$100 bn in just 24 hours: Putin's India visit exerts immense pressure on Obama
The Joint Statement released after the Modi-Putin summit gives broad hints about the upcoming areas of cooperation between India and Russia.
The just-concluded 15th India-Russia annual summit between Russian President Vladimir Putin and Prime Minister Narendra Modi has proven to be an unprecedented success. Key sources told this writer that in money terms all the twenty pacts signed by the two sides covering such areas as oil exploration, infrastructure, nuclear energy, defence and diamonds amount to a whopping $100 billion.
This practically makes the 15th India-Russia annual summit a hundred billion dollar event, something which is unheard of in Indian diplomatic history. Even for Russia this may be only second such instance as Russia had stitched up a $400 billion 30-year energy contract with China earlier this year.
Topping the chart in Indo-Russian bilateral cooperation is the familiar nuclear energy sector. Russia will be building 12 new nuclear plants in India at a cost of $3 billion apiece, sources said. This means that the total cost of these nuclear plants alone would be $36 billion.
The break-up for rest of the $64 billion commercial deals between India and Russia, many of these long-term, was not immediately available.
Interestingly, Putin and Modi had quoted sharply different figures in this context. Putin had talked of 20 nuclear plants while Modi had spoken about just ten.
This is what Putin said: “We had constructive talks on a whole gamut of issues. We are working on 20 nuclear power plant units for India. India and Russia encourage use of nuclear energy for peaceful purposes.”
A few minutes earlier, Modi had remarked thus: "We have outlined an ambitious vision for nuclear energy for at least 10 more reactors."
India has agreed to find another site for locating the new nuclear plant, apart from Kudankulam, to be built by Russia. The new site may well be a BJP-ruled state to expedite matters. Gujarat may be a likely venue, though the second site is yet to be decided.
The first and second units of Kudankulam nuclear power plant (KNPP) had cost India $1 billion each, but the new set of 12 units will cost triple the amount in view of India’s new stringent nuclear liability laws.
This is a win-win situation for both the sides as Russia is the only country that is willing to do business with India and set up new nuclear power plants despite the tough liability laws. While Russia gets a monopoly in India’s nuclear market by default, India also gets to flaunt this achievement to powers like the US, France and others and force them to fall in line.
Significantly till now since the nuclear liability laws were enacted four years ago, no country had come forward to invest in India. But the Indo-Russian deal would be a game changer as other nuclear exporting nations too will have to fall in line sooner or later and India won’t have to amend the liability laws to please the West.
The effort of the two sides is to have an over-arching agreement in place about the 12 new nuclear units costing $3 billion apiece and cut down on cost overruns and project delays. The two sides will not like to repeat the KNPP Unit 1 experience the agreement for which was signed way back in 1988 but the plant started generating electricity only 25 years later.
The two sides signed seven inter-governmental documents and 13 commercial contracts
Prime Minister Narendra Modi said on Thursday Russia will remain India's top defence supplier, even though New Delhi's "options have increased".
The Joint Statement released after the Modi-Putin summit titled 'Druzhba-Dosti: A Vision for strengthening the Indian-Russian Partnership over the next decade' gives broad hints about the upcoming areas of cooperation between India and Russia.
Forget about other sectors like defence, space, infrastructure and diamonds. Focus for now only on energy sector in view of space constraints.
Sample this excerpt from the Joint Statement which gives a sneak peek into how intense the Indo-Russian partnership in the field of energy is going to be in the coming years:
“The leaders envisage broader collaboration between hydrocarbon companies of the two countries in oil and gas exploration and production as well as in LNG projects and supplies. The sides will promote natural gas utilization as an abundant and environmentally friendly source of energy for diverse purposes in their economies, including motor fuel and feedstock. It is expected that Indian companies will strongly participate in projects related to new oil and gas fields in the territory of the Russian Federation. The sides will study the possibilities of building a hydrocarbon pipeline system, connecting the Russian Federation with India. They will also examine avenues for participation in petrochemical projects in each other's country and in third countries. The leaders have encouraged Indian and Russian companies to pursue greater participation in each other's power generation projects, as also in supply of equipment, technology for enhanced oil recoveries and extraction of coal, including coking coal.”
On a side note, Putin’s highly successful India visit will inevitably exert pressure on US President Barack Obama who visits India six weeks from now. But that is a different story.
The writer is FirstPost Consulting Editor and a strategic analyst who tweets @Kishkindha
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