Russia and India sign new defence deals

Jack Farchy and Amy Kazmin
Russian President Vladimir Putin and Indian Prime Minister Narendra Modi applaud during their meeting in Grand Kremlin Palace, in Moscow, Russia, December,24, 2015.
Mikhail Svetlov | Getty Images

Russia and India signed a clutch of defence and energy deals on Thursday as prime minister Narendra Modi visited Moscow to reaffirm one of the world's most valuable military relationships.

Following a meeting with Russian president Vladimir Putin, the two leaders announced deals to build Russian-designed Kamov helicopters in India and for the location of a new nuclear power plant to be built by Russian state nuclear company Rosatom.

India, the world's largest importer of defence equipment, is set to spend $250bn over the next decade modernising its antiquated hardware. But Mr Modi has made it a key policy to push for these new weapons systems and other equipment to be made mostly in India rather than abroad.

Mr Modi hailed the deal for the production of helicopters as the first major defence project under his "Make in India" programme. Under the deal with Rosatom, some equipment for nuclear power plants would also be built in India.

Russia and India have long been one another's top defence partners, a relationship dating back to Soviet times. But in recent years, India has sought to broaden its diplomatic relations and has also been ordering military hardware from a more eclectic array of supplier, including the US.

But Mr Modi has also indicated that he still sees Russia as one of India's most reliable friends, and has made clear that he wishes to revive and deepen the frayed strategic ties, especially in areas such as nuclear power and defence.

Reliance Defence, part of the business empire of Indian tycoon Anil Ambani, on Thursday announced an agreement with Russia's state arms group Almaz-Antey to co-operate on air defence systems for the Indian military.

Russia accounted for 70 per cent of India's arms imports in 2010-14, while New Delhi represented 39 per cent of Moscow's exports, according to data from the Stockholm International Peace Research Institute.

In a two-day visit to the Russian capital, Mr Modi emphasised his personal relationship with Mr Putin and support for the Russian leader's positions. "Despite the various global problems, despite the confrontation against Russia, you have raised your country, your state to a qualitatively new level," he said.

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India has refused to criticise Russia's annexation of Crimea or its intervention in Ukraine even as Russia has been censured by western governments. Among the 16 agreements signed by the two leaders on Thursday was a plan to simplify the visa regime between their two countries.

Mr Modi dined at Mr Putin's residence outside Moscow on Wednesday evening, where the Russian president presented him with a 18th century Bengalese sword and a page from Gandhi's diary.

"India always remembers Russia as a friend. But President Putin has filled new energy in this relationship, filled new enthusiasm and I see him as a friend," Mr Modi said in an interview with Tass, a Russian state news agency, ahead of his visit.

During the Cold War, India and the Soviet Union were major trading partners, with transactions conducted in their two national currencies. However, trade declined with the collapse of the Soviet Union.

Today, bilateral trade between India and Russia is valued at around $10bn, but Indian authorities are hoping to triple that over the next decade. Nirmala Sitharaman, India's commerce minister, recently indicated that India could try to reviving the rupee-rouble trade or even make barter arrangements with Russia.

"Russia is a very old and trusted partner of India and our approaches to a lot of international and regional global issues are similar," S. Jaishankar, India's foreign secretary, told journalists in a briefing ahead of the visit.

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