Diplomatic point of view

Economic cooperation is one of the fundamental elements of Russian-Indian strategic partnership

Ambassador Extraordinary and Plenipotentiary of the Russian Federation to the Republic of India Alexander Kadakin in interview tells about the development of relations between Russia and India. The Ambassador assured that our countries have the highest potential for development of both political and economic relations.

— In actual practice, how is the strategic partnership between Russia and India manifested and realized?
— Let me remind readers and listeners of "Sputnik" that Russia and India became initiators of this format of interaction, introduced in international practice at the turn of the XXI century following the signing of the Delhi Declaration on strategic partnership by Vladimir Putin and Atal Bihari Vajpayee in 2000. This was a specific reflection of the maturity, diversity and depth of our relations which continue to grow in spite of the severe turmoil on the world stage. At the heart of this phenomenon lies an unprecedented level of mutual understanding and trust, intimacy or community of priorities in economic and social development, domestic and foreign policy, including our approach to peace and security, to the formation of a new global architecture. Based on this precious asset, accumulated through joint efforts from the early days of the existence of independent India, the two countries have cultivated new directions of bilateral cooperation, conforming to our national interests and the current international agenda.
As regards Russian-Indian relations, we are highly satisfied with the outcomes of the visit of Prime Minister Narendra Modi to Moscow last December. I will be very frank in saying that I had not expected the visit to be so fruitful and so productive, because till the last moment several agreements were not ready and I was rather pessimistic. The good results have exceeded all expectations. First of all, it applies to the serial construction of nuclear power units in India. The number of nuclear power units to be constructed in India with Russian assistance is 12, including the completed and running unit 1 of KNPP. Unit 2 will be commissioned to full capacity in about five-six months’ time, ground works for units 3 and 4 have already started, and talks are being held on the technical parameters of units 5 and 6. Another six units will be constructed at a new site, which most probably will be in Andhra Pradesh. The name of the place has not yet been announced.
Russia is the pioneer of peaceful nuclear power units in India. While we have almost completed unit two, India’s so-called newly acquired partners have not driven a nail at their sites. Until now they have not started even ground work. Maybe it happens because of the liability issue but it has not prevented Russia from going ahead. Pricewise the energy received from Kudankulam today is twice lower than the projected price for so far hypothetic French and American units. There is nothing at their sites — just wilderness.
There was another important feature of the summit – President Putin and Prime Minister Modi had a one-to-one meeting during dinner at the Kremlin. It shows there is a good chemistry in personal relationship between the two leaders. They both are very precise gentlemen who do not spend time on idle talking but act in practical terms. They both are result-oriented persons.
Another important agreement reached in Moscow – an intergovernmental agreement on Ka-226T helicopters. It means Russia will help India to produce at least 200 machines here in India. It will be with HAL, which can choose even private partners. It is absolutely in tune with the “Make in India” program launched by Prime Minister Modi.

