Global Economy

Far-East Russia big focus of Modi-Putin summit

This year the December 6 annual summit led by Indian Prime Minister Narendra Modi and Russian President Vladimir Putin, held after a year’s gap due to the pandemic, will focus on cooperation and joint projects in the Russian Far East in a big way.

India has ambitious plans for resource-rich Russian Far East and Modi had announced $1 bn Line of Credit (LoC) for various projects in the region while announcing India’s Act Far East Policy from Vladivostok in 2019. Monday’s summit will give further impetus to India’s involvement in the region, ET has learnt. All eyes are on revival of Vladivostok-Chennai maritime connect.

Ahead of his visit Putin said on Wednesday, “Next week, I will visit India. During talks with Prime Minister Modi, we will outline new large-scale initiatives for the further development of the especially privileged Russian-Indian relationship, the Russian-Indian strategic partnership. This partnership brings real mutual benefit to both states. Bilateral trade shows good dynamics; ties are actively developing in the energy sector, innovation, space, and the production of coronavirus vaccines and medicines. There is extensive cooperation in the defence sector, including through the creation of joint ventures.”

“India is one of the authoritative centres of the multipolar world with a foreign policy philosophy and priorities that are closely aligned with our own. I am convinced that, relying on strong traditions of friendship and mutual understanding, we will continue working together to expand the full range of Russian-Indian ties,” Putin pointed out.

The Act Far East policy contributes to India’s Indo-Pacific strategy and Russian Far East is a key element of emerging Indo-Russian partnership in the Indo-Pacific and ASEAN region. Energy is one of the key pillars of Delhi’s Far Act East Policy with the government planning to increase investments in Russian oil fields in the region.

Russia holds the world’s largest known reserves of natural gas and most of these reserves are present in the Russian Far East. In September this year, while addressing the Eastern Economic Forum (EEF) virtually, Modi expressed optimism that India and Russia can together bring stability in global energy market.

In his message at the EEF 2021, Modi highlighted the historical and civilisational significance of ‘Sangam.’ He described Vladivostok a true ‘Sangam’ of Eurasia and the Pacific and emphasised the geo-strategic location of the region in terms of connectivity.

Indian oil and gas companies are keen to further expand their investments in Russian oil & gas fields including in the Far East Russia and Arctic region. India’s cumulative investment in oil and gas projects in Russia exceeds $ 15 billion. It is the single largest destination of Indian overseas investment in the oil and gas sector.

Russian oil giant Rosneft and its partner in 2017 bought Essar Oil, renamed Nayara Energy, for $ 12.9 billion. In Vladivostok, the two countries during the EEF, in the presence of Oil Minister Hardeep Puri, also launched their commercial shipbuilding cooperation and explored new opportunities in agro industry, ceramics, strategic and rare earth minerals and diamonds.

Last year IOC signed a deal with Rosneft for the annual purchase of 2 million tonne of crude oil. This was the first-ever annual oil purchase deal between the two countries. India is also importing liquefied natural gas (LNG) from Russia and is looking for opportunities for involvement of Indian companies in infrastructure development projects in the Siberian and Arctic regions.

India is also looking to invest in Rosneft’s Vostok project. Vostok Oil is one of the most prospective oil production projects in the world. It includes 52 license areas with a resource base of more than 6 billion tons of oil.

Oil and gas reserves in the Russian Arctic may be sufficient for the country if necessary, for decades and even centuries, according to Russian estimates.

The Indian government is also keen for coordination with Japan and South Korea for developing infrastructure and bringing investments in Russian Far East. A trilateral between India-Japan-Russia is exploring joint projects.

Russia’s vision from Lisbon to Jakarta complement’s India’s outreach in SE Asia and Far East Asia and contribute to India’s Act Far East Policy that involves New Delhi’s role and investment in the resource rich Russian Far East.

Simultaneously, the Arctic is opening new opportunities for hydrocarbons and other potential resources that lie unexplored beneath its ice. Russia maintains a dominant position in the Arctic and considers the region its strategic backyard.

The Arctic, in recent times, has presented a new front of opportunities and cooperation between India and Russia. The Barents area in the Arctic region has some of the best-known mineral deposits and some of the world’s best deep harbours from which to transport the products. The region is rich in iron-ore. Russia’s oil and gas development projects in the Arctic are being given high priority.

The Northern Sea Route via Arctic offers the shortest route between East Asian and Western European ports. It is estimated that the maritime distance from Shanghai to Rotterdam via NSR will be 30 per cent shorter vis-à-vis the Suez Canal route, cutting time by 10–12 days. Likewise, the distance from Yokohama to Rotterdam will be 40 per cent shorter.


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