Unveiling the Russian edition of India’s ‘Look East, Act East’ policy, Prime Minister Narendra Modi pledged on Thursday to extend a $1 billion Line of Credit to Russia’s Far East region (RFE)

• Finance Indian business projects in the region, will be the “take-off point for Act Far East”, and will further strengthen bilateral ties.

What is the EEF?

• According to its website, the EEF was established by a decree of the President of the Russian Federation, Vladimir Putin, in 2015, with the aim of supporting the economic development of Russia’s Far East, and to expand international cooperation in the Asia-Pacific region.
• The ongoing EEF Summit at the Far Eastern Federal University is the fifth in its history.
• Among the participants in the Summit are India, Malaysia, Japan, Australia, and South Korea.
• According to the EEF website, the 2018 Summit was attended by more than 6,000 participants from over 60 countries, and over 220 agreements worth over RUB 3.1 trillion were signed. (Each Russian ruble is almost exactly worth 1 Indian rupee.)
• The Summits have roundtable conferences, panel sessions, business breakfasts, besides business dialogues and bilateral talks and agreements.
• Mr. Modi’s visit saw several initiatives being launched towards increasing the value of economic ties between the two countries, which, at approximately $10 billion in terms of bilateral trade, lags far behind their strategic partnership and defence relationship

Bilateral trades-

• India’s economic ties with Russia have been struggling with bilateral trade hovering around $10 billion mark. Energy is one area which has the potential to provide stimulus to their ties.
• On 20th India—Russia Annual Summit India,
• Russia agrees to step up trade to $30 bn by 2025.
• They also agreed to speed up preparations for signing of the India-Russia Intergovernmental Agreement on Promotion and Mutual Protection of Investments.
• It was also agreed to intensify work for eliminating trade barriers. Which would be facilitated by the proposed Trading Agreement between the Eurasian Economic Union (EAEU) and the Republic of India?

Defence-

• India has contracted defence deals worth about $14.5 billion from Russia.
• New Delhi’s decision to go ahead with the purchase of S-400 missile defence system, worth over $5 billion, despite the threat of US sanctions, underscores the importance India continues to attach to its defence engagement with Russia.

Energy sector-

• Chief among the 50 agreements signed this week were those on energy exploration and procurement, including a specific MoU on cooperation on LNG supplies to India, and a maritime route from Vladivostok to Chennai which will be used for energy trade as well.
• The two sides also agreed on a five-year ‘roadmap’ for cooperation on prospecting for hydrocarbons and LNG in the Far East and the Arctic, building on a history of Indian investment in oilfields in the region.
• The emphasis on energy from this region is as much a bid to benefit from explorations and trade routes in the Arctic that are becoming accessible due to global warming, as it is reflective of India’s desire to diversify its energy sources away from an unstable West Asia
• The investment in the Far East, which is often neglected given that Russia is seen as a European power in the post-Soviet era, also underlines India’s desire to draw Russia into its strategic forays in the Indo-Pacific.
• Russia and India are also becoming more ambitious by pursuing projects in third countries such as the Rooppur nuclear power project of Bangladesh.
• The push to ‘Act Far East’ allows India to demonstrate its commitment to an area of concern for Moscow, thus reassuring its traditional partner that in an increasingly polarised world, India is confident of working with multiple alignments, even if they are at cross purposes with each other.

Way forward-

The challenge in front of India and Russia is that they need to transform a 20th century partnership and make it fit for the 21st century. Global trends are evolving rapidly and major powers are re-defining their ties with each other to match their contemporary requirements.