RUSSIAN President Vladimir Putin starts a two-day visit to India from tomorrow, pitching for more sales of Russian oil, missile systems and fighter jets in a bid to restore energy and defence ties hit by US pressure on the South Asian nation.
Russia has supplied arms to India for decades, with New Delhi emerging as its top buyer of seaborne oil despite Western sanctions after Moscow launched its invasion of Ukraine in February 2022.
But India’s crude imports are set to hit a three-year low this month, after the tightening of sanctions on Russia that coincide with its growing purchases of US oil and gas.
On his first visit in four years to the Indian capital for a summit with Prime Minister Narendra Modi, Putin will be accompanied by his defence minister, Andrei Belousov, and a wide-ranging delegation from business and industry.
“Putin’s visit offers an opportunity for Delhi to reassert the strength of its special relationship with Moscow, despite recent developments, and make headway in new arms deals,” said Michael Kugelman of the Atlantic Council think tank in Washington.
New initiatives were likely to be announced, he added, even if they mostly related to low-hanging fruit in ties.
But Indian officials worry that any fresh energy and defence deals with Russia could trigger a reaction from US President Donald Trump, who doubled tariffs to 50 per cent in August on Indian goods, as punishment for New Delhi’s purchases of Russian crude.
Ahead of Putin’s visit, officials of both sides held talks in areas from defence to shipping and agriculture. In August, they agreed to launch talks for a free trade deal between India and the Russian-led Eurasian Economic Union.
They are also in talks to expand their partnership in civilian nuclear energy, Indian analysts have said.
Putin’s delegation includes the chief executives of dominant Russian lender Sberbank and state arms exporter Rosoboronexport, as well as the heads of sanctioned oil firms Rosneft and GazpromNeft, an industry source with direct knowledge of the matter said.
Ahead of the visit, Sberbank said it was interested in investing in Indian infrastructure projects making use of rupees, in which a big chunk of two-way trade is settled.
India CEO Ivan Nosov said Sberbank was also extending rupee loans to Russian exporters and local units to boost Indian sales of Russian products.
In a later statement the bank said it launched a rupee-denominated letter of credit with deferred payment for purchases in India, which will help Russian companies to increase imports from the South Asian country.
“The bank can finance up to 100pc of the cost of a shipment from India, with the interest rate for using the deferred payment being several points lower than the rate for a ruble loan,” Anatoly Popov, deputy chairman of Sberbank’s executive board, said.
Moscow is likely to seek India’s help to get technical equipment for its oil assets, as sanctions have choked access to key suppliers, said the industry source and a separate Indian government source.
The sources spoke on condition of anonymity due to the sensitivity of the matter.
India is likely to pitch for the restoration of a stake of 20pc for state gas explorer ONGC Videsh Ltd in the Sakhalin-1 project in Russia’s far east, the government source added.
India hopes to sign a US trade deal by year end, as most of its refiners have stopped buying Russian oil, though widening discounts are now drawing in some state refiners.
Unlike crude, India does not plan to freeze defence ties with Moscow anytime soon as it requires support for the many Russian systems it operates, Defence Secretary Rajesh Kumar Singh said last week.
Russian Sukhoi-30 jets make up the majority of India’s 29 fighter squadrons and Moscow has also offered its most advanced fighter, the Su-57, which is likely to figure in this week’s talks, said two Indian officials familiar with the matter.
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