17th Indo - Russia Summit

•  India and Russia signed a total of 16 agreements at the 17th annual bilateral summit in the western Indian state of Goa.

Highlights of the summit:

• In a boost to India's ‘Make in India’ initiative the countries agreed to jointly manufacture 200 Kamov 226T multi-use helicopters in India.
• The agreements on manufacturing of Kamov 226T helicopters, construction of frigates; and acquisition and building of other defence platforms are in synergy with India’s technology and security priorities
• New Delhi also agreed to buy three Project 11356 frigates. India has six frigates of the Talwar class, the forerunner of Project 11356, which were built at the Yantar shipyard in Kaliningrad.
• India will purchase five S-400 Triumf air defence missile defence system from Russia.
• Russian oil major Rosneft, along with its partners, bought India’s Essar Oil in an all-cash deal, which is valued at almost $13 billion. This is the largest ever foreign acquisition in India and the largest outbound deal ever made by a Russian company, according to Reuters. Rosneft gets a 49 per cent stake in Essar Oil and the two partners, Netherlands-based Trafigura and a Russian fund United Capital Partners, will hold another 49 per cent in equal parts. Minority shareholders will hold the remaining 2 per cent once the company is delisted.
• Russia also agreed to step up investment in India’s infrastructure. The Russian Direct Infrastructure Fund and India’s National Infrastructure Investment Fund will each invest $500 million to create a joint $1 billon infrastructure fund for India. Russia has set up similar investment funds with China, including an agricultural fund in the Russian Far East.
• Russian companies will also invest in smart cities in the Indian states of Andhra Pradesh and Haryana.
• India and Russia also agreed to organize a military industrial conference later in 2016 and create a bilateral science and technology committee.

Analysis:

• These agreements demonstrate that for the Indo-Russian relations, military technologies and energy sector are the main fields where they can have long term cooperation.
• India would benefit immensely from the acquisition of the S-400. In the regional context the S-400 air-defence system is strategic. It will allow India to control all the air space of Pakistan.
• Russia and India needed to go beyond traditional fields of cooperation and the most efficient way to do that is to use military-technology and energy cooperation for actively engaging private companies, and to expand existing contacts between Russian and Indian companies to dual-use and civil technologies and products.
• India is the world's top defence importer and is undergoing a $100-billion upgrade of its mostly Soviet-era military equipment. India was the erstwhile Soviet Union's closest military ally during the Cold War and a major importer of its military hardware. But in the recent years, Delhi has turned to the United States for supplies, as the two nations forge stronger ties.

By: Vishal