Outcast Russia turns to Cold War ally India for new billions in trade

Russian President Vladimir Putin traveled to India on Thursday for a one-day summit during which billions of dollars’ worth of economic agreements were signed on energy, precious stones and military equipment and India pledged to retain Russia as its most important defense industry partner.

Perhaps more important for Putin, who has been diplomatically isolated over his aggression against Ukraine and is struggling to keep an economy afloat as global oil prices plummet, was securing Indian Prime Minister Narendra Modi’s declared opposition to sanctions imposed on Moscow without the United Nations’ endorsement.

The European Union and the United States have punished the Kremlin with travel bans and asset seizures affecting scores of top business and political leaders, triggering capital flight by worried investors and steep drops in the ruble’s value against the dollar and the euro.

“India and Russia oppose economic sanctions that do not have the approval of the United Nations Security Council,” Modi and Putin said in a statement issued after their talks.

As Russian and European ties have faltered, Putin has traveled extensively in recent months to shore up economic cooperation with other important states in the region, including China and Turkey.

Political relations between Russia and India have been close since the Cold War, when India was a leading member of the so-called Nonaligned Movement that united many of the Soviet Union’s leftist and Third World allies. But booming economic cooperation between India and the United States since the 1991 Soviet collapse had relegated business ties between New Delhi and Moscow to a back burner.

On Thursday, Putin and Modi agreed to triple their nations’ trade volume to $30 billion by 2025 and signed a “vision statement” on collaboration in building up India’s nuclear industry.

More than 20 trade agreements were signed, Indian and Russian news media reported, including a Russian commitment to deliver at least a dozen reactors for nuclear plants over the next 20 years and joint annual construction of 400 advanced twin-engine Kamov Ka-226T helicopters.

“Even as India’s options have increased today, Russia will remain our most important defense partner,” Modi said, recalling that all three branches of the Indian armed forces have conducted joint exercises with Russia this year.

Russia’s government-owned Zarubezhneft oil company and Oil India Ltd. signed a deal on joint exploration, production and transport of oil and gas, the Russian company’s president, Sergey Kudryashov, told reporters in New Delhi, the Tass news agency reported.

Modi pitched a three-pronged proposal for closer collaboration in the diamond industry, seeking more direct provision of Russian diamonds for India’s vast cutting and polishing network that puts the finishing touches on 90% of the polished diamonds sold around the world, NDTV reported. The Indian broadcaster said Russia’s Alrosa diamond-mining group had signed a dozen contracts during the Kremlin leader’s visit that would be worth about $2.1 billion over three years.

The two sides also agreed to settle more of their trade in their own currencies, the Indian Express reported, a deal that takes pressure off Russia’s shrinking reserves of dollars and euros. It was also suggested during the talks between Modi and Putin that India could join the Kremlin leader’s Eurasian Economic Union, an alternative economic bloc to the 28-nation European Union, whose relations with Russia have been badly strained by Putin’s annexation of Ukraine’s Crimea region and backing for separatist rebels in eastern Ukraine.

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