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A new start for India & Russia

India's national interests demand a strengthening and deepening of friendly ties with Russia. The emphasis on energy security during Prime Minister Manmohan Singh's visit to Moscow this week marks the opening of what promises to be an exciting new chapter in the bilateral relationship. On the hydrocarbon front, Moscow has welcomed New Delhi's interest in picking up not just a share of the Sakhalin-3 oil project but also equity in a major state-owned energy giant like Rosneft. There is talk of India and Russia joining hands in oil and gas exploration and extraction ventures in other regions, particularly Central Asia. The Russians are also looking to deploy a portion of rupee debts subsisting from the Soviet era in thermal power projects in India. Further, there is the sensitive issue of cooperation between the two countries in civilian nuclear energy. Given Washington's interest in the matter, Moscow is understandably cautious. In the short term, India's main interest is in securing supplies of Low Enriched Uranium (LEU) for Tarapur. In the medium to long term, there is the question of additional reactors for Koodankulam as well as new nuclear power projects. In the past, Russia's efforts at pushing the supply envelope with India were thwarted by American opposition in the Nuclear Suppliers Group. But with Washington looking for ways to open the door to nuclear commerce, Moscow does not wish to be left behind. Russia will be happy if the July 18 agreement is implemented smoothly — President Putin said as much at the joint press conference in Moscow — but the two countries will be looking at a backup plan in case the agreement runs into trouble.

On defence matters, the decision to explore the design and co-production of a transport aircraft and, interestingly, a fifth-generation fighter suggests that the partnership that has worked brilliantly in the BrahMos missile project will eventually be replicated in other fields. If there is one weakness in the relationship, it is the failure of the two countries to take effective measures to increase the level of bilateral non-defence trade. There are enormous procedural barriers in the way of Indian businesses penetrating the Russian market. Bilateral trade is dwarfed by the commerce China does with both India and Russia and there is little prospect of any dramatic increase in the near future. A major problem in this regard is visas. Dr. Singh raised the issue with Mr. Putin but a solution does not seem near at hand. Russia is under pressure from the European Union to stop serving as a transit point for illegal migrants to cross over to Europe. Moscow believes, quite reasonably, that a softening of visa restrictions for Indian businesspersons must be accompanied by New Delhi accepting responsibility for the flow of illegal migrants into Russia. In the meantime, state-run oil and gas companies will be the torch-bearers of the new economic dimension in the bilateral relationship.

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