Home Economy ECONOMY:A SUBTLE TOOL OF TIE BETWEEN RUSSIA AND INDIA

ECONOMY:A SUBTLE TOOL OF TIE BETWEEN RUSSIA AND INDIA

A survey of the course of the history of international relations and politics would reveal the fact that relationships between and among the countries of the world are unavoidable. It is just like in the case of a human being. There is no denying the fact that the strong bond between Russia and India has withstood the test of time. A cursory glance at the perspectives of the Russia-India relationship would reveal the fact that it has been based on high cordiality right from the beginning. It is true that as of now, the position of the 1970s and 1980s are missing from the landscape but there remains the recognition of each other as reliable partners. (Penrod, 2018). This relationship is based on a strong national consensus in both countries that have cut across ideologies or political differences. (Das Kundu, 2010). It has rightly been said that the discussions of the Russia- India partnership in policy circles likewise are still too often shrouded in the mists of nostalgia for the close diplomatic, military, commercial, and cultural ties of the Cold War years with little reference to the new realities in both nations. (Foshko, 2011). That relationship between Russia and India is rooted in history, mutual trust, and mutually beneficial cooperation with each other right from the beginning.  

MECHANISMS

In the process of cementing the bonds of the economic relationship between India and Russia, several mechanisms have played a key role. Among different institutional mechanisms, the Indo-Russian Inter-Governmental Commission (IRIGC) is perhaps one of the largest, significant, and most comprehensive governmental mechanisms that India has had with any country internationally so far. It contains two parts, the first covering Trade, Economic, Scientific, Technological and Cultural Co-operation. In order to boost the economic relationship between the two countries, a number of institutionalised mechanisms at the governmental and non-governmental levels have been devised which has substantially contributed to the development of economic cooperation between the two countries. (Consulate General of India, 2016). While the India Russia Intergovernmental Commission for Trade, Economic, Scientific & Cultural Cooperation (IRIGC-TEC) guides the conduct of economic cooperation at the Governmental level, the Indo-Russian Forum for Trade & Investment and the India-Russia CEO’s Council have evolved into the platforms for facilitating direct B2B interactions between the two countries. 

Apart from the IRIGC, the other bodies are (1) The Indo-Russian Forum on Trade and Investment; (2) The India-Russia Business Council; (3) The India-Russia Trade Investment and Technology Promotion Council; (4) The India-Russia CEOs’ Council and (5) The India-Russia Chamber of Commerce. (Embassy of India at Moscow. December 2014). 

ECONOMIC RELATION

To date, Russia has proved to be a veteran and time-tested trading partner of India in the field of bilateral trade. There is no denying the fact that there exists a very close economic relationship between India and Russia. The domain of trade between the two countries is an area that has been identified and highlighted for special focus by both countries. It has been seen that there has always been an endeavour from both sides to augment and boost this relationship. It is discernible that enhancing the trade and economic cooperation between Russia and India has been marked as a key priority for the political leadership of both countries. It may be referred that in December 1988, an India–Russia co-operation agreement was signed, which resulted in the sale of a multitude of defence pieces of equipment to India.

RECORDS OF BUSINESS

Trade between Russia and India in 2009 was US$ 7.5 billion, in 2010 US$ 8.5 billion, and in 2011 it reached US$ 8.9 billion. During the year 2012, the trade touched US$ 10 billion. During the period from 2013 to 2016, there was a major decline in the trade percentage between the two countries. Records show that bilateral trade in 2014 amounted to USD 9.51 billion whereas Indian exports were USD 3.17 billion and Russian exports were USD 6.34 billion. In 2015, bilateral trade between Russia and India amounted to USD 5.41 billion, with Indian exports to Russia worth USD 1.49 billion and Indian imports from Russia USD 3.92 billion. The cumulative Indian investment between the years 2000 to 2014 in Russia is estimated to be about USD 8 billion, while Russian investments in India are about USD 3 billion. 

In the year 2017, we find that there has been an upward trend in the trade figures. Concerning Russian investment in India in 2017 reached 18bn USD and India’s total investment in Russia was 13 bn USD. while in 2017, trade in services was USD 1095.4 million, it was reduced slightly in 2018 to USD 999 million.  But the figure stood at USD 633.68 million for the period (January – June), 2019

 In 2019, total bilateral trade between the two countries from January-September, 2019 stood at USD 7.55 billion. The year 2020 experienced a major focus on scaling up Russia- India economic ties, but the Covid 19 stood as a deterrent factor.

VISIT OF PRESIDENT PUTIN

The visit of President Putin to India in 2000 may be regarded as a significant milestone in the India- Russia economic relationship. During the visit of President Putin, the Indo-Russian partnership acquired a new qualitative character, that of a Strategic Partnership.  The strategic partnership institutionalized annual meetings which were held between the Prime Minister of India and the President of Russia. Since then, meetings have been held regularly.

VISIT OF PM MODI

It needs a special mention that a new swing in Russia- India bilateral trade relations was observed during the visit of the Indian Prime Minister Narendra Modi to Russia in 2017. A new vista of economic relations was opened after Prime Minister Shri Narendra Modi met with the Regional Governors in June 2017 and between the then External Affairs Minister Sushma Swaraj’s meeting with the Governors of the Far East. To be precise, the Russian Far East is a new focus of Indian policy for strengthening the bonds of economic relationship with Russia. However, during the last few years, India is significantly increasing active cooperation between the States of India and Regions of Russia.  In this regard, a special mention should be made of the working on a ‘Green Corridor’ which aims to ease trade and customs formalities.  In this regard, the two countries have signed a Protocol on 24th December 2015 in order to simplify the visa procedures for businessmen. This will greatly contribute to accelerating the process of more economic ties between India and Russia. Another significant dimension that deserves a special mention is that Russia and India are engaged in major efforts in order to operationalise the International North-South Transport Corridor in other neighbouring countries. These promises to propel connectivity and trade relations between the two countries have accelerated on a much wider scale.  Further, an important new step to integrate the economies of the two countries may be seen in the fact that India and the Eurasian Economic Union have agreed to begin negotiations on a Free Trade Agreement. In addition to these, both the countries have agreed to cooperate in projects in the third countries also.  The Indian and Russian companies have been cooperating in oil and gas exploration in Vietnam. Under this backdrop, it can be said without any iota of doubt that this will contribute significantly to cementing the bonds of the economic relationship between India and Russia. 

CONCLUSION

The collapse of the USSR greatly affected bilateral relations between India and Russia. But in no time there was a gesture on the part of Russia for the revival of its old and classical relations with India. In order to mend the relationship, some changes were initiated in the 1971 treaty with a view to reinforce the mechanism of mutual trust and friendship. As a result, the relationship between the two countries regained its lost momentum. In the renewed version of the Russia- India relationship, the aspect of trade and business became the focal point. However, the new edge in the relationship between Russia and India will provide economic benefits and a new meaning. 

REFERENCES

1. Consulate general of India, Vladivostok, Russia.February, 2016, Overview of India-Russia Economic Cooperation.

2. Das Kundu, Nivedita (2010) – “India – Russia Strategic Partnership: Challenges and Prospects” 

Academic Foundation.

3. Embassy of India at Moscow. (2014)- “Bilateral Relations: India-Russia Relations”. 

December 2014.

4. Foshko, Katherine (2011) – “Re-energising the India-Russia Relationship Opportunities and Challenges for the 21st Century”

Gateway House Research Paper No. 3, September 2011

5. Penrod, Aubree (2018) – “Russia-India Relations: The Significance of Subjective Factors” 

Alpha Edition.

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