India’s Balancing Act

BY NICHOLAS FLETCHER

India and Russia have enjoyed a relatively amicable relationship since the signing of the 1971 Indo-Soviet Treaty of Friendship and Cooperation, which was spurred by the US-China rapprochement and their support for Pakistan, India’s longtime rival.  As such, ties between India and the USSR only became stronger, especially in the area of defense, and by the 1990s the Soviet Union had become India’s primary trading partner and supplier of defense technology, along with a sizable people-to-people exchange.  This friendly, if somewhat transactional, bilateral relationship however has started to fray and show signs of coming apart.  The US has quickly risen to overtake Russia’s position in the defense sector, and Russia is unable to offer stronger economic incentives and protection in the face of China’s growing presence along India’s border. In addition, Russia’s increased ties to Pakistan may very well put this longstanding relationship on its last leg.

Through the defense trade, Russia and India forged a two-decade long relationship of goodwill, and ironically it seems this very trade might spell the partnership’s end. Traditionally, the relationship of these two nations hinged on shared ideals about a multipolar world order, as well as economic relations which have, as of now, become one-dimensional, centered almost exclusively on arms sales.  While trade has increased marginally, rising from $6 billion in 2014 to $10.7 billion this year, and energy relations have deepened, the overall economic relationship remains narrow thanks to sanctions against Russia.  And while the deepening in relations, trade, and personal friendship between Putin and Modi facilitate an impression of strategic bilateral relations, the truth is that changing geopolitical environments influenced by China’s expansion, international sanctions against the Kremlin, and its continuing stagnation economically point to fast-approaching changes for India-Russia relations.

Russia’s economy has been weakened by sanctions, and its relationship with India is almost solely based on defense contracts.  This one-track relationship now hinders Russia as competition has begun to form. While Russia currently holds the defense monopoly, supplying about 60% of India’s imported military equipment by value, a recent SIPRI (Stockholm International Peace Research Institute) report shows that the US is now the second largest arms supplier and is quickly beginning to cut into Russia’s monopoly, with their own arms exports to India growing by 550% between 2013 and 2017.  India’s attempt to diversify its defense procurements, reaching out to Israel, France, and the US, has put Russia in an unstable position.  In the absence of a strong bilateral economic and trade relationship, an Indian partnership with Russia needs to have robust defense ties to function, and any downgrading of said ties could adversely affect this partnership.  Increased presence of US trade and influence is just one of these potential factors.

In April 2018, US Admiral Philip S. Davidson, the then-nominee for the USPACOM (Pacific Command) Commander warned that India could be sanctioned through the Countering America’s Adversaries Through Sanctions Act (CAATSA) if their S-400 missile system deal with Russia was signed. Moving ahead with this deal would cause setbacks for Indo-US relations at a time where both are becoming increasingly close strategic partners.  This puts India in a delicate position; while it needs Russia for arms, an increased partnership risks deepening a dependency pattern and a possible classification by the US as a hostile country, resulting in lost remittance payments worth billions. But moving too close to the US risks pushing Moscow further to China, which Moscow has already started to become economically subservient to, as well as Pakistan, which Moscow has established a strong energy relationship with.  This counterbalance to a stronger Indo-US relationship could result in a loss of Indian influence in the Central Asian sphere.

China is another factor of a weakening Indo-Russian relationship.  India’s most important security challenge currently is the steady growth of China’s economic and military presence along India’s borders as part of China’s ambitious Belt and Road Initiative.  Ideally, India wishes for a thaw in US-Russian relations in order to form a stronger counterbalance against China, but as that does not seem to be on the horizon, India must fall back on the US, Japan, Australia, and Vietnam as primary security partners.  In addition to the security issue, India’s own economic growth spells an inevitable confrontation with China.  Moscow is not in a strong position to aid India against China, which could further strain Indo-Russian ties.

India must find balance here as well.  Beijing poses the largest geopolitical threat to Indian influence in the Asia-Pacific region and the Indian Ocean, and China leads with a current GDP that is four times larger and defense spending almost three times bigger than that of India.  Given Moscow’s weakness and growing economic dependence on Beijing, India will likely see a need to look for another strong player to support its geopolitical ambitions.  The question for Indo-Russian relations is whether or not the Kremlin will back India against China in any future dispute.  Russia’s neutral actions in the Doklam crisis, which was a military border standoff between the Indian Armed Forces and the People’s Liberation Army of China over Chinese construction of a road in Doklam, seems to say no. Coupled with Moscow’s aforementioned reliance on Beijing, this does not inspire much confidence.  If India moves too far West, Russia could shift towards China and form an alliance India cannot afford.  But India also needs that strong counterbalance, and a Western states’ heavier diplomatic weight and economic opportunities mean that India will most likely keep shifting into the pro-Western orbit.

All is not lost, however.  India sees potential for improvement in trade if the North-South corridor through Iran and the Vladivostok-Chennai sea route can be put into service.  However, the most important field would center around economic investment in the Arctic.  The Arctic territory is a sphere Russia dominates and is fiercely protective of, to the point that Russia maintains a cautious and non-committal stance on allowing China to hold observer status on the Arctic Council.  Sanctions have limited Russia’s available Arctic partners, and despite already being heavily reliant on Beijing economically, Russia looks to lessen this reliance through new partners. India is one such partner, with prior cooperation with Russian polar explorers and its establishment of Himadri Station in 2008.  A statement on May 29th by the director of Russia’s Zubov State Oceanographic Institute Yuri Sychev also reaffirmed that Russia was “now ready to expand cooperation” in the Arctic.  Cooperation in the Arctic has constituted a key component in relations since late 2016, when Putin and Modi signed multiple agreements to increase cooperation in Arctic energy and military affairs.

India indeed has a difficult balancing act to perform.  It must keep Moscow, its economic partner and primary defense tech supplier, on its side to maintain a buffer against China’s presence.  However, Russia is already becoming engulfed by China’s larger economy, and forming stronger relations with India’s primary rival Pakistan.  On the other hand, India seeks to curry favor with the US, the largest foreign investor in India and potential usurper of Russia in the defense trade.  Pursuing this alliance grants better economic support and avoidance of sanctions, but risks driving Moscow further to China and India abandoning its goals in Central Asia.  There is a choice that must be made, and it will undoubtably have to be made soon.

Image source: kremlin.ru

About the Author 

Nicholas Fletcher is an intern with the ERA Institute’s Eurasian Conflicts Studies Project (ECSP). 


This article is produced by the Eurasian Research and Analysis Institute, Inc. (ERA Institute), a public, 501(c)(3) nonprofit institution devoted to studying Eurasian affairs. All views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).