Several western nations and their allies have complained to the Ministry of External Affairs about the unusually high quantum of business deals in monetary terms reached between India and Russia during the 15th India-Russia annual summit in New Delhi on 11 December.
The complaining nations include the United States and Ukraine. They have questioned India’s wisdom in going ahead with boosting business and economic relations with Russia at a time when the West has imposed severe sanctions on Russia for its alleged sins of omission and commission over the recent Ukraine/Crimea crisis.
A key official confirmed to this writer that the Ministry of External Affairs was actually inundated by protests from countries which are tooth and nail opposed to Russia.
Their main concerns are that India has given its go-ahead signal for a vast range of bilateral cooperation projects which are worth $100 billion as reported by Firstpost here.
In a way, the reactions from these foreign countries go to show that the Indian foreign policy is actually being run independently and without fear and favour.
In other words, it means that the government of Prime Minister Narendra Modi is pursuing a brutally independent foreign policy, much to the consternation of anti-Russia foreign powers who believed that India would not be supporting their arch enemy – Russia –so pro-actively.
The deals signed during Russian President Vladimir Putin’s visit to India on 11 December may actually go well above the $100 billion mark.
One should not be surprised that the total quantum of deals with Russia, agreed to during Putin’s India visit, may even touch $125 billion. Here is how.
As reported by this writer earlier, the two countries had agreed to Russia constructing 12 more nuclear plants in India at the cost of $3 billion apiece or $36 billion in total.
This is a long term deal. The general practice is to sign deal only for two nuclear units at a time. The agreement on Russia building 12 nuclear plants in India is only an in-principal agreement or a sort of a statement of intent.
The actual deals will be signed in future only. And the modus operandi will be signing deals for two nuclear units at a time. This means that India and Russia would have to sew up six such agreements to complete the list of 12 nuclear plants that Russia would be constructing for India in the long term.
It is a time-consuming and intricate process which will inevitably take years for actual agreements to be inked. By the time the two sides get to the fifth or sixth set of agreements (entailing two nuclear plants in each case), the inflation factor would have to be taken into account.
This means that if a nuclear plant’s construction requires three billion dollars today, the figure would inevitably have to be revised upwards in view of the inflationary factors.
Therefore, a nuclear plant deal which can be signed at $3 billion today at current exchange rates would become dearer because of inflation years down the line.
Apart from nuclear energy, India and Russia have also agreed in principle to a long-term crude oil exports from Russia to India. Modi and Putin have given their nod to this and Rosneft of Russia has entered into an agreement with Essar, an Indian company, to supply a fixed volume of barrels of oil to India each year for the next year.
At current prices, the Rosneft-Essar deal means a price tag of six billion dollars per year. This means that over the next ten years, Rosneft would be supplying Essar crude oil worth $60 billion.
Add to this the $2 billion potash deal, the $2.1 billion deal that 12 Indian companies dealing in diamonds have signed with Alrosa and the $3 billion helicopter deal under Make-in-India project and you get a figure of over $100 billion.
The $125 billion figure is being quoted by this writer as many of these deals are very long term in nature and by the time these are actually signed the prices may well be jacked up because of inflation.
Nations like the US and Ukraine, who have no love lost for Russia, are understandably aghast at the Indian munificence. They are doing what they can do best under the circumstances – lodge a strong protest with the Indian government which they have done.
The Modi government has taken decisions during Putin’s visit in view of the core national interests. This is, and has to be, the ultimate thumb rule for any government that pursues independent foreign policy.
The Modi government is likely to go ahead in implementing every single deal arrived at during the 15th India-Russia annual summit in New Delhi on 11 December without bothering about the nay-sayers from near abroad or far abroad.
