Russian President Vladimir Putin and Prime Minister Narendra Modi on Friday foregrounded economic cooperation as “the driving impulse” of their high-on-optics meeting here, with the two countries adopting a “Programme for the Development of Strategic Areas of India-Russia Economic Cooperation till 2030”.
Barring this, no big-ticket announcement emerged from the informal and formal bilateral engagements between the two leaders during Putin’s 26-hour stay in New Delhi for the 23rd annual India-Russia Summit.
What Putin and Modi sought to showcase was a “longstanding and time-tested relationship which is characterised by mutual trust, respect for each other’s core national interests and strategic convergence”.
In keeping with their shared ambition of expanding the economic dimension of the bilateral partnership at a time when there is pressure on India, particularly to cut back on trade with Russia, the two sides explored how to address the trade imbalance that has been accentuated in recent years by New Delhi’s purchase of discounted Russian oil.
While Putin made it clear that Russia is “ready to continue ensuring uninterrupted fuel supplies for India’s fast-growing economy”, underscoring how it is a reliable supplier of resources and everything else necessary for the development of India’s energy sector, there was no official response to this from India.
All that foreign secretary Vikram Misri said on the subject while briefing the media was an iteration of New Delhi’s position that India’s energy sourcing policy is guided by the imperative of ensuring energy security for 1.4 billion people at stable prices.
In his remarks, Prime Minister Modi said “energy security has been a strong and vital pillar of the India-Russia partnership”, but dwelt essentially on the decades-old cooperation in civil nuclear energy, not the more recent purchase of Russian crude that Indian oil companies are now being forced to cut back on because of US sanctions.
The joint statement noted the current and potential cooperation between Indian and Russian companies on oil and oil products; oil refining and petrochemical technologies; oilfield services, upstream technologies and related infrastructure; LNG and LPG-related infrastructure; various existing projects; underground coal gasification technology; and nuclear projects.
The two sides also noted the importance of a speedy resolution of issues related to investment projects in this area and agreed to resolve the various concerns being faced by investors in the energysector.
Stating that economic cooperation was the driving impulse and the most important focus of Putin’s visit, Misri said expanding bilateral trade requires swiftly addressing non-trade barriers and regulatory impediments, and enhancing Indian exports to Russia in sectors like pharmaceuticals, agriculture, marine products and textiles.
The joint statement further said the two countries had agreed to continue jointly developing systems of bilateral settlements through the use of national currencies in order to ensure the uninterrupted maintenance of bilateral trade.
“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.”
Asked to elaborate, Misri said: “Both countries are continuing to work together to promote mutual trade in our national currencies…. Special Rupee Vostro accounts have been opened in significant numbers. They right now form a very effective mechanism in terms of lubricating the trade flows between the two countries….
“There are close to two dozen banks that have opened a large number of special Rupee Vostro accounts that facilitate trade between the two countries currently. One of the major objectives during this visit was to reach an understanding on how to increase Indian exports to Russia so that we can better address the trade imbalance.
“Doing these two things together — handling trade imbalance together with expanding opportunities for settlement in national currencies — will allow us to move forward in this particular objective.”
As for the geopolitical messaging of the visit, the foreign secretary said the very fact that India and Russia had chosen to stress economic issues in a very complex geopolitical environment — when supply chains and trade relationships were under stress, and investments were becoming more and more unpredictable globally — was a message in itself.