Irkutsk
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Moscow

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Far Indian East of Russia

The high potential of Russian-Indian cooperation in the Far East has every chance of moving into a phase of substantive discussion and making constructive decisions.

The volume and quantity of Russian-Indian agreements, joint plans and protocols of intentions on joint initiatives in the Russian Far East will inevitably reach the stage of transition from quantity to quality, promising abundant fruits. But the path to success is not easy, although insurmountable difficulties are not foreseen on it.

Far Indian East of Russia
Photo: INDIA EMBASSY MOSCOW

The Far Eastern vector of Russian-Indian cooperation was re-identified during the February visit of the First Deputy Foreign Minister of India Harsh Shringly to Russia in February 2021. The visit was timed to coincide with the 20th anniversary of the Declaration on the Strategic Partnership of the two countries. In addition to the meeting with the official representatives of the Russian Foreign Ministry, Mr. Harsh Vardhan Shringla spoke to the students of the Diplomatic Academy, separately noting the importance of economic cooperation between India and Russia in the Far East. “We believe that this area has a very high potential. We can develop new industries and help companies wishing to invest in new areas such as coking coal, timber, liquefied natural gas, ”he said.

In his interview with the newspaper Kommersant Harsh Shringla also noted that Russian-Indian relations have an active agenda aimed at implementing significant decisions taken as a result of the Russian-Indian summit, held as part of the Eastern Economic Forum, during the visit of Indian Prime Minister Narendra Modi to Vladivostok.

As you know, the Organization of the Eastern Economic Forum (EEF), being an important platform for building partnerships for the development of the resource-rich Far East, has been attracting many interested participating countries from the Asian mega-region every year since 2015: China, Japan, South Korea, Singapore and others. The Eastern Economic Forum (EEF) in Vladivostok, held in September 2019, became a turning point for the development of Russian-Indian cooperation. Prime Minister of India Narendra Modi was the main guest of the forum. Within the framework of the forum, India and Russia signed several significant agreements and contracts in the military, oil and gas and mining sectors. Moreover, the companies of the countries signed a memorandum on the sale of Far Eastern liquefied natural gas. However, understanding the meaning of these agreements is impossible without addressing the specifics of the Far Eastern vector of Russian-Indian cooperation.

Economic symbiosis of an elephant and a bear

In the 1990s, the interaction of states in the world arena lost momentum, real trade turnover amounted to only a couple of billion dollars. This was due to both the lack of common borders (and features of the relief) and geopolitical considerations. However, starting in the 2000s, India began to show an increased interest in the Russian Far East. The first attempts at joint development of the territory's resources were outlined. In general, today Russian-Indian relations represent an economic partnership in many aspects, where the oil and gas, petrochemical, pharmaceutical and mining industries make up a special share of the trade turnover between the countries. And yet - what economic interests can guide New Delhi's course toward the Russian Far East?

First, the India is in a deficit situation own energy resources in the context of industrial development and high population. Thus, gas consumption in India for 2020 amounted to about 52 billion cubic meters. m. with the volume of own production in 33,7 billion cubic meters. m. As of 2018, imported gas accounted for 49% of the total. Moreover, according to the International Energy Agency (IEA) the share of energy imports will only increase and, according to various estimates, will reach 59% in 2040, despite the fact that now the share of gas in India's energy balance is only 8%. It should be noted that India is making up for the gas deficit exclusively through sea transportation expensive liquefied natural gas (LNG), mainly from the Middle East. In 2019, the country, ranked 4th among LNG importers, imported 32,9 billion cubic meters. m. liquefied gas (LNG). Against the background of these statistics, discussions of the Vladivostok-Chennai sea corridor and joint projects to create sea transport for LNG can be seen as a sign of a clear interest on the part of Indian colleagues in direct gas supplies from Russia. The opening of a new sea route looks logical and logical, as it reduces the distance and time for the transportation of goods between Russia and India. Moreover, already now Indian companies, having previously invested more than $ 5 billion to the Russian mining sector, are participating in the Sakhalin-1 project, and are also considering joint development of Arctic fields. As for Russian LNG, Gazprom and NOVATEK have been actively trading with the Indian company GAIL since 2018. At the same time, the volume of fuel exports to India amounted to about 19,45% of all exports in 2018. In 2019, according to annual report of PJSC Gazprom, India was supplied with 1.1 billion cubic meters. m. of liquefied gas.

Secondly, for India, the Far Eastern possibilities in terms of precious stones may be of particular interest. India is currently the world's largest importer of diamonds and a producer of processed diamonds. India accounted for more than 80% of world diamond production in value terms. Russia is the world's largest exporter of raw materials for them. At the same time, in 2020, the export of the category "precious stones" (diamonds) to India from Russia amounted to about 15%, worth more than $ 1 billion. In 2016, the Russian ALROSA signed an agreement with the Indian company KGK Diamonds Private Limited (KGK) on a partnership in the field of diamond cutting at the Eurasian Diamond Center (EAC) in the free port of Vladivostok. Investments amounted to 2,8 billion rubles. In June 2018, a division of M. Suresh Vladivostok LLC was registered in the Primorsky Territory, which later received resident status the free port of Vladivostok by signing an agreement with the Corporation for the Development of the Far East.

Through hardships to mutual benefit

Despite the potentially broad area of ​​cooperation, Indian specialists, however, see serious costs in expanding Russian-Indian ties in the Far East. Among them: the lack of proper infrastructure in the Far East region, necessary for the extraction of resources and their subsequent transportation to the port; natural and climatic conditions that complicate the development of mineral deposits; investment risks due to sanctions pressure on Russia and internal centralization of decision-making. According to a number of Indian experts, a necessary condition for establishing trade relations between India and the Russian Far East will be the construction of the necessary infrastructure. Moreover, India and Russia should conclude a free trade agreement to stimulate investment in the development of communications and related infrastructure for industrial development in the Russian Far East.

At the same time, the emerging cooperation between Moscow and New Delhi in the Far East can be explained not only by economic interests. The partnership is also based on quite clear geopolitical interests. For example, for India, the use of the Vladivostok-Chennai sea route could counterbalance the Chinese Belt and Road Initiative. For Russia, India can act as a country that is able to balance China's presence in the Far East, which accounts for about two-thirds of direct investment in the Russian Far East.

“Interaction between Russia and India in the Far East is dictated by economic pragmatics and geopolitical complementarities. The key political slogan with which Narendra Modi came to power in 2014 sounded like "Development, development and more development!" The main task of the government of Narendra Modi is not just the accelerated development of India, but a mega-accelerated leap in a number of areas. The resource-rich Russian Far East, which is at the same time an important territory for a balanced geopolitical partnership within Greater Eurasia, can become one of the main areas of bilateral contacts. For Russia, the strengthening of the Russian-Indian Far East vector makes it possible to harmonize the growing eastern turn of Russian policy, justifiably identifying several partner states in it, among which India is one of the main ones. In other words, we are not talking about a far-fetched partnership, but about a partnership that takes into account the national interests of the development of both states, which forms a solid foundation for the constructive study of joint projects in various fields, ”argues the deputy dean of the Faculty of Philosophy of GAUGN, senior researcher of the Department of Comparative Political Science of the Faculty Political Science, Moscow State University Lomonosova Natalia Emelyanova.

The Far Eastern vector of Russian-Indian cooperation, thus, is determined by mutually beneficial cooperation, which makes it possible to solve significant problems of the socio-economic development of both states.

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