India signs military deal with Russia

  • imageVladimir Putin visits to India
  • $2 billion investment fund
  • Finalised 10 agreements
    Two military contracts, worth about Rs. 20,000 crore
  • Some issues of disagreement also there
  • To take the initial steps towards operating a “ranging station” that will help accurately fix the location of satellites.
  • Equity participation through ONGC-OVL

On Russian president Vladimir Putin’s visit to India, both nations moved further to strengthen their economic relations by inking a pact on a Kremlin-backed $2 billion investment fund and consenting to open talks on a Comprehensive Economic Partnership Agreement (CEPA) that will also involve Belarus and Kazakhstan. At the 12th annual summit, the two countries finalised 10 agreements. Among them were two military contracts, worth about Rs. 20,000 crore.
Issues of disagreement and more:

However, little progress could be made on the issues of disagreement which include:

  • Delay in commissioning aircraft carrier Gorshkov
  • Impasse over clinical trials in Russia
  • Applicability of the Nuclear Limited Liability Act on six new reactors to be set up by Russia at Kudankulam
  • Inability of Russian companies Sistema and Severstal to move ahead with their investment plans in India
  • Tax imposed on Imperial Energy, an Indian company operating in Russia.

Russian company Sistema who suffered a setback after the Supreme Court cancelled all 2G licences, indicated its faith in the India with Glonass, its sister company, signing two pacts in the satellite sector. India has already signed the military side of the deal with Glonass, a group of 34 satellites in 2011.
Both countries also agreed to take the initial steps towards operating a “ranging station” that will help accurately fix the location of satellites. A military side pact on receiving precision signals from Glonass was inked in 2011.
Both nations also decided to further their partnership in the energy sector, which has moved beyond investment (Sakhalin-I) to direct trade (Gazprom-Gail) and is now moving towards joint investment in downstream and upstream sectors.
India’s interests with Russia in Energy sector:

  • Equity participation through ONGC-OVL in existing and new projects in Siberia, Russia’s Far East and the Arctic Shelf.
  • Acquiring equity stake in discovered or producing assets and in proposed Liquefied Natural Gas (LNG) projects in Russia.



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