PM Modi's Russia visit: Prime Minister Narendra Modi's high-profile bilateral visit saw numerous agreements across several critical areas, including trade, climate change, and research. One of the key areas underlined between both sides was the development of cooperation in key energy sectors, including nuclear energy, oil refining and petrochemicals and expanded forms of cooperation and partnership in the field of energy infrastructure.
PM Modi met Russian President Vladimir Putin at an event in Moscow that saw state-owned Russian enterprises announce deals and tout plans for projects involving India. Both sides also discussed increasing cooperation in sectors ranging from nuclear power to shipbuilding and how to fix problems regarding payments.
Russian state nuclear corporation Rosatom said it was discussing building six more nuclear power units in India; the Russian Direct Investment Fund (RDIF) inked pharma, shipbuilding and education agreements; and Russia's second-largest bank spoke of efforts to ease payment flows as trade between the two nations increases.
Why is Russia deepening cooperation with India in nuclear energy?
While Russia's military invasion of Ukraine has attracted heavy sanctions from the West, Moscow has opted to pivot away from European countries towards friendly countries like India and China to diversify and re-orient trade flows. India is also dependent on Russian aid and exports for nearly 60 to 70 per cent of its defence requirements.
The construction of the first two units of India's Kudankulam Nuclear Power Project in Tamil Nadu, which uses Soviet-designed VVER-1000 reactors, began nearly two decades ago as part of a project between India and Russia. All six units are built with Russian technology and equipment supplied by Rosatom.
Rosatom said new areas of cooperation were being discussed - the construction of six more high-power units of Russian design at a new site and some Russian-designed small nuclear power plants, according to the report by Reuters. Rosatom and Indian partners are also discussing the development of the transit potential of the Northern Sea Route (NSR), which runs from Murmansk near Russia's border with Norway eastwards to the Bering Strait near Alaska.
Russia hopes the NSR will transport 150 million metric tons in 2030, up from 80 million tons this year. The RDIF and India's Enso Group agreed on a partnership for joint investments worth up to 20 billion roubles ($227 million) in infrastructure development for shipbuilding, Russian agencies reported.
On the sidelines of the Modi-Putin meeting, RDIF chief Kirill Dmitriev said many Russian companies see huge potential in India. However, a major stumbling block to trade has been payment flows, according to VTB Bank CEO Andrei Kostin, primarily due to Western sanctions.
India-Russia energy cooperation
Additionally, India is also looking to seek deals with Rosneft and other leading Russian oil firms as part of a broader effort to strengthen energy ties, according to Ministry of External Affairs. PM Modi and Putin have set a target of increasing bilateral trade to $100 billion by 2030 from about $65 billion at present, said Foreign Secretary Vinay Kwatra.
India has emerged as the biggest buyer of Russian seaborne oil sold at a discount as Western entities shun purchases due to a raft of sanctions imposed on Russian over its February 2022 invasion of Ukraine. Russia is the top oil supplier to India, the world's third biggest oil importer and consumer.
Both sides also agreed on a programme for bilateral cooperation in trade, economic, and investment spheres in the Russian Far East for the period from 2024 to 2029. This agreement aims to bolster trade and joint investment projects between India and Russia's Far East Region. Additionally, cooperation principles in the Arctic zone of the Russian Federation were established to further enhance bilateral engagement.
Russian entities including Roneft have a majority stake in private refiner Nayara Energy, while Indian companies hold stakes in Russian oil exploration and production projects in the far east. India's ONGC Videsh is seeking a formal approval from the Russian authorities to retain its stake of 20 per cent in the Sakhalin 1 oil project in Russia.
(with inputs from Reuters)
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