Kremlin to pitch fighters, nuclear deal in India

By Alexei Anishchuk

MOSCOW (BestGrowthStock) – President Dmitry Medvedev will try to convince India to buy Russian fighter planes and seal a nuclear deal when he travels there this week for talks aimed at boosting ties with the second-fastest growing economy the world.

Russia was one of India’s closest partners in Soviet days, but the Kremlin will have to convince New Delhi that Moscow can deliver on vast defense and nuclear orders in the face of competition from the United States, Europe and China.

Medvedev, who the Kremlin said will come with a large delegation of business leaders, is to hold talks with Prime Minister Manmohan Singh and President Prathibha Patil on Tuesday and visit Mumbai on Wednesday.

“Russian-Indian relations have moved to a completely new level which can be called a favored strategic partnership,” a Kremlin official told reporters on condition of anonymity.

But behind the rhetoric of expanding ties with its fellow BRIC economy — the term used to group emerging powers Brazil, Russia, India and China — bilateral trade is dwarfed by Russia’s booming economic ties with the European Union and China.

The Kremlin said trade with India will total $10 billion this year while official statistics show Russia’s trade with the European Union stood at $246 billion in the first 10 months of 2010, and trade with China was $47.5 billion in the same period.

India, watching neighboring China’s rapid strides in defense, wants to overhaul its mostly Russian-supplied air force and Moscow will lobby hard for India to select the Russian-made MiG-35 for an $11 billion contract for 126 fighter jets.


French, U.S. and other European firms are also competing for the contracts, and President Obama is believed to have pushed for American planes manufactured by Boeing and Lockheed Martin Corp during his trip earlier this year.

Geopolitically, India sees Russia as a counterweight to China and a potential ally in Afghanistan.

“Russia has a major presence in Asia and if we look at our dangerous neighborhood, including China, we need a counterbalance,” former foreign secretary Lalit Mansingh said.

But Medvedev may have a tough task convincing New Delhi to strike more arms deals following delays on the delivery of some Russian projects, including the Admiral Gorshkov heavy aircraft carrying cruiser.

Moscow-based defense analysts Cast say Russia has nearly tripled the price and delayed delivery of the cruiser by four years since signing the original contract in 2004.

“We still have problems about military supplies,” Mansingh said. “Schedules are not kept and prices are not stable. Russia needs to sort these out if it has to remain a big player in the Indian market.”

The Russian president will also not be able to deliver the same economic clout his BRIC rival and Chinese counterpart promised when he went to India earlier in the month.

Chinese Premier Wen Jiabao agreed on an ambitious 2015 trade target of $100 billion between the two rising Asian powers, which have overshadowed Russia economically.

Russia will see gross domestic product (GDP) growth of 4 percent in 2010 while India’s economy will grow by nearly 10 percent, according to IMF figures.

But Russia, the largest energy producer in the world, may be able to take advantage of Indian growth by boosting its market share in civilian nuclear energy projects.

India plans to add 63,000 megawatts of nuclear power by 2032 from a current nuclear capability of about 4,500 MW.

New Delhi is currently eyeing its nuclear pacts from competing French and U.S. companies, and Russia’s nuclear agency Rosatom is trying to boost its profile in the Indian market with the help of local partners.

(Reporting by Guy Faulconbridge and C.J. Kuncheria; writing by Guy Faulconbridge and Thomas Grove; editing by Noah Barkin)

Kremlin to pitch fighters, nuclear deal in India