Putin Draws India Closer With $10 Billion in Arms, Energy Deals
March 12, 2010, 1:33 PM ESTBy Lucian Kim
March 12 (Bloomberg) -- Prime Minister Vladimir Putin closed more than $10 billion in agreements with India, increasing Russia’s role as a partner in defense, nuclear energy, aerospace and communications.
“Putin has been the architect of the strategic partnership between India and Russia,” Indian Prime Minister Manmohan Singh said after meeting with his Russian counterpart in New Delhi today. “Relations with Russia are a key pillar of our foreign policy.”
Putin, in five visits over the past decade, has spearheaded Russia’s effort to revive Cold War-era ties to India and fend off growing competition for defense and energy contracts from the U.S. and Europe. The Kremlin is playing on Indian ambitions to become a global power capable of rivaling China and sending manned missions to outer space.
Russian companies signed more than a dozen deals, including agreements to deliver India’s second aircraft carrier in 2012, build as many as 16 nuclear reactors and sell 29 MiG-29 fighter jets. India also became the first country to win access to military use of Russia’s Glonass navigation network, a rival to the U.S. Global Positioning System. Putin promised to help send India’s first cosmonaut into space in three years and held open the possibility of joint moon exploration.
While President Dmitry Medvedev hosted Indian, Chinese and Brazilian leaders at a summit of the BRIC group of rapidly developing nations last year, there are few multilateral initiatives. Russia and India share a wariness over China’s ascendancy and its support for Pakistan. India has become Russia’s biggest arms customer, supplanting China.
“Russia, unlike other countries, doesn’t have any military cooperation with Pakistan out of concern for our Indian friends,” Putin said in remarks directed at the U.S. and China. India and Russia agreed to intensify efforts to pacify the situation in Afghanistan, he said.
The biggest thorn in ties has been Russia’s overhaul of the Admiral Gorshkov aircraft carrier, which has been beset by delays and cost overruns. An additional agreement has been signed to deliver the Soviet-made vessel by the end of 2012, Deputy Prime Minister Sergei Ivanov, a former defense minister, told reporters. He declined to name the price.
A deal on the purchase of 29 MiG-29 fighter jets to augment the 16 already ordered was also signed, Ivanov said. The deal is worth about $1.5 billion, Mikhail Pogosyan, general director of RSK MiG, told reporters earlier.
The two countries signed a “road map” on nuclear energy cooperation, which foresees Russian participation in building as many as 16 reactors at three locations in India, according to Ivanov. Russia will build two more reactors at the Kudankulam nuclear power plant where it’s already working, he said.
Other deals signed were a $1.5 billion contract by OAO PhosAgro, Russia’s largest producer of phosphate-based fertilizers, and an almost $500 million agreement to supply diamonds by ZAO Alrosa, the world’s largest producer of the gem.
Trade between the two nations totaled $7.5 billion last year, according to Russia’s Federal Customs Service. The Russian government aims to increase that figure to $20 billion in the next five years.
--With assistance from Bibhudatta Pradhan in New Delhi. Editors: Chris Kirkham
To contact the reporter on this story: Lucian Kim in New Delhi at lkim3@bloomberg.net
To contact the editor for this story: Chris Kirkham at ckirkham@bloomberg.net
