India and Russia sign major defense and energy deals

Russian President Vladimir Putin (L) and Indian Prime Minister Narendra Modi walk during their meeting at Taj Exotica hotel in Goa, India, October 15, 2016. (Photo by AFP)

India and Russia have inked deals in defense and energy sectors, ushering in a new era of cooperation that could reshape the global alliances and affect the status quo in Afghanistan and in the Middle East.

Indian Prime Minister Narendra Modi and Russian President Vladimir Putin watched the signing of the deals on Saturday in the western Indian seaside state of Goa.

The biggest of all accords was reached between Russian state oil major Rosneft and India’s Essar Oil and other entities. Under the $12.9-billion agreement, Rosneft would pay for controlling stake in Essar Oil as well as in India’s port facilities that it owns. The deal, which sources say is Russia's largest outbound ever, would see a group led by Rosneft acquire 98 percent of Essar Oil, and with it a 400,000 barrel-per-day refinery and port at Vadinar for $12.9 billion.

Another major agreement came in the field of nuclear cooperation, whereby Russia began the construction work of the third and fourth reactors in the Russian-built Kudankulam plant in Tamil Nadu in southern India. Putin said Russia would be ready to build a dozen nuclear reactors in India over the next 20 years to help the country meet its burgeoning energy demands.

Other defense pacts were also signed between the two countries. Moscow promised to provide New Delhi with at least 200 Kamov 226t helicopters through a joint venture agreement. The delivery of S-400 surface-to-air missile system and plans to build and supply stealth frigates for the Indian navy were also included in the defense deals.

The signing of the deals shows how India and Russia have come to revive their Soviet-era close ties. They also signal India’s distancing from the United States and its willingness to engage further with Russia, which has been increasingly at odds with the West over the situation in Afghanistan and also in certain countries of the Middle East.

Both Putin and Modi reiterated that the deals could reflect the ever-nearing positions of India and Russia on major international issues.

“We are conducting a comprehensive dialog on a wide scale of international issues, in which Indian and Russian approaches are close to each other or coincide,” said Putin.

Modi also described the relations between India and Russia as “truly unique and privileged,” and praised Putin's support for the fight against terrorism.

“Russia's clear stand on the need to combat terrorism mirrors our own,” Modi said.