India and Russia signed
billions of dollars of defense and energy deals on Saturday at a summit that
sought to inject new life into a relationship that has been tested by shifting
global alliances and conflict in the Middle East.
India's Prime Minister Narendra Modi (R) speaks with Russian President Vladimir Putin during exchange of agreements event after India-Russia Annual Summit in Benaulim, in the western state of Goa, India, October 15, 2016. REUTERS/Danish Siddiqui
Under the biggest agreement, a
group led by Russian state oil major Rosneft (ROSN.MM) said it would pay $12.9
billion for a controlling stake in both India's Essar Oil and port facilities
that it owns.
The countries, which had
strong ties during the Cold War, announced plans for a joint venture to build
helicopters in India. New Delhi said it would also buy surface-to-air missile
systems and stealth frigates from Moscow.
"Ours is a truly unique
and privileged relationship," Indian Prime Minister Narendra Modi said
after talks with Russian President Vladimir Putin in the western seaside state
of Goa.
Modi said that his views were
aligned with Putin's on the unstable situation in Afghanistan and the Middle
East, where Moscow is at odds with the West in the five-year-old civil war in
Syria that has killed hundreds of thousands.
"We are conducting a
comprehensive dialog on a wide scale of international issues, in which Indian
and Russian approaches are close to each other or coincide," said Putin.
Modi also praised Putin's
support for the fight against international terrorism, which India accuses its
neighbor and rival Pakistan of sponsoring. "Russia's clear stand on the
need to combat terrorism mirrors our own," Modi said.
MULTIPLE DEALS
The Rosneft-Essar deal will be
the biggest foreign takeover in India, and Russia's largest outbound deal,
according to Thomson Reuters data.
It comes as Russia moves to
reassert its role in global affairs and at a time when its own economy is
stagnant, hit by Western sanctions and low oil prices.
Under the deal, a group led by
Rosneft will acquire 98 percent of Essar Oil, and with it a 400,000
barrels-per-day refinery and port at Vadinar for $12.9 billion, the two sides
said.
Russian state bank VTB
(VTBR.MM) said it would refinance $3.9 billion owed by the Essar Group. Rosneft
would pay $3.5 billion and its partners, oil trader Trafigura and investment
fund UCP the same amount for an equal joint stake.
The refinery deal follows a
string of upstream investments in Russia by Indian companies in recent months
that, Modi said, were worth $5.5 billion.
Also on display was Russia's
nuclear prowess, with the second reactor of the Russian-built Kudankulam plant
in Tamil Nadu hooked up to the grid and concrete being poured in a ceremony
carried by a TV linkup to mark the start of work on the third and fourth
reactors there.
Putin said that Russia would
be able to build a dozen nuclear reactors in India over the next 20 years to
back Modi's growth strategy for Asia's third-largest economy, which continues
to suffer chronic power shortages.
HELICOPTERS, MISSILES, SHIPS
The defense pacts will also deepen military ties
between the two countries that dates back to the Soviet era, when India
entirely depended on Moscow to equip its armed forces. The United States has
since taken over as India's top arms supplier.
Indian military officials have said the plan is for
the joint venture to build at least 200 Kamov 226t helicopters required by the
country's defense forces. Hindustan Aeronautics Ltd will be the local partner
of Russian Helicopters and state arms exporter Rosoboronexport.
The S-400 surface-to-air missiles would strengthen
India's defenses along its borders with China and Pakistan, Indian military
officials have said. Also agreed were plans to build and supply stealth
frigates for the Indian navy.
Russia's Deputy Prime Minister Dmitry Rogozin, who is
in charge of space and military industries, said two frigates could be built in
India and two in Russia, RIA news agency reported. Rogozin said the ships may
later be equipped with missiles manufactured by BrahMos Aerospace, a venture
co-owned by the Indian and Russian governments.
(Additional reporting by Rupam Jain and Sanjeev
Miglani; Writing by Douglas Busvine and Euan Rocha)
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