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11 Mar, 2010 05:37

Russia and India – looking into new common perspectives

In an attempt to double the multi-billion dollar trade between Russia and India, Prime Minister Putin is heading to New Delhi on Thursday.

While most trade between the two nations has traditionally been in the military sphere, other joint-business opportunities are springing up.

The Indian telecom market is one of the fastest growing in the world, with 500 million cellphone users. But an operator from Russia has turned it upside down, with aggressive pricing and innovative per-second tariffs. In just over a year, a joint venture between Russian company Sistema and India's Shyam Group has reached 3 million customers, and is growing at 15 per cent every month.

Sergey Cheremin, deputy chairman of Sistema, says that, to a point, aggressiveness is good. “As we are a newcomer and we are more aggressive – we have to be more aggressive than the existing players – and CDMA network allows us to spend less money on the same quality network,” Cheremin told RT. “So that gives us a possibility to play on prices and services.”

Despite this, much of the trade between Russia and India is in government to government contracts, particularly in the defense sector. Russia is India’s largest arms supplier and during his visit, Prime Minister Putin is expected to sign defense deals worth $4 billion to supply fighter planes to the Indian Navy, and to jointly develop a new-generation fighter aircraft.

Rajiv Sikri, secretary, Indian Ministry of External Affairs, 2004-2006, states that Russia has given a lot to India.
“We got from the Soviet Union and later from Russia, and we continue to get a lot of technology, transfer of technology, which is simply unavailable to us from other sources,” Sikri told RT. “And our people have very good experience of using Soviet equipment, and they’re very happy with it. It’s reliable.”

Russia is also a big partner in India’s nuclear power sector, helping build civilian nuclear power plants to feed its growing energy demands. Prime Minister Manmohan Singh is likely to ask Russia for nuclear reprocessing technology, which the US remains hesitant about transferring to India.

With this being Putin’s fifth visit to India in the last decade, it is clear that both sides will use the opportunity to reaffirm their partnership.

“If there is trust and confidence and understanding at the highest levels, then this filters down," Sikri claimed. “That’s why you have summit meetings between states, because you renew the friendships, the understandings, remove the misunderstandings [and] find new areas of cooperation.”

However, while bilateral trade is likely to touch $10 billion this year, it is nowhere near the potential given the size of both economies. Unlike India’s thriving, private-sector relationship with the US, the Indo-Russian relationship is almost entirely driven by the two governments.

And that is what Prime Ministers Putin and Singh will need to discuss: how to involve the private sector of their countries more in this partnership.

“We expect a lot from the visit of Premier Putin to India”, says Sergey Lunyov, PhD, professor at Moscow State Institute of International Relations.

He calls Russia and India "objective and natural allies". Good relationships between the countries is the necessity required by a number of factors: from geopolitical to cultural.

“It’s very difficult to find two other major countries that would be so close to each other”, the expert says.

Speaking about weak spots in the relations between the two countries, Lunyov says the economic subsystem is the most backward.

According to him, there’s a great potential in economic relations with India, but it takes hard work to explore it. Although the importance of trade for both countries shouldn’t be underestimated, there are other more profitable areas to keep in mind, especially in the sphere of energy.

Touching upon the cultural relations between Russia and India, Lunyov points out that the interest of the Russian people in Indian culture is great. Russians are keen on Indian films, music, and poetry. The expert explains that from a civilization point of view, Russia and India are very close to each other.

“The interest in Russia towards Indian culture can be traced to the period 200-300 years ago”, notes Lunyov.

Unfortunately, sometimes what seems to be a lack of interest turns out to be lack of advertising. There were a lot of events held as part of the 2009 year of India in Russia and 2008 year of Russia in India. But the turn-out at the venues was rather low because people simply didn’t know about the celebrations.

On the whole, Lunyov says that cultural ties between the two countries are not as developed as they were in the Soviet era and it is vital to promote cultural exchanges.