Modi visits Putin: India's balancing act between Russia and China

Narendra Modi, Prime Minister of India, is currently visiting Russia to strengthen bilateral relations with Moscow and address concerns about Russia's rapprochement with China. Modi described the two-day visit, which began on Monday, as a "wonderful opportunity to deepen relations." Kremlin spokesperson Dmitry Peskov stated that Western countries are "jealous and for good reason" that Modi chose Russia for his first bilateral visit after the Indian election, in which he won a third five-year term last month. This is Modi's first visit since the Russian invasion of Ukraine in 2022. Russia is trying to rally countries like India behind Putin's vision of a Moscow-led "global majority" to challenge U.S. dominance. Meanwhile, India has not taken a clear stance in order to protect its longstanding relationship with Russia, India’s largest arms supplier and a significant source of cheap oil since the conflict began. Since the Western sanctions aimed at isolating Russia, Moscow's relations with China have intensified. Beijing is providing Moscow with economic support, with bilateral trade reaching record levels. "India wants to give Russia maneuvering space," said Alexander Gabuev, director of the Carnegie Russia Eurasia Center in Berlin. "They probably cannot steer Russia away from China but want to give it as many options as possible not to rely solely on China." India is also in conflict with China over their disputed Himalayan border and sees Russia's neutrality as vital for national security. "China is the primary challenge," said Pankaj Saran, former Indian ambassador to Russia. "We cannot afford to turn a friend into an adversary." Trade between India and Russia has risen to more than $65 billion since the invasion, mainly through the purchase of cheap oil. In June, Russian crude oil imports accounted for 43 percent of India's oil imports, making India the second-largest buyer after China. This has led to a sharp trade imbalance. Indian Foreign Minister Vinay Mohan Kwatra stated that New Delhi wants to increase the export of agricultural and pharmaceutical products to Russia. Sanctions are making it difficult for Russia to repatriate oil revenues due to the low convertibility of the rupee. A U.S. crackdown has led banks to avoid Russian counterparts, restricting access to certain currencies and forcing traders to settle transactions in rubles or even through barter. The EU and the U.S. have also stepped up efforts to target the fleet transporting Russia's oil, exposing buyers like India to potential future sanctions. "Global banks will be hesitant to handle transactions that could expose them to U.S. enforcement action," said Benjamin Hilgenstock of the Kyiv Economic Institute. An expanded campaign against oil tankers could pose a problem for Indian buyers. India and Russia are trying to promote domestic payment systems for trade, but this is challenging due to limited capacities and the difficulty of exchanging rubles and rupees for dollars and euros, he added. Some analysts argued that Modi's visit masks the fact that India is increasingly relying on economic and military cooperation with the West. Russia's share of Indian arms imports fell to a nearly 60-year low between 2019 and 2023 as India sought more advanced military technology from countries such as the U.S. and Israel. Kwatra mentioned that Modi would also raise concerns about dozens of his citizens who were inadvertently conscripted into the Russian army to fight in Ukraine. Moscow's growing dependency on Chinese supplies for its arms industry is another concern for India, Gabuev from the Carnegie Center noted, as there are worries that Moscow might not be able to maintain weapon systems or sell new weapons without Chinese components. "The essential part of the relationship is on very fragile ground," said Pramit Pal Chaudhuri, head of South Asia at the Eurasia Group. "I would argue that this is a managed decline.