union briefly lit up the earth and suddenly dimmed.

Nearly 25 years later, the core of the USSR — Russia — is once again lighting up the sky. This time as an energy and commodities superpower. It ended 2006 with its eighth straight year of growth, averaging 6.7 per cent annually. Oil and commodity prices have played a key role in this, but investment growth and consumer spending are now beginning to kick in. Oil export earnings have allowed Russia to increase its foreign reserves from $12 billion in 1999 to some $315 billion at the end of 2006, the third largest in the world.

At the helm of affairs in Russia is a no-nonsense leader termed ‘ruthless’ and ‘cold’ by his adversaries, but hugely popular in his own country. Vladimir Putin became acting President on the last day of the 20th century, December 31, 1999. He was anointed President in May after the election and was re-elected for a second term in 2004. Over the years, Putin has undertaken a policy of concentrating political power in Kremlin and re-nationalising Russia’s oil and gas industries.

In international affairs, Putin has begun to re-establish the strong and independent role for Russia, once played by the Soviet Union, without its revolutionary or imperial pretensions. He has accepted American and European influence over the Baltic States, but sought to keep traditional Slavic States like Ukraine and Belarus under a close embrace. Till now, he has acquiesced with the US dominance in West Asia and gone along with American activities in Central Asia. Even in the case of Iran, he has chosen to avoid direct confrontation with the US. However, America’s self-inflicted infirmities in these regions have created a vacuum that Kremlin could once again seek to fill.

Russia’s resurgence under a powerful leader is good news for New Delhi. The Soviet collapse, formalised in 1991, took with it the scaffolding around India’s strategic architecture. The Soviet Union had been the inspiration for our planned economy, supplier of some 70 per cent of military hardware and an uncomplaining supporter of all our causes, from Kashmir to Bangladesh. Soviet weapons systems, provided at ‘friendship prices’, enabled India to field a robust military force that made us a regional power of sorts.

Despite the scramble to re-orient its foreign and security policies, New Delhi never had to go through what Russia did in the Nineties. Russia’s GDP halved, as did its government revenues. By the end of the decade, it witnessed an unprecedented decline in its standard of living, resulting in a sharp rise in poverty and mortality rates. Drastic privatisation led to the State’s vast resources being skimmed off by a small group of oligarchs linked to the Kremlin. Universities and institutions of higher learning, culture and publishing houses that were subsidised by the State found their budgets slashed, if not entirely eliminated. There was an enormous rise in the influence of the West and its institutions in Moscow.

India can perhaps no longer expect the kind of political relationship it had with the Soviet Union to be replicated with Russia. But then, New Delhi no longer needs uncritical friends. Its own foreign policy has been drastically overhauled, it has taken important initiatives with neighbours, made advances in its relations with the US, Europe and Japan, and developed an autonomous self-defence capability in the form of nuclear weapons. Most important, its booming economy has given it a self-assurance and standing that does not need the kind of props the Soviet Union once provided.

Russian trade and technology transfer relations with China are booming, but a demographically imploding Russia also fears for the future with an economically booming and demographically gigantic neighbour with whom it shares a 3,600 km border. Despite a shared culture, Russia’s relationship with the rest of Europe has been historically troubled and continues to be so. As for the US, the Russians remain suspicious of its agenda in the former Eastern Europe and Central Asia. So, while a shared history of good relations brings Russia and India closer, what makes for the glue today is that the two do not have any conflict of interest or suspicion of each other. Russia remains sensitive to Indian security concerns in its dealings with our neighbours, especially Pakistan; they are with us in trying to stabilise Afghanistan and Central Asia.

No matter how you look at it, Russia remains one of the more important world powers. It is the largest producer of natural gas and the second largest exporter of oil after Saudi Arabia. It is also the source of significant military and space technology. Though two-way trade between India and Russia is abysmal — Indian exports are $ 0.74 billion and imports $ 2.2 billion — the potential is enormous. The upturn in the Russian consumer-led expenditure offers huge opportunities for Indian firms in the pharma, textiles, IT and automobile sectors.

India failed to take advantage of the collapsing Russian military machinery, when some of its best scientists and engineers were hired by the West and China. Today, there is greater awareness that relations need to be based on joint development of technology, rather than simple export or licensed production of weapons systems. There is, of course, far greater interest in India today on Russian energy resources. The reassertion of Kremlin’s control over oil resources does give some advantage to State-owned Indian oil giants. But as of now, the Russian energy policy remains in a state of flux.

India’s new strategic architecture is based on shoring up its strategic autonomy in the economic and security field. To this end, it is pursuing policies to promote economic growth, resolve disputes with neighbours and strengthen relations with all significant nations of the world. This is not very different from what Russia is doing. A resurgent Russia has important implications for India’s regional and global policy, because it enhances the options available to New Delhi. Arguably, there is a closer identity of interests between the two on Central Asia, Iran and West Asia, than between New Delhi and Washington. With the US mired in Iraq and its stock in West Asia at a low, India can work with countries like Russia to provide a stabilising influence, especially in the vital Persian Gulf region.

New Delhi and Moscow have the opportunity, and an apparent inclination today, to rebuild their ties on a new basis, albeit on solidly established older foundations. In a study published in 1991, Santosh Mehrotra noted that while relations between India and the USSR were based on a “compatibility of strategic-political interests”, they also had a basis in strong mutual economic interest. New Delhi and Moscow have clearly understood that they still share important strategic interests. What they need now is to put in work to buttress this with mutually beneficial economic ties.