Putin likely to visit India in December

May hold talks on defence cooperation, energy security and trading in national currencies

Russian President Vladimir Putin is likely to visit India on December 10-12 to hold talks on defence cooperation, energy security and trading in national currencies. This comes at a time when Russia is seeking to strengthen bilateral ties in the face of sanctions by the West.

Putin had last visited India in December 2012, as part of the India-Russia annual meet held every alternate year. Owing to its alleged role in the situation in Ukraine, as well as the Crimean referendum, Russia faces sanctions by Western powers. As a result, it is looking to strengthen ties with South Asia across all segments.

Russia, once India’s largest arms supplier, is now planning to increase trade with India in other sectors, too, though defence supplies continues to be a crucial part in the relationship. Currently, the US is the largest supplier of defence equipment to India.

Russia is hopeful India will cooperate in boosting bilateral trade, as both are partners in the BRICS (Brazil, Russia, India, China and South Africa) grouping.

Last week, at a meeting of the Prime Minister’s Office to firm up the agenda for Putin’s visit, it was decided India would raise the issue of settling a rupee-rouble debt agreement worth $70 million. It is likely during their meeting, both Putin and Indian Prime Minister Narendra Modi will direct their officials to settle the matter.

A final decision on the issue would be taken by the Department of Economic Affairs and the Ministry of Defence, officials told Business Standard.

India would push trade in national currencies, a long-standing demand of exporters in the pharmaceuticals and engineering sectors, officials said. India and the former USSR had used the rupee for bilateral trade. As India was low on foreign exchange at that time, it bought Russian defence equipment, as well as other products, in rupees through a ‘rupee account’. Russian importers bought Indian goods by using that account, where the money was parked.

Now, the two sides will also seek ways to increase purchase of artillery from Russia, which is increasingly warming up to China and Pakistan in terms of building robust military ties.

The Ministry of Finance is believed to be considering a proposal of making defence purchases in rupees.

It is expected Russia will also push for recovering the money it had invested in a joint venture with India to produce titanium here. The plan was stuck during commercial negotiations. India plans to propose an out-of-court settlement and ask the Indian partner, Indian Rare Earth Ltd, to refund the Rs 50 crore it has already been paid.India might also announce investments in Russia’s hydrocarbon sector.

During Putin’s visit, two countries might also sign a pending ‘mutual recognition agreement’, under which both sides will recognise each other’s educational degrees for better job prospects.

Modi had met Putin at the G20 meeting held earlier this month in Brisbane, Australia.