New Delhi and Islamabad: in search of new friends?

Authors: Tridivesh Singh Maini, New Delhi, and Manish Vaid, ORF

Over the last decade, Washington’s relations with New Delhi have significantly improved, while the former’s relationship with Islamabad has deteriorated.

These changes in Washington’s ties with Islamabad and New Delhi have coincided with two interesting geopolitical re-alignments.

Firstly, strategic ties between Riyadh and New Delhi seem to be on a high, with Riyadh extraditing three militants to India, including Abu Jundal in June and Fasih Muhammad in October 2012. India has sought the extradition of four more Indian Mujahideen men from Saudi Arabia under the extradition treaty signed by Manmohan Singh during his visit to Saudi Arabia in 2010. India and Saudi Arabia revived their relationship post-9/11, with visits to India by King Abdullah and Saudi Arabia’s foreign minister in 2006 and 2008 respectively. India’s external affairs minister and its national security advisor also visited the Gulf in 2008. Yet these moves by the Saudis have been largely attributed to increasing US pressure. The United States in turn wants New Delhi to distance itself from Tehran.

Saudi Arabia and India are capitalising on their improved strategic ties and have already decided to cooperate in the oil and gas sector. The two countries have also discussed issues relating to cooperation in the hydrocarbons sector. Saudi Arabia is already India’s largest oil supplier, yet during his October 2012 visit to New Delhi, Saudi Arabia’s assistant petroleum minister, Prince Abdul Aziz Bin Salman Bin Abdulaziz, showed readiness to supply additional crude oil to India as an alternative to Iranian crude.

Secondly, India and Saudi Arabia’s increasingly close relationship has undoubtedly irked Pakistan, an old ally of Riyadh. Similarly, bilateral ties between Moscow, an old ally of New Delhi, and Islamabad have seen a significant upswing and Russia seems to be reformulating its strategic aims and objectives in South Asia.

There have been high-level visits from Pakistani representatives to Russia, including by the Pakistani foreign minister and chief of army staff, General Ashfaq Parvez Kayani. The Russian foreign minister, Sergei Lavrov, also visited Islamabad on 3 October 2012, helping to set aside any discontent over President Putin’s cancelled trip to Pakistan; Putin was supposed to participate in a summit involving Pakistan, Tajikistan and Afghanistan in October.

A number of arguments are being put forward for this improvement in relations between Russia and Pakistan. Firstly, it is believed that Pakistan’s strained relationship with the US, especially in the aftermath of Operation Geronimo is pushing it closer to Moscow.

Second, it is believed that Russia intends to strengthen its presence in South Asia by developing closer relations with Pakistan, while gearing up for the post-2014 regime change in Afghanistan.

Third, Moscow’s cosying up to Islamabad has come at a time when there appear to be significant fissures between Russia and India, two countries which have previously been strong allies.

On a number of issues, Moscow has been miffed by New Delhi. The first major illustration of this is the Russian government’s strong concern over the Supreme Court of India’s verdict cancelling 21 out of 22 licenses for 2G spectrum, causing a huge loss to Russian telecommunications company Sistema. The company had invested US$3.1 billion in the venture. According to Russia, this could impact Indo–Russian bilateral cooperation and, in turn, affect foreign investment.

The second major issue that has not particularly helped New Delhi–Moscow ties relates to the third and fourth nuclear reactors of the Kudankulam Nuclear Power Project in Tamil Nadu, which is supported by Russian technical experts. The problem is the civil nuclear liability law the Indian government passed in 2010. The law imposed legal liability on the provider for any nuclear mishap, and increased the cap on damages liable to be paid. These two factors were cited to justify the postponement of Putin’s visit to India until December 2012. Despite various efforts, the Indo–Russian bilateral relationship has failed to reach mutually desired outcomes. The current row between these two nations will only escalate tensions further.

Are we seeing the decline of Moscow–New Delhi and Riyadh–Islamabad ties? Despite the setbacks, India’s oil and gas linkages with Russia are growing and India is already planning further investment in Russia in this area. For example, ONGC Videsh Limited (OVL) has a 20 per cent participating interest in the Sakhalin-1 oil and gas project. OVL also has a 100 per cent stake in Imperial Energy Corporation, while GAIL (India) Limited and Indian Oil Corporation Limited have signed agreements with Gazprom Marketing and Trading Singapore to secure natural gas from Russia on a long-term basis, starting from 2017–18.

Moreover, Russian oil company Rosneft has opened up a window for foreign entry into its exploration and production business by providing tax concessions in the Russian Arctic Region. This has prompted OVL to consider entering into a joint venture in the region with ExxonMobil, or even with other partners in similar projects.

Like Moscow and New Delhi, Riyadh and Islamabad are old allies. There are numerous issues which will ensure that closeness between New Delhi and Riyadh will not cause bilateral ties to spiral downward. If Riyadh gives up on Islamabad, the latter will move closer to Tehran, something the Saudis want to avoid.

Tridivesh Singh Maini is a New Delhi-based columnist.

Manish Vaid is a Research Assistant at The Observer Research Foundation, New Delhi.

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