Narendra Modi in Russia: After OBOR boycott, routine agreements don't portend well for New Delhi

Prime Minister Narendra Modi's three-day visit to Russia ended on Friday. And going by the official communique, it appears to be successful. Modi attended the International Economic Forum session at St Petersburg, and India would henceforth avail opportunities to hold free trade talks with the Eurasian Economic Union (EEU).

Going by our industry secretary's claim, the current volume of trade between India and EEU, which stands at a meagre $8 billion, is likely to go up to $60 billion in 10 years.

The realisation of such an ambitious goal, however, would depend on several factors. For the time being, Russia's trade minister has assured that an agreement between EEU and India will be signed within two years. It was also announced that India would become a member of the Shanghai Cooperation Organisation (SOO) in June this year. However, it may not be considered a big achievement to India's credit by then. The SCO was founded in 2001 by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan as a political, military and economic co-operation organisation; India and Pakistan were granted membership status in 2016, and the formal announcement of their membership would be ratified at the summit meeting later this month. To that extent, it is not a specific outcome of Modi's visit to Russia.

Coming to the specifics, India and Russia signed five agreements during this visit. The most publicised agreement was for the completion of the third stage of the Kundankulam nuclear power plant in Tamil Nadu by the joint collaboration of the two countries. This would involve setting up of two more units of the controversial nuclear plant.

Narendra Modi with Vladimir Putin. AP

Narendra Modi with Vladimir Putin. AP

There was also a decision to hold the first tri-services exercises. There was also an agreement to start joint manufacturing of frigates. Some agreements were also signed between India and Russia to further cooperation between cultural ministries, railways, and on issues like intellectual property rights.

So far, so good. But doesn't that make the outcome of the Indian prime minister's visit a routine exercise, bereft of any major strategic significance? And if so, what were the expectations? There was an expectation that India would — having taken the bold decision to boycott the 'One Belt, One Road' (OBOR) project, a major Chinese initiative — initiate a grand project of its own to counter Beijing's move.

The Chinese initiative, which was formally launched on 14 May this year, had heads of State from 29 countries, including Russia's Putin and representatives of over 100 nations, present in Beijing to show solidarity with China. Boycotting a project of such gargantuan international implications calls for extraordinary courage of conviction. Narendra Modi's government demonstrated that courage by refusing to send even an ambassador to attend that conclave.

But showing courage is not enough. It is also necessary to initiate countervailing measures to make up for the loss of economic benefits that would have accrued from the 'Belt and Road' initiative. It is not for nothing that more than 100 countries were willing to be associated with it; they saw in it the potential for larger economic collaboration. It was a win-win situation for all.

But India's objection to the China-Pakistan Economic Corridor (CPEC) is based on our geo-strategic considerations and is well-founded, even if that deprived us of a major economic platform in our neighbourhood.

What then is a viable alternative for India? Everyone expected that prime minister Modi's Russia visit would set in motion the ambitious International North South Transportation Corridor (INSTC) that has been virtually in cold storage for several years. It was way back in September 2000 that India, Russia and Iran signed an agreement to establish the INSTC, with a vision similar to China's when Beijing launched OBOR. The INSTC project took off well, with all three countries ratifying the agreement and bringing it into force in May 2002. Later, 11 other countries like Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Oman, Syria, Tajikistan, Turkey, Ukraine and Bulgaria (observer status) joined the agreement.

INSTC is a much more ambitious project than OBOR in the sense that it is a 7,200-km-long multi-modal project (it would provide for ship, road and rail transportation). The corridor seeks to connect the Indian Ocean and Persian Gulf to the Caspian Sea via Iran, Russia and North Europe. Just as OBOR would provide a lifeline to the Chinese economy while boosting trade of all participating countries, INSTC was to throw a lifeline to the Indian economy by ensuring faster movement of goods from India to all the countries on this corridor.

India and Russia had then prepared a joint project report that said: "The main ITC route begins in the ports on the west coast of India (particularly Mumbai), passes along the sea to the Iranian ports of Chabahar and Bandar Abbas, and from there by land to Iran's Caspian Sea coast and beyond — or across the Caspian Sea to Astrakhan, or overland to Central Asia or the Caucasus to Russia and northern Europe."

As per the INSTC project, India had plans to use the Chabahar port in Iran in the same way as China, with its OBOR project, envisaged the use of Pakistan's Gwadar port, which is just 72 kms east of the Iranian port.

But sadly for us, OBOR is a living reality today whereas INSTC is languishing in the backburner. Inauguration of the OBOR project last month — and more importantly India's boycott of it — should have propelled the Modi government to fasttrack the INSTC project as a counter to OBOR.

But what was the outcome of Modi-Putin entente in this regard? The joint statement issued at the end of Modi's three-day visit to Russia included this bland paragraph: "We appreciate the compelling logic of regional connectivity for peace, progress and prosperity. We believe that connectivity must be strengthened. It should be based on dialogue and consent of all parties concerned with due respect to sovereignty. The Russian and Indian sides being guided by the principles of transparency, sustainability and responsibility, reiterate their commitment to building an effective infrastructure for the International North South Transport Corridor (INSTC)…"

The reiteration of good intentions as reflected in these words was as tame as it could be. No specific time frame was delineated. Like it has happened in every previous summit meeting between India and Russia, the INSTC project was once again committed to an uncertain date in future.

In the immediate aftermath of the OBOR boycott, this does not portend well for India's diplomacy.


Published Date: Jun 03, 2017 10:06 am | Updated Date: Jun 03, 2017 10:06 am


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