— For a long time, Russia and India have been trying to accelerate bilateral trade and economic relations.
— Economic cooperation is one of the fundamental elements of Russian-Indian strategic partnership. In the foreseeable future, nuclear energy will remain the main element of this partnership. Let me remind you that the second unit of NPP "Kudankulam" is expected to become operational by the end of 2015 and we expect to start the construction of Units 3 and 4 of this plant in early 2016. The Indian side is prepared to offer us a platform to build the second nuclear power plant of Russian design. The "Strategic Vision" of the Russia-India cooperation in nuclear energy, signed during the Russia-India summit in December 2014, provides for the growth of cooperation in various areas, including the production of radioisotopes and scientific and technological developments. Agreements have been reached on the participation of Indian scientists in the programs being carried out at the Center for Nuclear Research in Dubna.
I agree that the potential for trade between the major emerging economies such as India and Russia is far from being exhausted. However, it should be borne in mind that in recent years we have made significant progress in the development of contacts between small and medium-sized businesses, Russian regions are participating quite actively in this process . This is facilitated by the consistent improvement in the business environment and investment in both countries, as well as the current international economic environment.
The task of increasing the volume of bilateral trade to 30 billion US dollars and mutual investment to $ 15 billion by 2025 set by our leaders during the bilateral summit in December last year is quite achievable. A mechanism to move to the use of national currencies in mutual settlements is being actively developed. The creation of a reliable and efficient infrastructure of the international transport corridor "North-South", which will significantly reduce the delivery period for goods and the cost of cargo transportation between Russia and India is being accelerated. We are discussing the creation of a Free Trade Zone between the Euro-Asian Economic Union and India. The first meeting of the Joint Study Group on the advisability of such an agreement was held recently. We are working on updating the Russian-Indian agreement on the protection and promotion of mutual investments. All these steps will create an entirely new environment for building fruitful cooperation, not only bilaterally but also on the regional level.
Speaking of advances in bilateral trade and economic relations, mention must be made of the successful implementation of a number of projects in the oil and gas sector. In particular, the Indian company ONGC Videsh Ltd. is carrying out exploration of oil fields in the Tomsk region and in the northeast shelf of Sakhalin Island (project "Sakhalin-1"). In pursuance of the accords reached during the December visit of the Russian President to India, the Russian company Rosneft and the Essar Group signed during the BRICS summit in Ufa on July 8 this year a long-term contract for oil supplies for the purpose of refining at the Vadinar refinery (Gujarat, India). The contract envisages total supplies of 100 mln tones of crude oil over a period of 10 years. This is truly a landmark event in the history of oil and gas cooperation between India and Russia as it opens up broad prospects for cooperation in related fields.
Moreover, Rosneft and Essar shareholders signed a Term Sheet with regard to the participation of Rosneft in the Vadinar refinery equity capital with a share of up to 49%. The framework of the transaction also includes a retail network of 1,600 petrol pumps in India.
In the energy sector, work is continuing under a contract for designing the second stage of the largest hydroelectric power plant UpperSiang in India, signed in March 2014 by the company "RusHydro International" in consortium with the Institute "Hydroproject". In February this year, the International group of companies "Lighting technology" started the production of lighting equipment for general and special purpose capacity of 60 thousand luminaires per month in the southern state of Karnataka. There are other instances confirming the growing commitment of business communities of the two countries to expand mutually beneficial cooperation.

— What can you say about perspectives of economic cooperation and trade between Russia and India?
— I do not think there are any barriers in our trade. The figures are hovering around $10 billion. Of course, for such giants as Russia and India these are peanuts. We must raise trade. I have been analyzing the reasons and I think that Russian and Indian businesses are both to blame.
On the one hand, maybe, Indian businessmen were spoilt by the former Soviet system of quotas, when, for example, producers of tea had a guaranteed quota of supplying, say, 10000 tonnes of tea. Or the business people from Ludhiana who had a quota of 300 pieces for wool hosiery to be supplied to the Soviet Union. When we became a free market economy, one had to be more active. Maybe our Indian friends are somewhat lazy. They must be hyperactive in the Russian market like the Chinese and, until recently, Turkish companies. We would also welcome investments in pharmaceuticals but your people still prefer to sell us readymade generics. We would like to produce them together in Russia. Transportation is also a problem. We must rejuvenate and more actively use the North-South Corridor.

— What about the Russia-India defence relations which were so robust in all times?
— Defence cooperation is very robust now. It is a very stable relationship. We do not feel jealous when India wants to acquire some weaponry from other sources. We view India as a superpower in the making. For many decades we have been doing everything for India to become militarily, industrially, scientifically strong. It is absolutely wrong when media writes that Russian-Indian ties are not as strong as before. It happens because people do not know what they write. Please, name a country, which would rent a nuclear submarine to India? Name another country, which would refurbish and reconstruct aircraft carrier to make such a nice one as the Vikramaditya.
“Make in India” program is not a novelty for Russia. We have always been working according to this principle. The steel plants at Bhilai and Bokaro are still in India, not in Russia. The HAL factory producing planes is also in India as well as the small antibiotics plant in Rishikesh, which was the first in India’s progress towards superpower status in medicines.
Our relations has always been on a smooth and even keel with the exception maybe of a short period after the democratic revolution in Russia after 1991, when we were immersed so deeply in our own problems that the focus on India was less. It was a period of great hardships for Russia – we were undergoing transformations of never seen before dimensions. Even at that period we tried to sustain our relationship with friend India. President Yeltsin came to India in 1993 to sign the Treaty of Friendship and Cooperation. India around that time also started its economic reforms.

