The Hindu Business Line : The bear hug

From New Delhi's point of view, the Russian President, Mr Vladimir Putin's visit is an unqualified success with important initiatives outlined in the fields of nuclear power, Defence, energy, communications, and on the rupee-rouble fund issue. For Moscow, however, the visit's success will be determined by its ability to keep Washington — given its current wooing of New Delhi strategically — at bay.

Russia was first off the mark with a concrete cooperation proposal in nuclear power; ironically, it was a Washington initiative. Moscow has offered to build four more reactors at the Koodankulam complex in Tamil Nadu; two reactors are already being built with Russian help. Moscow has been careful to underscore that the proposal will be governed by the decision of the Nuclear Suppliers' Group (in which Washington will play a crucial role). But the fact remains that the Russians have moved quickly to be in a position to encash on the business opportunities provided by the opening up of the Indian nuclear power sector. A second positive move is the decision to dip into the Rs 4,500-crore rupee credit fund (a relic of the Soviet Union era) to finance joint ventures in India, the two projects listed being a 40,000-tonne-a-year titanium-dioxide unit in Orissa, and the development of a multi-role transport aircraft by HAL and two Russian companies. The third concrete achievement is the signing of an MoU between ONGC and Russian oil firm Rosneft on "setting up two joint working groups — one each for upstream and downstream activities — (demonstrating) the viability of future India-Russia cooperation in the entire hydrocarbon value chain." This promises good results given the already satisfactory energy sector cooperation between the two.

That the "strategic partnership" between New Delhi and Moscow does not preclude stiff bargaining in select areas is clearly indicated by, on the one hand, the general concern shown by Mr Putin in helping India get a large stake in Sakhalin-III without any firm commitment and, on the other, Moscow's interest in bagging the IAF tender for 126 fighter jets, on which Washington is also keen. As regards bilateral trade, it has been resolved to take the turnover to $10 billion by 2010 from the current $3.8 billion. The Russians have blamed high transportation costs for the slow growth in trade. For India, the irritant is visa on which, belying expectations, Mr Putin's visit produced little. This is a fit case to invoke the "special relationship" between the two countries and make it easier for bona fide Indian businessmen to visit Russia.

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