Russian Foreign Minister Lavrov meets Indian Foreign Minister Jaishankar In New Delhi: Report and Analysis

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Op/Ed by Chris Devonshire-Ellis

  • Discussions largely aimed at the Afghanistan Peace Process
  • Dismissive of Indian QUAD Alliance
  • Mutual Investment in Covid vaccine production
  • Talks included India-EAEU Free Trade Agreement

Russia’s Foreign Minister Sergei Lavrov has met with his Indian counterpart Subrahmanyam Jaishankar in New Delhi, at which several issues were discussed. Our reports and analysis follow:

Afghanistan Peace Process

There are numerous vested interests in this, not least India, China, Pakistan, Uzbekistan, Iran and the United States. A planned Uzbek-Afghan-Pakistan railway connecting Central Asia to South Asia and global export markets is jointly seen as key to regional development, trade, and security. Getting Afghanistan’s Taliban onside is a major challenge.

The US administration is also pushing Afghan President Ashraf Ghani and the Taliban to reach a peace deal so it can withdraw the remaining 2,500 American troops from Afghanistan. Despite the Taliban being banned in Russia and classified as a terrorist organization, Lavrov stated that “The Taliban movement is part of Afghan society and decisions on the settlement in Afghanistan should foresee the participation of all political, ethnic, and religious groups in Afghanistan, otherwise it won’t be durable. This should reflect a balance of interests of all, including their representation in governing structures.”

New Delhi however has reservations about dealing with the Taliban. Much depends on the United States here and what deals it brokers. It has maintained troops in Afghanistan since 1999, and despite its publicly stated desire to withdraw the US military may not wish to leave the region at the operational behest of Russia. Washington may also deem it not in its interests to have an interconnected or peaceful Central Asian region as it may prefer to keep both China and Russia occupied and tying up resources.

Russia – China Military Alliance and QUAD

Lavrov has categorically dismissed speculative media reports suggesting a possible military alliance between Moscow and Beijing soon. Lavrov said that India and Russia believe these kinds of military alliances are counterproductive. “Our relations with Beijing are the highest in our history but these relations do not pursue the goal of establishing a military alliance” Lavrov said.

Concerning the Quad alliance, of which India is a member along with Australia, Japan, and the United States, Lavrov said that “Our Indian friends have the same position as us. We believe that this [military alliance] is counterproductive and we are interested in inclusive cooperation that is for something and not against something.”

Russia – India Military Cooperation & US Sanctions

Military cooperation with India will continue, however. Lavrov stated that “We reiterated our commitment to military-technical cooperation. We have an intergovernmental commission on military-technical cooperation. It has its plans, and this includes discussion of additional manufacturing of Russian military equipment on Indian Territory.” This includes the manufacture of Russian S-400 missiles for the Indian military, which has prompted the United States to threaten sanctions against the country should this go ahead – the US wishes to sell India arms as an alternative competitor. The S-400 is a sophisticated anti-aircraft weapons system, designed to destroy aircraft, cruise, and ballistic missiles, and can also be used against ground targets. Jaishankar said the S-400s would be discussed at a meeting of Indian defense ministers later in the year.

Covid-19

Lavrov said yesterday that the production of an Indian coronavirus vaccine in Russia was possible.

“I don’t rule out that further cooperation that will embrace the production of an Indian vaccine in Russia. Specialists will have to discuss this, proceeding from the perspective of maximum efficiency of cooperation.” Lavrov also said that the Russian Direct Investment Fund was in the process of signing contracts with several Indian contractors to manufacture the Russian-made coronavirus vaccine Sputnik V in India, with production numbers estimated at 700-750 million doses.

The Greater Eurasian Partnership

According to Lavrov, Moscow is interested in boosting cooperation with Pakistan, India, and other partners from the Eurasian continent. “We have common interests, above all, ensuring security and improving the quality of life of the peoples of our countries,” he said. “A unifying agenda is being promoted by the initiative of Russian President Vladimir Putin to develop Greater Eurasian Partnership. Participation in it is open to all states of the continent, including the members of the EAEU, SCO, ASEAN, as well as, in case there is such interest, the European Union.”

He stated that a systematic implementation of this initiative will strengthen positive connectivity, improve the competitiveness of all participants and will also be a solid foundation in building a common continental space of peace and stability. Russia and China have already discussed the Greater Eurasia concept and have been talking about joining the existing Eurasian Economic Union with the Belt & Road Initiative. China has signed a Free Trade Agreement with the Eurasian Economic Union; however, tariff reduction negotiations are still on-going.

India – EAEU Free Trade Agreement

The two Ministers also discussed ways to deepen bilateral partnership in sectors such as investment, energy, and moving ahead on talks for a Free Trade Agreement between India and the Eurasian Economic Union (EAEU). Jaishankar said “We positively assessed our economic cooperation, noting the new opportunities in Russian Far East. We spoke of connectivity, including the International North-South Transport Corridor and the Chennai-Vladivostok Eastern Maritime Corridor. Our rapidly expanding energy cooperation that now includes long term commitments was also on the agenda.”

Lavrov pointed out that there had been a reduction in Russia-India bilateral trade due to the Covid-19 pandemic and that both sides needed to discuss ways to boost both trade and investments. Both countries are also keen on moving forward on the negotiations for an FTA between India and the EAEU in a way that is mutually beneficially. The EAEU includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. It has a combined population of 167 million and a GDP (PPP) of about US$5 trillion.

Bala Venkatesh Varma, the Indian Ambassador to Russia, has previously said that the creation of a free trade zone between India and EAEU would boost trade turnover to US$15 billion – a 25% immediate increase. India and Russia have previously discussed ways of doubling trade to US$30 billion by 2025.

An India-EAEU FTA is increasingly possible as India recently pulled out of the RCEP FTA with China, Australia, New Zealand, Japan, South Korea, and the ASEAN nations – mainly due to domestic market protectionist issues with Indian corporates concerned about Chinese competition in the Indian market. An EAEU deal offers new access to foreign markets but is far less likely to see corporate Indian companies lose domestic market share.

Russia and India are also to be linked via the International North-South Transport Corridor (INSTC), which connects Mumbai by ship to the Iranian Port of Chabahar and then by rail onto to Anzali Port in the Caspian Sea and by ship to markets in Azerbaijan, Kazakhstan, Russia, and Turkmenistan. The INSTC also has a spur north and west to Afghanistan.

Additional Russia India 2021 Interaction & ‘Accidental’ John Kerry Meeting

There are several other Russia-India dialogues taking place this year, including interaction within the United Nations, where both parties have pushed for Covid patent withdrawal to allow less expensive distribution, and where both are at odds with the United States. Daily Covid infection rates in India have been rising at a record amount of over 100,000 per day this past week.

The two countries will also be holding dialogue at the Shanghai Cooperation Organisation, as well as BRICS, which India is chairing this year. The annual Russia-India summit will also be held this year with both President Putin and Indian Prime Minister attending.

Additional spice was added to Lavrov’s visit as he apparently met US Envoy John Kerry on an unscheduled meeting in the hotel both were staying at in Delhi. However, it is hard to believe this was entirely an accident. US President Biden has invited Russian President Putin, together with China’s Xi Jinping and 40 other world leaders to Washington to discuss climate change although behind the scenes talks will also be going on. It is likely that Kerry passed on a personal message from Biden to Putin via Lavrov concerning this. Those talks are scheduled to take place over two days from April 22.

The Russian Foreign Minister is now holding talks in Pakistan as part of his South Asia trip, we shall report on that shortly.

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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at russia@dezshira.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.

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