India - Pact on Kudankulam to be highlight of Medvedev visit

Sandeep Dikshit


NEW DELHI: With the financial crises taking a toll on investment plans and many bilateral initiatives pending finalisation, Russian President Dmitry Medvedev is cutting short his visit to India by a day, said diplomatic sources.

Mr. Medvedev will spend only a day here on December 5 and not visit a southern Indian city as originally planned to evaluate India’s success in the field of information technology. The highlight of the visit will be the signing of an agreement to build more reactors at the Kudankulam plant in Tamil Nadu for which the head of Russia’s Federal Atomic Energy Agency (Rosatom) Sergey Kiriyenko is currently visiting the country.

On the other hand, India is likely to convey its unwillingness to part with an additional $2 billions demanded by Russia for the aircraft carrier Admiral Gorshkov (renamed INS Vikramaditya). With the Union Finance Ministry not wishing to set a precedent, the issue of additional payment is unlikely to be settled in a hurry.

It would also tell the Russians that India must be kept informed about the probe into the accident on a nuclear submarine that killed 20. The issue is of critical importance to India since both sides are finalising plans for the leasing or joint construction of up to six nuclear submarines of the same type that met with the accident during trial runs. According to the Russians, poisonous Freon gas entered one of the compartments after the fire-extinguishing system was accidentally activated in one of the compartments.

But there might not be much else on the table, in part because both countries have set up an institutional mechanism chaired jointly at the ministerial level to take care of defence ties, the mainstay of the Indo-Russian relationship.

The severely underutilised area of trade is also unlikely to receive a fillip because of the ongoing global financial crises and the failure of both sides to instil confidence in their industry to take advantage of the business potential in both countries.

Currently bilateral trade is even below the level of Indo-Soviet trade nearly two decades ago and steps are on to utilise state funds for investment. For instance, preliminary talks have been held on the possibility of India paying for the fuel for Kudankulam reactors by investing in the International Uranium Enrichment Center at Angarsk. On the other hand, Russia plans to extinguish India’s debt during Soviet times by asking it to pay for its share in a Titanium joint venture. Apart from talk of doubling of costs, the site of the plant is also causing both sides headaches.

As is the case with the proposed joint ventures in developing a military transport aircraft and fifth generation fighter aircraft, these projects too are at the negotiations stage and may not be finalised in time for Mr. Medvedev’s visit. Despite the possibility of a lack of substantial agreements that would be signed during the Presidential visit, officials here point to the concurrence between the two sides on most international issues and the prospects for closer ties in each of the issues being discussed besides the energy sector.