India, Nehru to Modi: From Cold War-era beneficiary of USSR to 21st century benefactor of Russia

'I am confident that this step will give new impetus to the development of economic diplomacy and the growth of ties between the regions of our friendly states,' said Prime Minister Narendra Modi in Vladivostok, Russia

India: From Cold War-era beneficiary of USSR to 21st C benefactor of Russia

Vladivostok: Along the lines of Prime Minister Narendra Modi’s wish expressed yesterday that India would no longer have with Russia buyer-seller relations, an agreement signed with that country today transformed our country from a Cold War-era beneficiary of the USSR to a 21st-century benefactor of that country. India today (5 September) announced an unprecedented $ 1 billion line of credit for the development of Russia’s far east with Prime Minister Narendra Modi vowing that New Delhi would walk shoulder-to-shoulder with Moscow in its quest for the development of the resource-rich region.

Addressing the plenary session of the 5th Eastern Economic Forum (EEF) here, Prime Minister Modi said it was a “unique case” of India providing such special credit line to another country. “For the development of the Far East, India will give a line of credit worth $ 1 billion. My government has actively engaged East Asia as part of its ‘Act East’ policy,” Modi said to a packed house here.

“I am confident that this step will give new impetus to the development of economic diplomacy and the growth of ties between the regions of our friendly states. We will remain active partners in our priority cooperation,” Modi said. Terming it an “unprecedented case”, the prime minister said this was “our launching pad” in the Far East where India is “very active”.

Modi said the friendship between India and Russia was not restricted to governmental interactions in capital cities but was about people and close business relations. “India’s connection to Russia’s far east go back a long way. India was the first country to open a Consulate in Vladivostok,” he said.

The prime minister, in the presence of Russian President Vladimir Putin, also unveiled the “Act Far East” policy to boost India’s engagement with Russia’s Far East region. “Let us deepen the bond between India and Russia even further… India is proud of the achievements of the Indian diaspora. I am sure here in the Russian far east, too, the Indian diaspora will make an active contribution towards the region’s progress,” Modi said. “India is proud to be an active participant in the Eastern Economic Forum. High-level delegations from India have come to this prestigious Forum. We look forward to stronger India-Russia cooperation in areas like healthcare, education, skill development and more sectors,” he said.

Russia’s far east deepens the bond between Russia and Asia, Modi said. “This is a region known for courageous and talented people. India looks forward to boosting cooperation with Russia’s far east,” he said.

India concluded around 50 agreements worth $ 5 billion at the EEF-2019, according to the prime minister. “We concluded 50 agreements worth $ 5 billion at this forum,” Modi was quoted as saying by the Russian news agency TASS.

Indian firms have invested over $ 7 billion in taking a stake in Russian oil and gas fields. India ventured into Russia when its flagship overseas firm ONGC Videsh in 2001 acquired a 20% stake in Sakhalin-1 oil and gas field in Far East Russia.

OVL later bought Imperial Energy, which has fields in Siberia, as also stakes in Vankor oilfield in eastern Siberia.

Indian Oil Corporation and its partners have picked up 29.9 per cent stake in a separate Taas-Yuryakh oilfield in East Siberia.

Russian oil firm Rosneft in 2017 bought Essar Oil, which operates in Vadinar oil refinery in Gujarat and some 5,500 petrol pumps, for $ 12.9 billion.

Modi appreciated the vision of Putin for the welfare for Russia’s far east, saying the President has opened up investment opportunities for India in the region. “EEF is an example of President Putin’s stupendous efforts to further develop the Far Eastern Region and India will support him in this endeavour,” he said.

“By declaring the development of the Russian Far East a ‘national priority for the 21st century’, President Putin has taken a holistic approach towards improving everything ranging from economy, education, health to sports, culture or communication,” the prime minister said.

