Re-Energizing the Indian-Russian Relationship :

Opportunities and Challenges for the 21st Century

Abstract

Discussions of the Indian-Russian partnership in policy circles are too often shrouded in nostalgia for the close diplomatic, military, commercial, and cultural ties of the Cold War years. They contain few pragmatic prescriptions for re-energizing a relationship that, while truly privileged, is showing signs of structural problems and inertial thinking. The bilateral relationship’s raisons d’être can be traced to the defense industry, where approximately 70% of the installed base of Indian equipment is still Russianmade—a situation rife with problems—and to the energy sphere, where Russia’s dominant position intersects with India’s growing appetite for oil, gas, and nuclear power. Despite some joint successes such as the BrahMos supersonic missile system and the Fifth-Generation fighter aircraft, the two countries have rarely broken new ground in their interactions since the fall of the USSR. Bilateral trade is still below the level of Indo-Soviet trade in 1990. The deficiencies in the pillars of the India-Russia relationship lie in the overly heavy involvement of the state, which accounts for more than two-thirds of the economy in both countries. The state sector alone cannot influence the development of trade, defense, energy, science and technology, or soft power in a globalizing, increasingly competitive market. The stimulation of the private sector, given ample incentives and privileges by both governments, is an essential part of revitalizing the strategic relationship. What’s needed is a new paradigm that will make private sector activity paramount while reinforcing and building on existing state mechanisms. While helping Russia overcome its resource-based economic disability by spurring on other sectors like trade and technology, India can solve its own problems, such as feeding its energy hunger and advancing in science with the help of Russian know-how. This mutually beneficial relationship in which the two up-and-coming powers join forces for stability and mutual profit and gain would be a worthwhile modern take on the “hindirusi bhai bhai” shibboleth.