The fundamental challenge is that our relations with Russia are massively concentrated on defence trade

by Nitin Pai

Last week, several members of India and Russia’s think tank community sat down for two days of conversation in Moscow. Since so much of our knowledge on Russian affairs comes filtered either through the prism of Western reportage or though pro-establishment Russian media, engaging in closed-door discussions with leading intellectuals and policy influencers was particularly valuable. Here are some of my impressions after participating in the talks.

First, what came across quite clearly is that the Russian establishment sees itself in a state of siege. US sanctions have raised international pressure on the country — even if the Russians are loath to admit — and are pushing Moscow into greater isolation. Consequently, the paranoia of the siege mentality colours both elite and popular perceptions of international events. So the Russians might see, say, India’s closer engagement of the United States, Australia and Japan, in the form of the Quad, as partly inimical to their own interests. They are aware but do not give too much credence to the argument that the Quad is part of India’s effort to manage China’s rising power in our extended neighbourhood.

Second, our Russian interlocutors uniformly disliked the idea of the ‘Indo-Pacific’. They see the term as an American construct to preserve US dominance in the region. They are miffed that the Indo-Pacific, which they see as implicitly excluding Russia, has replaced the term ‘Asia-Pacific’, which included them. Again, they are aware but don’t think important the Indian argument that ‘Asia-Pacific’ excluded us, while ‘Indo-Pacific’ doesn’t. It’s not merely semantics, because political, economic and security arrangements follow how a region is defined, and the Russians are having major FOMO.

Third, the Russians are quite aware that China is a long-term threat to them, not least in the Far East where their border divides regions with massive demographic asymmetry. Population densities on the Chinese side of the border can be ten to a hundred times higher than on the Russian side. Further, Chinese influence is fast rising in the Central Asian republics that have long been in Russia’s sphere of influence. Yet, the Russians say they have no choice but to get onto the same side as China in the short-term, both for reasons of domestic economy as well as international politics. Therefore, where China is undermining the Western-created liberal international order in order to remake it to suit its own interests, Russia is mostly playing along.

This is the second mistake the West made over the past two decades. The first was to underwrite China’s rise as a global power in the hope that it would become a ‘responsible stakeholder’ in the extant world order. The second was to push the boundaries of the European Union and NATO across what Russia saw as its geopolitical red lines. Western support for the ‘colour revolutions’ in Georgia and Ukraine fifteen years ago turned the Russia establishment into an adversary. In other words, the West not only nurtured its own strategic challenger, but also went on to provide it with a very useful ally.

Fourth, while seeking Indian support in their contest with the United States, the Russians have begun to use Pakistan as a bogey to persuade New Delhi. One Russian analyst explicitly warned us that they would sell advanced military equipment to Pakistan — including fighter aircraft and helicopters — should the order book from India decline further. None of my colleagues at the conference blinked, but it appeared to me that the Russians were getting somewhat desperate with New Delhi’s drifting away.

So, what should we make of our relations with Russia?

The fundamental challenge remains that our relations with Russia are massively concentrated on defence trade. It is best to purchase defence equipment from a country with whom we have broad and deep trade relations; failing which, to try and build such relations with the country we’re buying arms from. Russia falls into the latter category. Yet, bilateral trade has remained around $10 billion for years, with the balance being in Russia’s favour. India trades more with Venezuela, Belgium and South Africa. To be sure, New Delhi has been aware of this. If you look at joint statements, you’ll find the need to expand trade and investment mentioned several times. Official targets have been set for trade and investment.

Unfortunately, setting targets is very different from achieving them. That’s because in the Indian economy, at least, it is the private sector that drives trade and investment. I found that many of our Russian interlocutors had yet to appreciate that the Indian economy was driven by private industry and entrepreneurs, and that the latter had to be courted from Bangalore, Mumbai, Hyderabad, Chennai and other hubs of growth.

To be sure, governments can facilitate greater trade through measures such as permitting invoicing in local currencies. Yet, for trade to take off, business people in both countries must be interested to explore and exploit opportunities. That they are not doing so merely suggests that there are lower-hanging fruits elsewhere.

Will this happen? Or should the ‘normal’ in India-Russia relationship be geopolitical opportunism and transactional arms trade? It’s hard to tell. It’s worth making the effort though, as long as it’s possible to buy Russian gear without having to buy their line too.

Nitin Pai is director of the Takshashila Institution, an independent centre for research and education in public policy