Modi-Putin Strengthen Ties As India Balances Washington & Moscow

At a time when Russian President Vladimir Putin is ostracised by much of the Western world, he was welcomed in New Delhi with pomp and ceremony. The optics were unmistakable, Prime Minister Narendra Modi was at the airport to receive him with a hug, and both leaders rode in the same car straight to the PM’s home for a quiet informal dinner on Thursday, emphasising the excellent personal bond the two share. Friday began with a ceremonial welcome at the Rashtrapati Bhavan grounds.

After laying a wreath at the Mahatma Gandhi Samadhi, he got down to business, holding bilateral talks with the Prime Minister that continued over lunch in Hyderabad House. In his opening statement to reporters after talks with Putin, Modi showered him with fulsome praise, calling him a visionary leader and thanking “…my friend, for this deep friendship and unwavering commitment to India”. 

A number of bilateral agreements and memorandums of understanding to promote trade and business were signed during the meeting. These include a labour mobility and health agreements, culture, trade as well as several business-to-business Memorandum of Understanding. In an effort to regulate legal migration for workers, India in recent months have signed a number of mobility pacts with various countries. Russia is looking at India for skilled workers in IT, construction and textiles. “Economic cooperation, I would say, is the driving impulse and the most important focus of this particular visit,” foreign secretary Vikram Misri said in a briefing later. A roadmap for the Development of Strategic Areas of India Russia Economic Cooperation, till 2030 was adopted at the summit to further enhance trade. To facilitate the long-term supply of fertilizers, there are joint ventures in this sector.  The India-Russia business forum was also addressed by both leaders calling on captains of industry from both countries to expand and further trade. Reducing India’s huge trade deficit with Russia is in sharp focus.

Trade has largely been one-sided with Indian exports at a measly $5 billion, while Russian exports to India last year was at roughly $64 billion. Quoting from the Joint Statement released after the summit, Misri, noted that “the leaders emphasised the special nature of this long standing and time-tested relationship, which is characterised by mutual trust, respect for each other’s core national interests and strategic convergence.” 

The statement framed India-Russia relations as that of two major powers with shared responsibilities that “... continues to be an anchor of global peace and stability’’ in an uncertain world.  The summit is taking place in the backdrop of a diplomatic downturn in India-US ties, with US President Donald Trump slapping a steep 50 per cent tariff on Indian imports, with half of it linked to the purchases of discounted Russian oil. Trump’s threats have led to the reduction of oil imports from Russia both from private companies and the state-owned refineries. At the same time India has ramped up oil imports from the US. 

These issues must have come up during the talks; however, Misri stuck to the line that the government had no hand in decisions taken by either private or listed state-run companies on the purchase of oil. He reiterated the line that New Delhi always touts when the issue of oil imports comes up.  “We have been clear that as significant importers of energy our priority is to ensure that over one billion Indians get secure energy supplies. So, we diversify imports according to market conditions.” President Putin however clearly said that Russia stands ready to provide “uninterrupted shipments’’ of fuel to India, in his media statement after the talks. To insulate trade from Western sanctions, India and Russia are hoping to continue jointly developing “systems of bilateral settlements through use of the national currencies” the process is already in place but needs further fine-tuning.  “Additionally, the sides have agreed to continue their consultations on enabling the interoperability of the national payment systems, financial messaging systems, as well as central bank digital currency platforms,” the joint statement said.

 President Putin briefed the Prime Minister on Ukraine, and the talks Russia has had with US envoy Steve Witkoff and Trump’s son-in-law Jared Kushner in Moscow earlier this week. “We welcome all efforts for a peaceful and lasting solution to this issue. India has always been ready to contribute and will continue to do so,” Modi said in his address to reporters.  India is hoping that a peace deal on Ukraine is quickly worked out. If the situation deteriorates and there is a breakdown in relations between the US and Russia, India will find itself in a sticky position. India needs both Russia and the US for its development and the Modi government is aware of that. It does not wish to jeopardise its ties either with Russia or the US.