Before Putin visit, Russia okays key military pact, says it’ll fix trade deficit ‘problem’

Russian President Vladimir Putin, who arrives in New Delhi on Thursday (December 4) for a two-day state visit, will hold talks with Prime Minister Narendra Modi during which a plethora of significant outcomes are expected, including in the trade and defence spheres, to further solidify the bilateral strategic ties.

The Russian leader's trip to India is taking place at a time when India-US relations are going through possibly the worst phase in the last two decades after Washington imposed a whopping 50 per cent tariff on Indian goods, including 25 per cent levies for New Delhi's procurement of Russian crude oil.

Russia ratifies military logistics pact

Russia’s lower house of parliament, State Duma, on Tuesday (December 2) ratified a key military pact with India ahead of Putin’s state visit.

The Reciprocal Exchange of Logistic Support (RELOS) signed on February 18 between the two governments was sent to Duma last week for ratification by Prime Minister Mikhail Mishustin.

"Our relations with India are strategic and comprehensive, and we value them. We understand that today's ratification of the agreement is another step toward reciprocity and, of course, the development of our relations," Vyacheslav Volodin, Speaker of State Duma, said at the plenary session of the house.

The RELOS agreement sets the procedure for sending military formations, warships, and military aircraft of Russia to India and vice versa, and the organisation of their mutual logistical support.

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The agreement will regulate not only the dispatch of troops and equipment but also their logistics.

The established procedure will be used during joint exercises, training, humanitarian aid, disaster relief efforts after natural and man-made disasters, and in other cases as agreed.

In a note posted on the Duma website, the Russian Cabinet of Ministers stated that ratification of the document will facilitate mutual use of the two countries' airspace and port calls by Russian and Indian warships.

Furthermore, the agreement will strengthen military cooperation between the two countries, it said.

India's concerns over massive trade deficit

Kremlin spokesperson Dmitry Peskov said that addressing India's concerns over the massive trade deficit, cooperation in small modular nuclear reactors, and expanding defence and energy ties could be among the focus areas during the summit talks on Friday (December 5).

New Delhi has been concerned about the increasing trade deficit in Moscow's favour. India's procurement of goods and services from Russia amounts to around USD 65 billion, while Russia's imports from India stand at around USD 5 billion.

Also Read: Russia to ratify military pact with India before Putin's visit

Peskov said that Russia is fully aware of India's concerns about the massive trade deficit, and it is working to fix "the problem".

"There is a real imbalance in our trade. We are aware of that. We are selling much more than we buy from India," he said.

"We know that our Indian friends are concerned about that. We are jointly looking at the possibilities of increasing imports from India. We want to buy more from India," he said.

‘Architecture’ to insulate trade ties

Russia on Tuesday pitched for creating an "architecture" to insulate its trade ties with India from pressure by third countries.

The Kremlin spokesperson also called for creating a mechanism to insulate India-Russia trade and energy ties from pressure by third countries, in an apparent reference to western sanctions.

"We should create an architecture of our relationship that must be free of any influence coming from any third country.

"We have to secure our relationship; we have to secure our trade that brings mutual benefit. We have to secure our trade from pressure from abroad," he said.

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The Kremlin spokesperson called for a new system of global trade where the payment system (dollar-denominated trade) is not used as a "political tool".

Peskov indicated that putting in place a mechanism for settling trade in national currencies, avoiding the US dollar-dominated system, may figure in Modi-Putin talks.

"We understand the pressure on India," he said, referring to the US.

On Russian crude oil

On India gradually bringing down purchase of Russian crude oil following US sanctions on two Russian firms, Peskov said the decline could be for a very "brief period" and Russia is confident of averting the impact of the Western restrictions.

"There are sanctions against the Russian oil production sector, but we are finding ways not to let the volume of trade go down. We have deep experience in performing under the regime of these illegal sanctions," Peskov said.

Deepening defence ties

The Kremlin spokesperson, referring to India-Russia defence ties, highlighted the joint production of BrahMos missiles and described the venture as an example of exchange of high technologies.

"We are developing quite a variety of very complicated systems. We are ready to share with India our experience," he said.

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Peskov said there may be discussions on the possibility of Russia supplying Su-57 fighter jets and additional batches of S-400 air defence systems.

Russian cabinet clears MoU for civil nuclear energy

The Russian cabinet has cleared the signing of a memorandum of understanding (MoU) to deepen bilateral cooperation with India in civil nuclear energy during Putin's visit.

Russia's Rosatom nuclear corporation, which is building several reactors at the Kudankulam Nuclear Power Plant in Tamil Nadu, has been authorised to sign the MoU with the relevant Indian authorities on behalf of the Russian government, according to local media reports.

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Dmitry Peskov said Rosatom CEO Alexei Ligachev will be carrying a whole portfolio of proposals, including for cooperation in building small modular reactors, to be tabled at the summit talks in New Delhi.

Earlier reports suggest that Rosatom has expressed readiness to localise advanced Russian-designed reactors in India.

Russia has experience in producing these small reactors and is ready to supply the technology to India, he said.

‘Ready to develop cooperation in every possible field’

To a question on Russia's "limitless" friendship with China, Peskov said Moscow wants the same level of relationship with New Delhi as well.

"We are ready to go as far as India is ready. We are ready to develop our cooperation with India in every possible field."

Peskov said Russia respects bilateral ties between India and China and hoped that both countries are capable of resolving their issues in order to keep global stability and peace.

‘Open for peaceful negotiation on Ukraine’

The Kremlin spokesperson praised the latest mediation efforts by the US to end the Ukraine war "as very effective".

"We hope it will succeed. We are ready to contribute to it," he said hours before US negotiator Steve Witcoff was scheduled to meet Putin. Peskov indicated that the Russia-Ukraine conflict will feature prominently at the Modi-Putin summit.

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"Russia is open for peaceful negotiation; we have to reach our goals.

"We appreciate the position of India. We appreciate the readiness of New Delhi to look for a peaceful solution. We respect the position of Prime Minister Modi," he said.

‘Ready to combat terrorism’

He said Russia is ready to cooperate with India "to combat terrorism".

To a question on Moscow's ties with Kabul, Peskov said: "We're building up our relationship with Afghanistan. We'll continue to develop our relationship with Afghanistan," he added.

On Russia's overall ties with India, Peskov said his country is proud to stand "shoulder-to-shoulder" with India during its historic growth.

(With agency inputs)