History of India-Russia relations

Says Mastny Vojtech’s “The Soviet Union’s Partnership with India” in the Journal of Cold War Studies, a cordial relationship with India that began in the 1950s represented the most successful of the Soviet attempts to foster closer relations with “Third World” countries. The relationship began with a visit by Indian Prime Minister Jawaharlal Nehru to the Soviet Union in June 1955, and First Secretary of the Communist Party Nikita Khrushchev’s return trip to India in the fall of 1955. While in India, Khrushchev announced that the Soviet Union supported Indian sovereignty over the disputed territory of the Kashmir region and over Portuguese coastal enclaves such as Goa.

Foreign policy expert Rejaul Laskar’s “Rajiv Gandhi’s Diplomacy: Historic Significance and Contemporary Relevance” reads: During the 1980s, despite the 1984 assassination by Sikh separatists of Prime Minister Indira Gandhi, the mainstay of cordial Indian-Soviet relations, India maintained a close relationship with the Soviet Union. Indicating the high priority of relations with the Soviet Union in Indian foreign policy, the new Indian Prime Minister, Rajiv Gandhi, visited the Soviet Union on his first state visit abroad in May 1985 and signed two long-term economic agreements with the Soviet Union.

Live Mint wrote in 2014, “… one wonders if his initial interactions with the Americans had been more fruitful, would he have been so keen on the principle of non-alignment? Nehru’s visit to the US in 1949 was successful with everyone except the people who mattered. Secretary of state Dean Acheson later wrote that Nehru was ‘one of the most difficult men with whom I have ever had to deal’.”

What followed was worse. Dilip Bobb wrote in India Today, “The Russian agency declared India as ‘the model of KGB infiltration of a Third World government’ with ‘scores of sources throughout the Indian government, in intelligence, counter-intelligence, defence and foreign ministries, the police …’

“The agency had so many agents and sources that then KGB chief Yuri Andropov turned down an offer by an Indian cabinet minister for a payment of $ 50,000 in exchange for information. Suitcases of cash were sent to then prime minister Indira Gandhi for her party’s war chest, not to mention vast sums of money funnelled to the CPI,” Bobb wrote in his article dated 3 October 2005, quoting from The Mitrokhin Archive II.

The book contains damning accounts of the Congress regime like “Indira Gandhi, codenamed VANO by the KGB, was sent suitcases of money meant for the Congress coffers. On one occasion, a secret gift of Rs 2 million from the Politburo to the Congress(R) was personally delivered by the KGB head in India Leonid Shebarshin. Another million rupees were given on the same occasion to a newspaper supporting Mrs Gandhi.”

This had begun with Nehru’s anti-American policy. When India’s first prime minister chose the Soviet Union instead of the US as its ‘all-weather’ partner, the Americans had to tilt towards Pakistan as a counterweight. This virtually made New Delhi an extension of Kremlin. The first defence minister Krishna Menon voiced his anti-American views openly. The KGB, says The Mitrokhin Archives II, assumed Menon would succeed Nehru and funded him generously.

Back to the present

Excerpts from the book Foreign Policy of India by Subhash Shukla
Excerpts from the book Foreign Policy of India by Subhash Shukla

Sirf News editor-in-chief Surajit Dasgupta says, while PV Narasimha Rao is credited with liberalising the Indian economy, he must take the blame for being swept off his feet for old times’ sake when the USSR collapsed. The rouble had turned cheaper than the rupee, yet the Rao regime paid Russia back at the pre-1991 exchange rates. The unduly high rate was justified with the claim that India was repaying in the form of exporting Indian goods (at concessional rates) to Russia.

The India-Russia relations evolved under the Atal Bihari Vajpayee regime, with the bilateral trade between the two countries in 2002 at $ 1.5 billion. This increased by over seven times to $ 11 billion in 2012. The Modi and Putin governments have set a bilateral trade target of $ 30 billion by 2025.

Prime Minister Modi had, earlier today, emphasised India’s commitment to becoming a $ 5 trillion economy by 2024.

Modi, who arrived in Russia on a two-day visit on Wednesday, is the first Indian prime minister to visit the Russian far eastern region. He arrived here to participate in the 20th India-Russia annual summit with President Putin and the fifth meeting of the EEF.

The forum focuses on the development of business and investment opportunities in the Russian far eastern region and presents enormous potential for developing close and mutually beneficial cooperation between India and Russia in the region.

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