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October 17, 2013

2nd nuclear submarine lease likely to be 'X factor' in Indo-Russian summit

At least half a dozen bilateral agreements in spheres like energy, biotechnology, metrology and technical regulations, and a big ticket deal on an undisclosed subject, are expected to be signed at the 14th Indo-Russian annual summit in Moscow on October 21, key officials involved in the negotiations (which are still going on) said. However the X factor that is likely to dominate the summit and the strategic outcome, whether announced or unannounced, is Russia agreeing to lease second nuclear submarine to India.
India has been looking to take a second nuclear submarine on lease from Russia and talks are believed to have progressed well. The two sides are keeping budget-level secrecy on this subject. The issue is likely to dominate discussions between Singh and Putin during a restricted meeting where the two principals meet with select aides.
Normally, sensitive subjects like nuclear submarines are not announced formally. It is yet to be seen whether the subject will find a mention in the Joint Statement to be released after the visit but a broad framework on defence and scientific cooperation is likely to be unveiled after the talks.
The only nuclear submarine with the Indian Navy currently, INS Chakra, has also been taken on lease from Russia. The boat joined active service in the Indian Navy in April 2012. The ten-year lease has cost India almost a billion dollars.
The Indian Navy personnel are quite satisfied with the leased nuclear submarine as the 80-personnel capacity boat can remain under water as long as human endurance allows. Another operational advantage of the boat is that its noise level is virtually zero which enhances its stealth qualities.
The second nuclear submarine lease is likely to cost considerably more. Indian Foreign Secretary Sujatha Singh is scheduled to hold a press conference on Manmohan Singh’s visit to Russia and China during which she would inevitably be asked questions about the second nuclear submarine lease plans.
Defence ties
Government-to-government route, comparable to the American Foreign Military Supplies (FMS) programme, is being actively considered to repair the strains in Indo-Russian defence relations from the Russian viewpoint.
Russia has been complaining to India for losing out on several defence deals over the past two years largely because of India’s radically changed Defence Procurement Policy (DPP) which puts greater emphasis on indigenization.
But despite some recent setbacks, Russia still tops the list of foreign defence suppliers, having secured orders worth $16 billion in orders during the three-year period of April 1, 2010 to March 31, 2013. This amounts to almost 40 percent of the Indian defence imports in this period which totaled $38 billion. Currently Russian arms factories are working on cumulative Indian orders worth $20 billion, enough to keep them busy for years.
Energy, trade, investment issues
The October 21 summit will be dominated by energy, trade and investment issues.
On the energy front, Kudankulam Nuclear Power Plant’s 3rd and 4th units and Indian concerns about ONGC’s loss-making investment in Imperial Energy which is engaged in mineral extraction in western Siberia would be the main talking points at the summit, officials said.
It is a work in progress on the tricky issue of KNPP 3 and 4 and no agreements are likely to be signed during the summit. The matter is currently at the technical talk’s stage.
The two sides’ prime focus will be on giving a much-needed impetus to the bilateral trade, currently at a below-par $11 billion with a target of taking it to $20 billion by 2015. The leaders will be tightening bolts and screws of a mechanism of deepening cooperation in multiple and diverse sectors such as information technology, fertilizers, infrastructure and aviation.
The two leaders are likely to discuss the idea of Russians producing passenger aircraft SSJ-100 and Irkut in India for India to keep the cost of production considerably lower. Again, an agreement is unlikely to be signed during the summit in this context because the matter is being discussed by technical experts from the two sides.
Fertilizer sector is another highly important area that promises rich returns as Russia is a leading producer and India a major importer of the commodity. The two sides are likely to agree to intensify their cooperation in this area which can give billions of dollars to Russia in the long run

 indrus

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