— What are the directions in which it is acquiring significance and gaining weight?
— I think that the statement about the loss of positions in the Russian arms market in India is very much exaggerated. We continue to occupy a unique and leading place in the field of direct supplies and joint production of arms and military equipment for various purposes in India. Today, the Indian Navy and the Air Force have 80% and 70%, respectively, of their equipment from Russia. No other country in the world has such collaboration with India.
Cooperation in this area is based on a long-term program of military-technical cooperation for 2011-2020, which consists of more than 20 intergovernmental agreements. The total amount of contracts signed by India with Russia is over 35 billion dollars, more than with any other country.
The program of modernization of the Indian armed forces envisages bulk imports of modern weapons running into tens of billions of dollars, and Russia holds a key position in India’s priorities. This sphere of Russian-Indian cooperation is characterized by the highest degree of confidentiality and trust. The situation is determined not so much by the plans or even individual target contracts as by the overall accomplished deals and joint projects for the future that are already being implemented. For example, the best supersonic missile in the world "BrahMos", which has already been inducted into service in India is at the same time being adapted for use by all kinds of troops, including air force and submarine fleet, or the fifth-generation fighter and multifunctional transport aircraft. A whole range of other initiatives and proposals for prospective projects are also being considered.
Russia readily shares technologies with India and focuses on joint production of military hardware. Prime Minister Narendra Modi’s initiative to launch a nationwide program "Make in India" offers great opportunities for closer cooperation between Russian and Indian companies. Russia's participation in this programme is primarily seen in the establishment of joint ventures in India in areas that have traditionally formed the basis of bilateral cooperation in the military-industrial as well as in civil production. It is about promoting projects such as the creation of medium multipurpose transport aircraft, fifth generation fighters, and production of components for the MC-21 aircraft. Russia pins high hopes on the production of the modern and highly prospective helicopter Ka-226 that it will be marketing together with Indian partners. Proposals are under consideration for the construction of ships and submarines, production of latest tanks and other modern military-technical equipment that has attracted the interest of Indian partners. Joint production is intended not only with state corporations, but also with major private companies.

— In your opinion, what is the BRICS for India and Russia?
— The BRICS and the SCO summits held in July? 2015 once again showed the identity of approach of Russia and India to the solution of pressing international problems and to strengthening the foundations of a multipolar world. The Indians share our position on the inadmissibility of the imposition of unilateral economic sanctions without UN approval. During the meeting in Ufa, Prime Minister Modi confirmed the view of India that such actions are detrimental to the global economy and make the task of strengthening the economic cooperation among the BRICS nations more urgent.
The BRICS Summit highlighted the need for transformation of the obsolete model of global financial system, creation of new institutions to meet modern challenges. The news about the establishment of the new development bank of BRICS and the pool of reserve currencies was welcomed in India. Indian partners hope that while expanding their activity, they will have better chances of borrowing funds for infrastructure projects, social and humanitarian programmes, which will ultimately strengthen economic stability. The proposals of Prime Minister Modi to conclude a customs agreement, to hold the first BRICS trade fair, to collaborate on the construction of railways and to participate in improving agricultural potential were warmly received.
In Indian political circles, Ufa was now firmly associated with a significant event — the beginning of the procedure for India’s entry in the SCO as a full member. Such an expansion of the organization will, of course, raise its credibility and serve to strengthen the role of SCO in the international arena, promote cooperation in the interests of peace and security, in the fight against terrorism, drug trafficking and other global and regional challenges and threats. This is especially true in the context of reconciliation and stabilization in Afghanistan, joint efforts in countering the threat of ISIS and other dangerous manifestations of radical Islam.
President Putin and Prime Minister Modi met on the sidelines of the Ufa summits. Prime Minister Modi will come to Russia again before the end of the year on a bilateral visit. The preparatory work for this important event has already started. We are looking ahead to meetings of respective working groups and two intergovernmental commissions that will prepare specific proposals for the agenda. The forthcoming summit in Moscow will impart a new impetus to our relationship , raise them to a new level and impart fresh ideas that will enrich Russian-Indian cooperation.

