India and Russia on Monday moved to strengthen their economic ties by inking a pact on a Kremlin-backed $2 billion investment fund and agreeing to open talks on a Comprehensive Economic Partnership Agreement that will also involve Belarus and Kazakhstan.
After talks between Prime Minister Manmohan Singh and Vladimir Putin at the twelfth straight annual summit, the two countries finalised 10 agreements. Among them were two military contracts, worth about Rs. 20,000 crore that had been in the works for some time.
However, there was no substantial progress on issues of discord — delay in commissioning aircraft carrier Gorshkov, stalemate on clinical trials in Russia, applicability of the Nuclear Limited Liability Act on six new reactors to be put up by Russia at Kudankulam, inability of Russian companies Sistema and Severstal to move ahead with their investment plans in India and the tax imposed on Imperial Energy, an Indian company operating in Russia.
On the positive side, despite the setback suffered after the Supreme Court cancelled all 2G licences, Sistema indicated its faith in the country with Glonass, its sister company, signing two agreements in the satellite segment. India has already signed the military side of the contract with Glonass, a constellation of 34 satellites, last year.
India and Russia also agreed to take the first steps towards operating a “ranging station” that will help accurately fix the location of satellites. A military side agreement on receiving precision signals from Glonass was signed last year, following active interest shown by National Security Advisor Shiv Shankar Menon.
Russia and India also resolved to further extend their partnership in the energy sector, which has moved beyond investment (Sakhalin-I) to direct trade (Gazprom-Gail) and is now seemingly set for joint investment in downstream and upstream sectors. India put its interest areas on the table — equity participation through ONGC-OVL in existing and new projects in Siberia, Russia’s Far East and the Arctic Shelf besides interest in acquiring equity stake in discovered or producing assets and in proposed Liquefied Natural Gas (LNG) projects in Russia.
Keywords: India-Russia bilateral ties, 13th India-Russia Annual Summit, Putin's India visit, Vladimir Putin, Manmohan Singh, defence deals
such buyer/seller relationship is not sustainable in the long term if Indian companies are not involved in a substantial portion of the development or manufacture of the weapons systems being bought from Russia. This also applies to other sellers like France or the USA. But given the volume and value of purchase from Russia it is all the more important that Indian industry also gains both on skills and manufacturing contribution from these deals. Also Russia can alleviate the situation by allowing Indian companies stakes in its oil and gas sector. As much as India needs Russian weapons it is also true that India is perhaps the best buyer it got who won't steal its design and manufacture copycats depriving Russia of revenue and intellectual property unlike some other buyers of Russian armaments.
India is currently the biggest arms importer in the world. It is spending 10s of billions of dollars primarily buying aircraft. The indigenization process is far below the expectations. Instead of spending so much money on buying foreign equipment, India should use that money to help start aircraft industry in the private sector. I do not think the government defense industry would be able to meet the requirements.
All these weapons are used against our own pl like the tear gar shells seen in new delhi and other equiments used by security forces on protesters.
Russia and the former Soviet Union have been leading suppliers of weapons to India for decades when others imposed sanction on India. However, in recent years there have been problems. Prices have been jacked up after contracts have been signed and there have significan delays in delivery of weapons and spares. The delivery of the Gorkshov aircraft carrier has been the most glaring problem. India is also to blame in many cases. Indigenous design and development as well of the manufacture of critical weapons by state run agencies have been significantly delayed forcing purchase of many items including basic items such as automatic rifles from foreign countries.
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