<div>The Vladimir Putin - Narendra Modi summit in New Delhi has re-established Russia as India’s largest arms supplier. As part of the several deals that were signed, 400 Russian multi-role helicopters will be assembled in India every year, Russia’s state-owned Rosatom will build 12 nuclear reactors over 20 years in India, with the option of increasing it to 20 and Rosneft committed to a 10-year supply of crude with Essar Oil. “Even if India’s options have increased, Russia remains our most important defence partner,” Modi told mediapersons after the signing summit. </div><div> </div><div>But the deal that hogged the limelight pertained to diamond trading, as it was announced at the imposing Vigyan Bhavan before a 1,000-strong cheering audience that included gems and jewelry traders and representatives of diamond mining companies. As part of the deal, Russian mining giant Alrosa will supply diamond roughs to 12 Indian manufacturers including Rosy Blue, Asian Star and Demexion for the next three years. Alrosa produces 25 per cent of the world’s roughs. </div><div> </div><div>Modi also announced a major concession for the diamond industry — that of permitting special notified zones (SNZs) for auction of roughs and for viewing by buyers in India. These special zones, to be set up in Mumbai’s Bharat Diamond Bourse and perhaps in Surat too, will allow rough diamonds to be brought in and unsold ones to exit without being registered as ‘imports’ on the books. Modi also made a major pitch on behalf of the diamond jewelry exporters asking President Putin to waive or lower duty to increase sales in Russia. </div><div> </div><div>Putin’s India visit came on the heels of crashing prices for Russian oil, and Europe and the US closing their doors to Russian products in retaliation to Putin’s Ukraine policy. India’s bilateral trade with Russia stood at a paltry $10 billion in 2013, but with looming sanctions in the West, the Indian side is hoping to cash in and has made a list of 24 non-traditional goods and services that it will target to sell to Russian markets. “We are pitching for free trade between India and Russia. These are difficult times, with oil down, sanctions taking effect and the rouble becoming weak,” admitted Maxim Shkadov, the Russian president of the International Diamond Manufacturers Association. </div><div> </div><div>The US is not very happy at the turn of events and has expressed its displeasure over India doing business with Russia at a time like this. Reports of Crimean leader Sergey Aksyonov accompanying the Russian delegation has only queered the pitch further. However, Modi is clear that while leaning westwards, he wants to keep some options open; and use his Russian chips on the bargaining counter with Obama and Europe. </div><div> </div><div>(This story was published in BW | Businessworld Issue Dated 26-01-2015)</div>
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Gurbir Singh is an award-winning senior journalist with over 30 years experience. He has worked for BW Businessworld since 2008, and is currently its Executive Editor. His experience ranges from covering 'Operation Bluestar' in 1984 to pioneering coverage of the business of Media & Entertainment and Real Estate for The Economic Times.
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