PM’s visit to Moscow to boost Indo-Russia defence ties

Prime Minister Narendra Modi will attend the BRICS and SCO (Shanghai Cooperation Organisation) summit in Russia’s Ufa city on July 8-9.

The Dollar Business Bureau

Narendra Modi The Prime Minister, Narendra Modi leaves for his visit to Central Asia and Russia on July 06, 2015. Source: PIB, Government of India

  Prime Minister Narendra Modi’s forthcoming visit to Moscow will give an “extra push” to India’s defence ties with Russia and enhance strategic relationship between the two countries, an ASSOCHAM study has said. As part of his trip to Central Asia beginning Monday, Modi will attend the BRICS and SCO (Shanghai Cooperation Organisation) summit in Russia’s Ufa city on July 8-9. Experts believe that the Indian government’s decision to allow 49% foreign direct investment (FDI) in defence sector will give a further boost to the bilateral cooperation between the two traditional allies. “The recent hike in FDI limit to 49% is expected to bring more investments, particularly from Russia into the defence sector. Earlier FDI limit of 26% was the main hurdle holding back global OEMs (original equipment manufacturers) from investing in the Indian defence production”, the ASSOCHAM said. Before attending the summit, the prime minister will visit Uzbekistan and Kazakhstan. On his way back home, Modi will go to Turkmenistan, Kyrgyzstan and Tajikistan respectively. “For us, we regard this as a very important forum for consolidating positions among five significant economies in the world on issues of common interest. The most significant issues in this format are issues of governance as well as of coordination and cooperation on global economic and financial issues,” said Sujata Mehta, Secretary (Multilateral Economic Relations) while interacting with the media in Delhi on Saturday. At present, the bilateral trade between India and Russia is worth $7 billion. But, the paper said, the current trade has not only remained much below the potential, it has also remained highly skewed for a few items besides defence. At the same time, the military cooperation has evolved from a simple buyer-seller framework to the one which involved joint research and development, joint production and marketing of advanced defence technologies and systems. “The BrahMos missile system is an example of this type of cooperation. Joint development of the fifth generation of fighter aircraft and the multi transport aircraft , as well as the licensed production in India of SU-30 aircraft and T-90 tanks , are other examples of flagship cooperation programmes presently underway,” the paper said. The industry body has also suggested the India government to collaborate with Russia to set up a Special Economic Zone for defence capabilities and aerospace. “Russian companies and their Indian suppliers can set up manufacturing and research facilities for domestic use and export,” it said. Meanwhile, Finance Minister Arun Jaitley is also visiting Russia for four days to take part in the meetings of BRICS finance ministers and central bank governors. On July 7, the Finance Minister will attend the first meeting of the board of governors of the newly formed BRICS Bank.    

July 6, 2015 | 3:40 pm IST.

The Dollar Business Bureau - Jul 06, 2015 12:00 IST