The information coming out of Moscow is littered across the newscape: interpreting and appraising it is our challenge.
Nuclear Power Corporation of India says on 21 May that the hold up in the supply of crucial equipment by Russia will to lead delay the commissioning of two 1,000 mega-watt atomic power plants at Koodankulam in Tamil Nadu by over a year to 2009.
On 15 May, Russia sends a notice banning Indian flights over it’s airspace, which it says will be effective when the current air agreement runs out on 15 June. The notice is later withdrawn.
Russia demands a revision of prices of Sukhoi 30 MKI fighter. Under the $8.5 billion deal, Russia has so far supplied 60 fighters and is ready to deliver 40 more at the current cost escalation of 2.55%. But it wants to double the escalation rate to 5% a year to supply another 138. The additional cost could be anywhere up to $500 million.
Russia also wants several millions of dollars more for refurbishing the Gorshkov aircraft carrier. It also says that the project will be delayed eight months.
Russia has not transferred the modified IL-76 aircraft to Israel into which the Phalcon airborne early warning system will be fitted. In this case too, the delay will be eight months to a year.
After assuring us that they will not, the Russians have permitted China to export the RD93 engines that power the YF-17 fighters to Pakistan.
Are the Russians playing hardball, or is it the way they do business any way? My bet is the former.
Last winter, buoyed by booming oil revenues and its massive gas reserves, Russia decided to bring a number of near-abroad countries such as Ukraine and Belarus to heel. The Russians feel that everyone kicked them around when they were down, and it is now their turn to kick butt, and that is what they are doing. They have retaken strategic control of the oil and gas industry by simply tearing up old contracts and bankrupting companies such as Yukos. Oil export earnings have allowed Russia to increase its foreign reserves from $12 billion in 1999 to some $315 billion at the end of 2006 and the muscle is showing.
But India should have been in a special category. Far from kicking the Russians, we went out of its way to keep the Russian industry afloat. But, gratefulness is a virtue you rarely find in international politics these days.
There was some self-interest in this, considering that 75% of our defence equipment comes from the erstwhile Soviet Union, but there was also a generous measure of altruism. Then outgoing P.V. Narasimha Rao government broke all rules and, at the request of the Boris Yeltsin government, gave the Sukhoi firm emergency funding of $142 million in 1996. The company later got what remains its biggest export contract to date. In 1997, the Baltiisky Zavod naval yard was able to survive because India ordered three frigates from there. This story was repeated in a range of Russian military facilities across the country. As it is, Indian officials complain about the poor serviceability of Russian equipment at any given time.
Clearly, the Russians do appear to be now sending a message to India. They are saying that they are not happy with Indian moves to get closer to the US and that if gratefulness is an issue, India should remember how their “friendship” prices have enabled the Indian armed forces to maintain the force levels they have had since the late 1960s. Further, their hardball is aimed at preventing the US from making any kind of a breakthrough in arms transfer ties with India. The immediate target is the contract for 126 fighters that American companies Boeing Co and Lockheed Martin Corp. are hoping to bag. But the Russian aims are now more strategic.
Both countries need to get their relations on to a more mature keel sooner, rather than later. India needs to realize that the old Soviet Union is dead and that Putin’s Russia is as different from it as chalk from cheese. The Russians, for their part, must realize that their R&D and industry desperately need India, and their tactics could actually be counter-productive. India’s long-term aim is to become an autonomous arms designer and manufacturer. Any country that helps in the process is a welcome partner. But beyond arms, India and Russia have a huge unexploited potential. But to exploit this, we need to remove the cobwebs of the past and the tendency to treat contracts as less than sacrosanct. A hangover sometimes passes off as nostalgia, but we need a professional relationship of mutual benefit.
Manoj Joshi keeps a close eye on geopolitics from his perch as the strategic affairs editor of Hindustan Times. You can respond to the column by writing to email@example.com