— Has there been any impact of sanctions on the Russia-India relations?
— No, there has not been any impact. Even more, Russia has opened its borders for Indian agricultural produce like cheese, buffalo meat, the export of Indian fruits is also growing, like tangerines and even mangoes. We highly value India’s readiness to help, though Russia has not fallen because of those sanctions. We are not going to die from hunger, let them understand, it was a shot in their own leg, they are harming themselves.

— Can we talk on terrorism? It is the biggest challenge of our times.
— Unfortunately, we are in the same boat with India as regards terrorism. India knows not by hearsay what it means. We have been supporting India in her efforts to counter transborder terrorism, from Pakistan especially. ISIS is another scourge of the world and we are fighting it together. We have a very good machinery of consultations between Russia and India through foreign ministries, security councils and we have contacts between special agencies, we exchange information. It is a very productive dialogue, though not often visible.
You may remember, the first man who was tolling the bell of alarm was Mr Putin in October 2000. When he was speaking in the Parliament, he said that terrorism was the most terrible and most dangerous threat facing our two countries and the world. Mind you, it was much before the 9/11 NY outrage! We like nobody else understand India’s high mission and sufferings from this – like Pathankot, but not only this, the examples are aplenty.

— What about culture and people-to-people contact?
— There are many schools teaching Russian in Delhi and other cities in India now. Russian is becoming more and more popular. Russian classes at the Russian Centre of Science and Culture are absolutely packed. More and more tourists visit Russia. We hope we will have visa free tourist flow between India and Russia soon. Our shining ideal on the bright horizon is to have completely visa free travel between Russia and India. The visa process for business people has been simplified very much. They used to complain it was difficult to get a visa, now they get one even on the basis of a fax invitation. That problem has been removed. Now, there is visa on arrival scheme, which has been a great simplification too. So we need more touristic exchanges, we need concerts. In the second half of this year, we shall have the Festival of Russian Culture.
We welcome the fact that from February 15, India will take the baton of chairmanship in BRICS from Russia. We hope that India’s chair will be productive, fruitful and rich in content. India can offer the world so many good things according to traditions of Indian diplomacy, which we also value very highly. In our view Indian negotiators and diplomats are of highest professional caliber. We highly value our interaction with them, they are excellent but at times rather tough negotiators. A special trademark of Indian diplomacy is a very well prepared background for talks. They are very thoroughly versed in the situation and they have very flexible briefs for talks. There are many things we can borrow from our Indian colleagues.
You can write in capital letters: wrong are those people who try to compare us with other countries. Our friendship and strategic partnership has a separate niche in our mutual interaction. And it would be wrong to say that India is drifting towards the US. Russian-Indian friendship as a bedrock – has been there, as Mr Modi said in Moscow, is there and will remain there. We give India the best we have at our disposal. If India finds anything better elsewhere, we do not feel offended. Olden time notions of “fighting for India” are ideological clichés. We are not going to fight for India, we are going to fight with India against terrorism and other evils of our times.
These clichés were there when the world was divided into two opposing blocks and we were ideologically infested by Marxism-Leninism or whatever it was. Now we do not have any guiding ideology. For example, as Ambassador I cannot be a member of any political party. It is forbidden by law. We are honest in helping India, in maintaining friendship with India. We want to see India strong. We do not have any second thoughts about that. Even in the worst of nightmares we cannot imagine that we shall ever be enemies or be against each other. It is impossible because this friendship has so deep roots and it has permeated into the psyche of the two nations that it is impossible to think of anything like this. We are clear, we are honest, we are sincere in pursuing this course of action.