PM Modi's Moscow visit: Five areas to watch closely

File image of Prime Minister Narendra Modi and Russian President Vladimir Putin. | Photo credit: PTI

Boarding his special plane from Delhi to Moscow's Vnukovo-II airport, Prime Minister Narendra Modi said he would discuss the full range of bilateral issues with his friend Russian President Vladimir Putin during his two-day, 26-hour visit to Russia for the 22nd annual summit, including in the areas of energy, security, trade, investment, health, education, culture, tourism and people-to-people exchanges, also indicating that the war in Ukraine was on the agenda of discussions.

“I look forward to reviewing with my friend President Vladimir Putin all aspects of bilateral cooperation and exchanging views on various regional and global issues. We are keen to play a supportive role for a peaceful and stable region,” Modi said.

What is the schedule for Mr Modi's visit on July 8-9?

July 8

• Arrival and welcome ceremony at Moscow airport

• Private dinner with Mr Putin at his dacha (estate) in the suburb of Novo-Ogaryovo

July 9th

• Indian community event, Russian students' cultural performances

• Pay your respects at the Tomb of the Unknown Soldier, Red Square

• Visit to ATOM, exhibition of Rosatom nuclear developments and technologies with President Putin

• Official summit in Kremlin: review of bilateral issues, war in Ukraine and global issues

• Discussions at delegation level and announcement of results/agreements

• Indian Prime Minister leaves for Vienna for bilateral talks, first visit in 41 years

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What is the program? 5 points:

Geopolitical context of the visit, summit schedule

Prime Minister Modi is on his first visit to Russia since the outbreak of the war in Ukraine in February 2022, his first bilateral visit abroad since he resumed office, and the first time the leaders have met for an annual summit since 2021. While MEA officials have said the visit should be seen in a bilateral context, it is a significant demonstration of Delhi’s support for ties with Moscow amid the conflict, although Mr Modi also met Ukrainian President Zelenskyy on the sidelines of the G-7 outreach summit last month. Moreover, Russia’s growing reliance on China is something New Delhi will seek clarity on, given the strain in India-China relations since 2020, despite some Russian attempts at reconciliation between them at an RIC meeting shortly after the Galwan clash. The formal Modi-Putin talks will begin in Moscow just as US President Joe Biden hosts a special NATO summit with members of the Western Indo-Pacific sanctions coalition and Mr Zelenskyy in Washington, which will seek to show that Russia is isolated. All eyes will be on a possible joint vision statement to chart the course for future India-Russia relations.

The War in Ukraine and the Future of the Peace Process

The Indian leaders are meeting for the first time since 2022, when they met on the sidelines of the SCO in Uzbekistan and Prime Minister Modi said this was not the era of war. President Putin, however, has not changed the course of Russia’s war in Ukraine, and all eyes will be on the public message Mr Modi sends on the issue during his visit. India has several bilateral issues arising from the war, including managing food and fertiliser supplies and dealing with Western sanctions. While no major new military deals are on the cards, the two sides are expected to streamline defence agreements that have already been finalised and expedite delayed deliveries, including for S-400 systems and spare parts. A military-logistics agreement called RELOS is also set to be signed, sources said, which will align military and naval cooperation across the region. New Delhi has made it clear that it will raise the issue of Indian military recruits on the front lines between Russia and Ukraine and Prime Minister Modi is expected to seek a waiver of the lengthy demobilisation processes to bring home those who wish to return to India. At least two Indians have been killed so far, and around 50 recruits are believed to be in the army, while fewer than 10 have been allowed to return. The Russian military says its laws allow foreign recruits and that it has also received volunteers from Sri Lanka, Nepal, China, African countries and others – however, a demobilisation has to go through the Military Commission.

Trade and Payment Mechanism

India-Russia trade figures have increased severalfold since the war, driven by India’s increased oil imports at discounted rates from Russian companies following sanctions. However, this has led to a major trade deficit, with about $60 billion of Indian imports compared to just $4 billion of Indian exports in 2023-24. One challenge will be finding ways to encourage more Russian companies to buy Indian goods, the other will be finding a way to make payments that will not attract sanctions on the Indian banks that facilitate them. Russian Foreign Minister Lavrov said recently that India and Russia are moving towards about 60% of bilateral trade payments in national currencies, with Russian bank Sberbank reporting an improvement in payments in recent months as Indian companies open accounts. A bilateral agreement on payment facilitation is expected, although the BRICS group is expected to discuss alternative payment systems in the currencies of the enlarged BRICS countries next October.

Energy

In addition to seeking more predictable preferential tariffs on Russian Urals crude, which Indian refineries, including the Russian Rosneft-controlled Vadinar in Gujarat, have been refining in increasing quantities over the past two years, Prime Minister Modi is expected to discuss long-term contracts for oil and LNG in his talks with President Putin. India has increased its imports of Russian oil 20-fold in just two years, and Indian oil companies may see more investment opportunities in Russian oil and gas fields, particularly in the eastern regions and Siberia.

Connectivity

India and Russia have stepped up efforts on the International North-South Transport Corridor (INSTC) through Iran's Bandar Abbas port, as well as the Chennai-Vladivostok Eastern Sea Corridor and the Northern Sea Route to provide India with access to Russia and the Arctic. The two leaders are expected to announce an agreement on connectivity after their talks. However, last-minute discussions on handling insurance and freight issues in light of Western sanctions, as well as India's concerns over the treatment of some Chinese ports along the route, are still ongoing.