Russian business doubles

India-China Brawl

By Shivaji Sarkar

It is a global world. One button switches off, another opens. As India gets into a stand-off with China, there are other players who stand to gain. Russia is emerging as a supplier of critical arms and aircraft to many players, including India and China, though some Russian weapons are subject to American sanctions.
Yet China is not a major loser. It still has an advantage on various goods it exports to India for the quantity, prices and in many cases quality. Despite some fall in Chinese FDI in India, New Delhi has to work hard to reduce imports from China. The blocking of 59 apps is symbolic against China’s belligerence on the borders from Arunachal Pradesh to Ladakh. It hurts China but the crisis has triggered the swadeshi, indigenous production move.
Meetings with industry and policy makers have started and this may likely change the Indian manufacturing as well as rules and taxation system. The Delhi High Court’s direction to e-commerce platforms to display the country of origin of products is also likely to strengthen local manufacturing.
India has made small strides on defence production. Total indigenous defence manufacturing will not be easy. Even the mighty United States is dependent on Europe for many supplies. India has diversified supplies for strategic reason and with suppliers’ efforts in its basket the country can further strengthen indigenous production, a process the nation started since independence.
Russia, however, remains a strong supplier not only to India but to China too. The Russian economy needs stability, markets and it would not mind supplying similar wares to both the countries.
First, let’s find out what Russia is supplying to China. The list is not exhaustive. Russian Rostec supplies 24 upgraded maneuverable Sukhoi Su-35 since 2015 worth over $2 billion. It also supplies ground support equipment and reserve aircraft engines. China has been on Russia’s most important Arms’ customers, including Su-27. Foreign sales are important to Russia for maintaining its military production industries. Meanwhile, western countries are not selling their sophisticated arms to China for fear of outwitting them.
India has been a trusted ally since 1960s and the days of 25-year-friendship treaty with Soviet Union by former Prime Minister Indira Gandhi in early 1970s. India has been recipient of many technologies, tools, arms and aircraft. Recall that MiG 21 and 27 aircraft once were the pride of the Indian Air Force. India also operates three squadrons of agile MiG-29 Fulcrum fighters upgraded with additional fuel stores, new radars, modernised avionics and air-to-ground capabilities.
In $847 million deal, MiG will upgrade jets to the MiG UPG over about the next two years. Russian agreement to upgrade 29 MiG airframes is stated to be a good move. A move to sell these to Algeria could not succeed. Interestingly, Russia has offered similar deals to China also for many weaponries.
All suppliers consider India to be a reliable partner as it does not infringe on copyright or goes into production of clones without a technology transfer deal. Despite some deviation by India to some western technologies, it revived late 1990s deals with Russia with Sukhois during the United Front regime to be followed up by the Atal Behari Vajpayee government.
Russia in a joint venture is producing Kalshnikov rifles at Amethi, Krivac frigates in Goa, selling Kamov 226T helicopters and is supplying almost 58 per cent defence needs. It has signed 15 MoUs in areas such as defence, air, and maritime connectivity, open a maritime route from Chennai to Vladivostok, train Indian astronauts for the manned Gaganyaan space project, expand bilateral trade to $30 billion by 2025, sell LNG and have energy partnership. In short, Russia contributes to Narendra Modi’s ‘Make in India’ effort.
On the surface, it looks good for India. But Russia considers China a natural ally and recently asserted that relations are now at their best. Cornered by the US sanctions, Russia is reaching out to East Asia, which is now divided between the US on one side and China and Russia on the other. Russian deals with China add to the capabilities of Chinese Air Force in East and South China Sea. In a way, it is developing into a wider repeat of the cold war.
It strengthens Russia and may not be bad for India, as China, Pakistan and some Al Qaeda type terrorists apparently are working in tandem. The Russian clout can keep China in check though expenses for border management increases. China is also an energy ally of Russia and is keen on having the deal of $400 ‘Power of Siberia’ gas.
The ties, however, are reportedly under some strain as Russia supplies more to India. Moscow is stated to be more comfortable working with India for a variety of reasons, including intellectual property rights. Infringements of IPR have reportedly helped China produce similar weaponries on their own. Still the Chinese market accounts for $2.4 billion of all Russian sales a year. It is small part of total Chinese procurements worth $31 billion. Chinese imports from Russia reduced over the years.
For geo-political interests, in the wake of US-NATO-Europe sanctions on Russia following the Ukraine crisis, Moscow intensified its ties with China in all sectors significantly since 2014. Chinese President Xi Jinping visited Moscow during Russian Victory Day parade. Putin paid back the visit in September 2015 to join Chinese celebrations of the 70th anniversary of victory over Japan.
So the boycott of apps apart, India has to hone up its policies to counter Beijing in a number of ways. The wordy duel apart, India has to leverage its Russian relations to contain China, make more diplomatic moves so that its expansionism is kept under check.
By addressing the jawans at Leh, Narendra Modi has shown that India has the military capability, courage and diplomatic wherewithal to protect its borders. Russian gains can be turned into an Indian gain. The policy path of high prices, irrational restrictions, penalties and considering defaulters as criminals has to change. Modi has taken care of the Indians’ belly with Rs 90,000 crore free food grains till November; he also has to step up efforts to hit the Chinese belly without affecting Indian exports. Transformed rules and astute moves can ease the process of home production and create a vibrant India that should make Beijing wonder what hit it.—INFA