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Economic And Energy Ties With Russia

Context

  • Recently, Prime Minister Modi virtually attended the 7th Eastern Economic Forum plenary session (EEF).
  • The EEF promotes development in Russia’s far east.

Relevance

GS Paper – 2: India and its Neighbourhood, Bilateral Groupings & Agreements, Groupings & Agreements Involving India and/or Affecting India’s Interests, Effect of Policies & Politics of Countries on India’s Interests

Mains Question

Discuss the key factors responsible for the deterioration of India-Russia relations, as well as the approach that the two countries can take to rekindle their long-standing bilateral ties. (150 Words)


Eastern Economic Forum (EEF)

  • The EEF was founded in 2015 by Russian President Vladimir Putin.
  • It is held each year in the Russian city of Vladivostok.
  • The forum’s goal is to support Russia’s Far East’s economic development and to expand international cooperation in the Asia-Pacific region.
  • More than 17 different countries have invested in the Far East since the EEF’s inception.
  • China, Japan, South Korea, Australia, New Zealand, and Vietnam are among them.
  • In 2019, India extended a $1 billion line of credit to this region for development.

India’s Engagement with Russia’s Far East

  • India is the world’s first country to open a consulate in Vladivostok (Sangam’ of Eurasia and the Pacific).
  • The Indian Prime Minister was the first Indian Prime Minister to be the chief guest at the 5th EEF (2019).
  • In 2019, India announced a commitment to a “Act Far-East” policy, with the goal of expanding cooperation in this region.
  • International Trade and Commerce: o India and Russia agreed to establish a maritime route between Chennai and Vladivostok to boost cooperation between India and the Russian Far East.
    • This connectivity project, along with the International North-South Corridor, will physically bring India and Russia closer together.
  • Energy: o Indian workers are involved in major gas projects in the Amur region, from Yamal to Vladivostok and on to Chennai.
  • PM Modi recently virtually addressed an online plenary session at the 7th Eastern Economic Forum, which is being held in the Russian city of Vladivostok.

Historical Background

  • India and Russia have had a long-standing relationship. Since the signing of the “Declaration on the India-Russia Strategic Partnership” in October 2000, India-Russia relations have taken on a qualitatively new character, with increased cooperation in almost every aspect of the bilateral relationship, including politics, security, defence, trade and economy, science and technology, and culture.
  • India and the Soviet Union had a strong strategic, military, economic, and diplomatic relationship during the Cold War. Following the dissolution of the Soviet Union, Russia inherited its close relationship with India, resulting in the two countries sharing a Special Strategic Relationship.
  • However, relations have deteriorated dramatically in recent years, particularly in the post-Covid era. One of the main reasons for this is Russia’s close ties with China and Pakistan, which have caused many geopolitical issues for India in recent years.

Key Points of the Speech

  • Economic cooperation with Russia o India is eager to strengthen its Arctic partnership with Russia.
    • He also emphasised the enormous potential for collaboration in the energy sector.
    • He went on to say that Russia, with its supply of coking coal, could become an important partner for the Indian steel industry.
    • There is also room for collaboration in talent mobility.
  • On the Ukraine conflict o Without mentioning the Russian invasion, PM Modi stated that India has emphasised the importance of diplomacy and dialogue since the conflict began in Ukraine.
  • Major global events have caused supply chain disruptions.
    • The Ukraine conflict and the Covid pandemic have had a significant impact on global supply chains, resulting in foodgrain, fertiliser, and fuel shortages.

Significance

  • PM Modi’s remarks came amid Western concerns, including the United States and Europe, about countries purchasing Russian oil.
    • Ukraine has chastised India for purchasing Russian oil.
    • In defence of the decision, India has stated that it is purchasing oil to meet energy needs while minimising the inflationary impact.
  • As a result, India’s willingness to increase economic cooperation with Russia demonstrates that India’s foreign policy is driven by national interests.
  • It will not be dictated by the Western blocs.

 

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October 2022
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