NEW DELHI: Russia and India’s leaders announced on Friday a raft of deals worth billions of dollars including for a military defence system, as New Delhi walks a tightrope between Moscow and Washington with a wary eye on China.

The flagship accord announced during a visit to India by President Vladimir Putin was for the formidable S-400 surface-to-air missile defence system, worth $5.2 billion according to an Indian source.

Other agreements — announced following a meeting between Putin and Prime Minister Narendra Modi that began with a hug — were in railways, fertilisers and space, with Russia set to train astronauts for India’s first crewed space mission in 2022.

“We welcome you as a leader of a country which has second-to-none relations with us,” Modi told a joint news conference. “Today we have taken decisions that will make our long term relations even stronger.” Russia “reiterated its unwavering support to India for permanent membership in an expanded UN Security Council” and for India joining the Nuclear Suppliers Group of countries controlling access to nuclear technology, a joint statement said.

Russian state-owned reactor manufacturer Rosatom said in a statement that the two countries want to build six Russian-design nuclear reactors on a new site in India, boost nuclear cooperation in third countries and new nuclear technologies and are considering building nuclear plants together.

Under deals signed by Modi and Putin, Russia will build six nuclear plants in India

The firm said Russia would offer to build its third-generation VVER reactor on the new site and would increase the level of participation of Indian companies in the project.

A Rosatom official said the pact is not a firm contract yet, but an agreement to work towards a contract.

India has not chosen the new site yet, which could be controversial as the country has seen vehement protests against new nuclear sites.

If confirmed, the agreement would be one of the biggest nuclear industry deals in recent years, and would bind the two countries for decades.

Two Russian-built VVER-1000 reactors have been in commercial operation in Kudankulam, southern India, since 2014 and 2017 respectively. Construction on two more started last year with a target for commercial start-up in 2025 and 2026.

Last year, the Russian and Indian governments signed an agreement to build reactors 5 and 6 on the site and Putin said at the time that Russia is ready to build a dozen reactors in India over the next 20 years. “We expect to start building a series of new units at a second site in India in the near future,” Rosatom Director-General Alexey Likhachev said in a statement.

Rosatom has become the world’s largest nuclear reactor builder as the financial problems of the two big Western firms Westinghouse Areva have crimped their ability to develop nuclear plants abroad. Rosatom operates 35 reactors in Russia with a combined capacity of 28 gigawatt and says it has a portfolio of 36 nuclear power plant projects in 12 countries.

Westinghouse and Areva, now owned by EDF, have for years negotiated deals to build reactors in India but have made little progress, partly because Indian nuclear liability legislation gives reactor manufacturers less protection against claims for damages in case of accidents.

Russia and India have been close since the 1950s and Moscow remains its biggest source of weaponry as it prepares itself for perceived potential threats from China and Pakistan.

India has also been irked by Trump’s decision to exit from the 2015 nuclear deal between major powers and Iran, a major supplier of oil to the fast-growing Indian economy.

Meanwhile Indo-Russian annual trade has slipped below $10 billion since 2014, as Modi cultivated closer diplomatic and economic ties with Washington, while Russia has courted Pakistan and China.

The president of state-run Russian bank VTB, Andrei Kostin, said in Delhi on Friday that the two countries aimed to triple the two-way flow of goods and services to $30 billion.

“We have a strategic partnership and a very harmonious dialogue at the political level,” Kostin told reporters.

“But we have to complete this with the strengthening of economic ties.”

Published in Dawn, October 6th, 2018