Modi-Putin Russia Summit to be Viewed With Optimism and Caution

While Modi and Putin seemed to share good chemistry, this meeting should be taken with a large bag of salt.

(Photo: Altered by The Quint)

What does one make of the Putin-Modi summit, officially described as “agenda-less”? There is room for hope, but also caution. Much of Putin's interactions with India have been businesslike and impersonal, much to do with Putin's conviction that Indian leaders talk much but deliver little.

India-Russia’s Relationship Curve

This has slowly changed. Clearly, there was good chemistry between the two leaders, with Putin actually coming to see off Indian PM Narendra Modi. Similarly in 2017, Russia invited Modi as partner-leader for the St Petersburg economic summit, as compared to the past, where Putin had mostly preferred to be seen with Chinese Presidents.

That is, of course, when Putin found the time to turn away from his obsessive Euro-centrism. Yet all this bonhomie may actually be a facade for the not-so-positive undercurrents in the India-Russia bilateral relationship.

For starters, India’s engagement with the maritime quad to contain China has raised hackles in Moscow. Much of this doesn’t have to do with the formation itself, but rather with India’s verbal commitment to become more compatible with US military equipment and thereby significantly reduce the market for Russian equipment. It also reduces the possibility of high-value sales of highly classified and sensitive products like nuclear submarines and S-400 anti-aircraft missiles.

India, of course, true to Putin's fears, has done a wonderful job of overselling itself to the Quad with the inevitable disappointment to follow in the coming years. However, this marketing triumph has the Russians worried, irrespective. This fear would only be exacerbated by the upcoming US ‘Countering America's Adversaries Through Sanctions Act’ (CAATSA) federal law.

Though India is lobbying to get an exception to this, it may explain why the upcoming Combat Aircraft and Ground Combat Vehicle tenders were changed in recent months – to apparently cater to Russian concerns – but will mostly be sold to the Russians as a major concession to them.

A Once-Vibrant Relationship Now Lacklustre

For India, the main issue will be the slow but sure infiltration of the Pakistan lobby in the Kremlin, spearheaded by Zamir Kabulov, Russia's point-person on Afghanistan, and former ambassador to India Vyacheslav Ivanovich Trubnikov.

They have been floating ideas like “the solution to Afghanistan lies in Kashmir”. These two it seems, have created a clique involving three other junior ministers in the Kremlin, with the official line that any perceived Indian movement closer to the US must be balanced by a Russian move towards Pakistan.

India, for its part, can hardly raise this issue, as it amounts to the internal affairs of the Russian government.

Diamonds in the Rough?

It is particularly telling that both India and Russia feel the need to play these games given the lack of substance in their once-vibrant relationship. The diamond bourse idea floated 3 years ago during President Putin's visit to Delhi has come a cropper, due to eminently foreseeable circumstances.

Even when it was announced as Modi’s grand plan to compete with the Rotterdam and Tel Aviv bourses and give a run to the De Beers diamond monopoly, the plan, like most of the NDA’s plans, seemed poorly conceived. India, though, it processes 70% of the world’s diamonds, only accounts for 30% of the value, as it processes small gems of little value. Russia, for its part, simply does not have gem-quality diamonds, producing inferior industrial stones. In essence, for a low-quality gem processor to partner with the lowest quality gem extractor in an already depressed, low-profit margin market to challenge some of the highest quality manufacturers and processors, was never going to be a viable plan. Everyone seemed to know this except our government.

Energy & Defence Flagging

Similarly, the highly vulnerable two-point trade – Energy and Defence – plummeted to USD 7 billion from an all-time high of around USD 11 billion, but has recovered somewhat. This still doesn’t answer, of course, how India and Russia are to diversify their trade, when the Indian economy is not performing as well as it should and the Russian economy has effectively become a White Saudi Arabia: A single-product economy.

Larger Implications of Modi’s Russia Visit

Perhaps the one bright spot – the tangible one – that may have been discussed during the summit, was the Rooppur Nuclear Power Plant in Bangladesh. Though India is merely a knowledge partner in the "non-critical" (ie: those areas not covered by nuclear supplier group protocol) areas, specifically training and capacity-building the Bangladeshi workforce and acting as suppliers, this is nevertheless a major agreement.

The main reason is the long-term consequences. First, it reinforces India’s position as a credible international nuclear sector vendor. Second, it marks the depth of Indian and Russian cooperation, and third, when taken in conjunction with similar cooperation being discussed in Vietnam, comes off as nuclear “continental duo” (mirroring the naval quad) that acts as a credible infrastructure and energy alternative to China in the continent.

This would automatically dovetail into Russia's ambitious International North South Transport Corridor (INSTC) which hopes to connect Chabahar to Northern Europe.

The problem with this so far has been the lack of capital to cover minor but significant issues like loans, insurance cover, the lack of a common land and sea transport company for seamless operation (and hence cost duplication). More importantly, much like China's Belt and Road Initiative (BRI), one is yet to see a feasible cost-benefit analysis of the project.

There are reasons, however slim, to stay optimistic – but it must be optimism tempered by a (very large) dose of caution.

(Abhijit Iyer-Mitra is Senior Fellow at the Institute of Peace and Conflict Studies. He tweets at @Abhijit_Iyer. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)