Open Forum

New Delhi, 9 March 2022 

Russian Weaponry

INDIA’S HEAVY DEPENDENCE

By Dhurjati Mukherjee

India’s dependence for military supplies on Russia appears to have prompted the political leadership to restrain from criticizing Moscow for its war on Ukraine. The partisan attitude has in a way drawn condemnation in quarters, both in the country and globally. However, New Delhi is undeterred as Moscow has been seen as a reliable military partner for decades and, in fact, New Delhi’s second largest importer of Russian arms.

As is well known, the S-400 air missile defence system valued at $5.4 billion is the latest defence platform imported from Russia. This is in addition to several ‘Make in India’ initiatives such as the progressive domestic manufacture of AK-203 rifles and Kamov-226 T helicopters. In 2019, New Delhi sealed a $3 billion deal with Moscow for leasing nuclear-powered attack submarine for the Indian Navy for a period of a decade. Under it, Russia will have to deliver the Akula class submarine, known as Chakra III to the Indian Navy by 2025.

When Putin visited Delhi last year, Russia detailed the sale of $5.4 billion missile defence system in the country. Thus, for India, Russian defence equipment is critical to the country’s interest due to the fact that Moscow has been India’s strategic partner way back since 1970s.According to a report by Stockholm International Peace Research Institution, in 2016-2020, Russia was the biggest source for India’s defence needs, amounting to about 49.4 per cent of all arms imports. Importantly, Russian technology is said to suit Indian interest as it’s not just contemporary but is seen as reliable, need low costs for operation and the acquisition process is faster.

Though there are other defence deals still to be finalised with Russia, India does realise that Moscow is close to its adversaries, China and Pakistan. It is supplying military equipment to the latter. Also Russia has become a military supplier to Tatmadaw, the military junta in India’s eastern neighbour, Myanmar. Delhi cannot be thrilled with the Russian engagement of Tatmadaw as its own restive eastern states that border Myanmar – including Arunachal Pradesh, Nagaland, Manipur and Mizoram—tend to be sympathetic towards the Burmese people and could make India’s headaches worse in these regions.  

Additionally, India will need to keep in mind that the sanctions imposed on Russian defence industry may lead to technologies and critical components not being freely imported and that payment transactions in dollars may be affected given that two of the biggest banks of Russia are blocked.

At the same time, while Russia may be a reliable defence partner for the country, it has to keep other interests in mind. With Russia having China as a close ally, it has been playing a balancing game. Experts have opined that too much dependence on Russia is not good for us, being around 70 percent of defence inventory, and there is need for firming up such defence ties with other countries like Israel or France.

Despite slowing growth in recent years, more so after the two-year pandemic, the potential of India’s economy has been attracting international partners, specially from the Western world. But India’s stand on the war against Ukraine will obviously displease many countries. It may be mentioned that for India, the European Union is as a bloc, the third largest trade partner, and one with which it is aiming to strike a free trade agreement. However, European disappointment with India’s stand to the current conflict could dampen enthusiasm within the EU for whom the issue is much closer to home.

Though the war may not have any direct impact on India, indirectly the country may face economic problems. The surge in crude prices will require India to make significant adjustments to its economic policy and budget allocations while growing global inflation could reduce the flows of foreign portfolio investment. Already the stock market prices are falling in the country due to heavy selling by foreign institutional investors.   

Meanwhile, with Brent crude being around $ 120 levels, there are projections that it may reach around $140, if the war continues. Another concern for India is the fact that Ukraine is a major supplier of crude sunflower and disruptions are anticipated. In fact, there has already been a rise in edible oil prices due to the war fever. Palm oil prices, which are already high, have crossed Rs 160 a kg.    

How long the war would continue remains to be seen. But the rise in oil prices may affect the Indian economy. The GDP growth is expected to be lower at around 8.8-8.9 percent this fiscal. But the economy may not expand in the 8 percent range in 2022-23 due to the global situation, thereby having an adverse effect on incomes and consumption as well as revenues. Also job creation would be affected as investments would be far lower. In fact, the buoyancy of the economy may not be there.

Added to all this, is the resultant delay in the privatisation agenda of the government. Apart from LIC, the contemplated sales of state-run companies such as BPCL, Shipping Corporation and BEML may face further delays and defer the raising of much-needed revenues to fund infrastructure investment. As has been pointed out by economists and planners again and again, revenue generation is imperative at this juncture, if the economy has to surge ahead.

At present, the economic scenario has not yet been encouraging. Unemployment, price rise and social disharmony are affecting the country and this has been pointed out by Opposition leaders. These are causing anger and unrest among the youth, which, in itself, is becoming a grave problem. The latest report by the CMIE suggest the unemployment rate is 8.1 percent with 53 million people without jobs though unofficial estimates are much more. The unemployment rate peaked to 11.84 percent in May 2021 while it hovered around 4 percent in 2013-14 when Manmohan Singh relinquished office.  

Apart from the economic consequences, another major problem is that more than 15,000 Indian students in different years of their under-graduate medical education are among those who have fled Ukraine since Russia invaded the country. The Indian Medical Association (IMA) has righty pleaded with the Centre to view them as ‘hopeless’ and ‘heavily victimised’ students for no fault of theirs. Whether the government would accommodate them in around 550 medical colleges that each year enrol over 84,000 MBBS students remains to be seen.

Despite internal pressures, India needs to weigh options and take a wholistic view. The unprovoked aggression of Russia goes against the basic values of peace and human rights that India has clamoured for long. If one were to take lessons from Mahatma Gandhi, there can be no justification for war and violence. A balancing act is needed, difficult as it may sound.---INFA

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