INDIA, RUSSIA TO BENEFIT IN A BIG WAY FROM FREE TRADE AGREEMENT

By Sankar Ray

If all goes well, India and Russia will shortly ink the Free Trade Agreement (FTA) between India & the Customs Union of Belarus, Kazakhstan & Russian Federation. The coming visit of Russian President Vladimir Putin to India next month is supposed to impart a new dimension to the bilateral ties between India and Russian Federation and speedy finalization of the FTA between the two countries, will be one of the major tasks in the summit. The bilateral trade between the two countries crossed to $12 billion in early months of 2013 and by 2015, it is expected to touch $20 billion.

Given the historic – somewhat nostalgic too – experience of friendship between the two countries, the signing of FTA is a normal culmination of five decades of economic cooperation. This began during the premiership of Nikita Khruschev who, as the general secretary of the Communist Party of Soviet Union took a decisive role in the implementation of peaceful co-existence of two systems – the socialist countries led by the erstwhile Soviet Union and capitalist world under the leadership of the USA. The political foundation for Soviet-Indian economic collaboration  was laid by Joseph Stalin in 1952 when the Soviet supremo reacted positively to the Indian Prime Minister Jawaharlal Nehru’s appeal to Stalin and the US Secretary of State Dean Acheson for taking initiatives in ending the Korean War .This expression of reliance towards Indian foreign policy was stated more assertively by Georgy Malenkov, general secretary of the Communist Party of Soviet Union at the 19th Congress of CPSU) in 1952 in the report of the party’s central committee. In presence of Stalin, he praised India’s policy of non-alignment.

All this is history. But it is basic to realize why Indians in general prefer Russia to the US in bilateral economic and technological ties as also collaborations. Indo-Russian camaraderie germinated during that last fifty years in sync with the solidification of non-aligned foreign policy. There is a covert yearning for the continuity of the bilateral relations with several unique features. There is a positive perspective for a free trade treaty which is not likely to be short-lived act or process. Indian business leaders are gaga about the beginning of free trade era in the Indo-Russian economic sphere. Little wonder. a few years back at the 18th International Economic Forum in St. Petersburg, Indian businessman Sun Group CEO Shiv Vikram Khemka stated with conviction that a collaborative future for Russia, China, and India might open up.

President Putin too has reasons to turn cooperation with India into an all-sided phenomenon, from the Russian side. Two years ago at the Fourth East Asia Conference on Slavic and Eurasian Studies , organized in Kolkata by the Maulana Abul Kalam Azad Institute of Asian Studies , Kolkata in collaboration with the International Council for Central and East European Studies (ICCEES) ,Japanese Council for the Russian and East European Studies (JCREES), Chinese Association of Slavic Studies (CAEERCA) , Korean Association for Slavic Studies (KASS) , and Ministry of External Affairs, Government of India .Prof R G Gidadhubli, a world renowned scholar in Russian studies and formerly professor and ex-director, Center for Central Eurasian Studies, University of Mumbai, spoke of the Russian head of state’s compulsion for beefing up trade collaborations with India…  He said it is mutually advantageous to have a large economic unit open at a global level including the West. It projects the prospect “for providing a larger market and better economic space as an alternative to EU. “ In view of Putin’s broader agenda to forming the Eurasian integration program like that of the former Soviet Union, the establishment of Eurasian Economic Union (EEU) which may serve as an antidote to the increasing Chinese penetration in the East, North and Central Asia and Russia’s dependence on China.

Although the EEU is still in an embryonic state, even conceptually and it is no easy to implement it. Defining of the prerogative space of EEU, fixation of regional currency and sources of authority, uniform adherence of international laws, Dr Gidadhubli noted. Nonetheless, there is a panic among traditional capitalist powers in the West. This is reflected in the unnerved state of mind in world’s topmost fund manager controversy-loving George Soros. In an article in the New York Review of Books, captioned, Wake up Europe, he backs German Chancellor Angelo Merkel’s suggestion for sanctions against Russia on the alibi of Russia’s aggressive policy towards Ukraine. Soros is implicitly afraid of Russian entry into emerging countries like India. “It is high time for the members of the European Union to wake up and behave as countries indirectly at war. They are better off helping Ukraine to defend itself than having to fight for themselves. One way or another, the internal contradiction between being at war and remaining committed to fiscal austerity has to be eliminated. Where there is a will, there is a way”, he stated unequivocally.”

But Putin is for cordial relations with China in his crucial currency war to rid Russia of ‘dollar domination’ In fact. Russia looks forward to quitting “dollar dictatorship” of market oil prices and turn to using the country’s national currency and the Chinese Yuan, “We are leaving the dictatorship of the market where oil goods are based on the dollar and will increase the possibilities of using [other] national currencies: the Ruble and the Yuan,” Putin stated in an interview to the Russian state news agency TASS.

Moscow has extended an olive branch to New Delhi. How New Deli reciprocates is to be awaited. The milieu is distinctively positive to imparting a special momentum to the shaping of FTA between India and Russia. (IPA Service)