Russia turns to India to stave off recession

By Agencies in New Delhi | China Daily | Updated: 2014-12-12 07:46

Putin hopes to secure defense and energy deals as Western sanctions bite

Russian President Vladimir Putin was holding talks with Indian leaders on Thursday to strengthen trade and energy cooperation with Asia's third-largest economy, as Western sanctions threaten to push his country's economy to the brink of a recession.

Putin's discussions with India's Prime Minister Narendra Modi are expected to focus us on deepening ties at a time when New Delhi is perceived to be drawing closer to the United States, especially in areas such as defense and investment.

Indian officials said nearly two dozen agreements on space, defense cooperation and energy were likely to be signed.

"Looking forward to a productive visit that will take India-Russia ties to newer heights," Modi tweeted.

Putin's visit comes as Russia is faced with plunging global oil prices and a depreciating rouble that has battered its economy.

Russia's relations with Western nations have plummeted since it annexed Ukraine's Crimean Peninsula in March. The US and Europe have imposed sanctions for what it says is Moscow's role in providing Ukrainian militants with personnel and arms, something Moscow denies.

The annual summit meeting would provide an opportunity for the two nations to take stock of the "special and strategic partnership" that the two countries enjoy, said Ajay Bisaria, the top official in India's Ministry of External Affairs.

"It is a very significant visit," said Bisaria. "Russia is a long-standing and a steadfast partner for India."

During the Cold War, India and the Soviet Union shared a close relationship, while the US tilted toward India's neighbor, Pakistan, especially in the dispute over the Himalayan region of Kashmir.

India bought billions of dollars worth of military hardware from Moscow during the Soviet era.

Biggest arms importer

In recent years, India has become the world's biggest arms importer, with an economic boom enabling it to modernize its military, which has a huge shopping list including fighter aircraft, tanks, submarines and other defense equipment that Moscow hopes to sell.

During the past decade, India has tried to diversify its defense purchases, buying military hardware from the US, Israel and France. Last week India said it was very close to clinching a $15 billion deal with France for 126 fighter aircraft.

Despite its attempts at diversification, Russia would continue to be the prime supplier of military hardware, Indian officials said.

"Russia is our primary defense partner, and will remain so for decades," Bisaria said.

Putin has voiced hope that energy cooperation with India will increase, saying Moscow welcomes Indian energy companies tapping oil fields in the Arctic. Russia plans to start supplies of liquefied natural gas to India starting in 2017, he said.

On Thursday, Russia's State-owned Rosatom said it would supply 12 nuclear energy reactors to India over 20 years, under an agreement aimed at boosting nuclear energy cooperation signed by the two countries in New Delhi.

A 1,000-megawatt reactor is operating at the Russian-built Kudankulam power station in India's Tamil Nadu province, with a second due to come on line in 2015.

AP - Reuters