As President Vladimir Putin makes his first visit to India since 2021, a key item on the agenda is bolstering Russia's partnership with India in the development of Russia's Far East. This strategic move reflects Russia's ambition to diversify its economic and geopolitical alliances amidst Western sanctions and to tap into India's growing economy and its need for resources and energy.
Several factors drive Putin's interest in partnering with India for the development of the Far East.
Economic Opportunities: The Russian Far East is rich in natural resources, including oil, gas, minerals, and timber. Russia seeks Indian investment and expertise to develop these resources and build infrastructure in the region. India, with its rapidly growing economy, represents a significant market for these resources and a potential source of capital and technology. Bilateral trade increased by 12% in 2024, reaching $63.6 billion, but is heavily reliant on India's import of discounted Russian oil, which could be diversified.
Geopolitical Strategy: Russia aims to demonstrate that Western efforts to isolate it have failed by strengthening ties with major global players like India. For Putin, the visit highlights that Russia still has the support of a major global player. Closer cooperation with India in the Far East can serve as a counterweight to Western influence in the region and enhance Russia's geopolitical standing.
Energy Security: India has a strategic interest in ensuring long-term energy security in the Russian Far East. Cooperation in oil and gas projects, such as the Sakhalin-1 project, can help India diversify its energy sources and reduce its dependence on other regions. India is likely to push for the restoration of a 20% stake for ONGC Videsh in the Sakhalin-1 project.
Defense Cooperation: Russia has been a major supplier of arms to India for decades, and defense cooperation remains a strong pillar of the relationship. The summit is expected to cover the development of advanced BrahMos missile variants and other defense projects. This cooperation not only strengthens India's defense capabilities but also provides Russia with a crucial market for its military hardware.
Labor Mobility: Russia is facing a labor shortfall of an estimated 3.1 million jobs by the end of the decade and is seeking Indian workers for its construction, technology, and manufacturing sectors. The India-Russia labor mobility agreement could be a crucial boost for Indian skilled and semi-skilled workers seeking jobs.
Challenges and Considerations: Despite the mutual benefits, several challenges and considerations could impact the partnership. The tightening of U.S. sanctions on Russia may affect India's ability to purchase Russian oil and invest in Russian projects. There are concerns that closer ties with Russia could trigger a reaction from the U.S. government, potentially leading to tariffs or other punitive measures. India must also balance its relationship with Russia with its growing ties with the U.S. and other Western countries.
Overall, Putin's push to partner with India for the development of Russia's Far East is driven by a combination of economic, geopolitical, and strategic interests. While challenges remain, the potential benefits of this partnership are significant for both countries, and it is likely to remain a key focus of the India-Russia relationship.
