Russian premier Vladimir Putin will offer a traditional cocktail of arms and oil deals when he travels to India on Thursday to persuade a Cold War ally to buy new weapons amid rising competition with the United States.
The Russian economy shrank by 7.9% last year after a decade of oil-fuelled boom and Putin sees the defence sector as key to reviving growth. But Moscow often needs to offer incentives to sell its usually outdated military equipment.
India is one of the world's top arms importers and plans to spend tens of billions of dollars on defence in the next years in a move causing unease in long-time foe Pakistan and regional rival China.
"The United States is gradually squeezing Russia out of the regional weapons market thanks to its technological superiority and political pressure," said Alexei Mukhin, who directs the Moscow-based Centre for Political Information.
"Since it is a second big Russia-India meeting over the past year, one could assume Putin wants to change that... It is almost guaranteed that new preferential energy deals for India would be discussed," he said.
The last meeting between Putin and Indian premier Manmohan Singh in Moscow in December failed to generate big deals to emulate the landmark oil-for-arms deal signed by the two countries earlier in the decade.
Under that arrangement, India's state-run explorer Oil and Natural Gas Corp became a 20% stake holder in the $15 billion Sakhalin-1 oil and gas project on Russia's Pacific island of the same name.
In a separate deal, ONGC also acquired Russian mid-sized oil producer Imperial Energy for about $2 billion and has said it is looking for overseas opportunities in Russia and elsewhere in the former Soviet Union.
Comments