The Duran Podcast - Modi in Moscow. India-Russia trade surges

Episode Date: July 10, 2024

Modi in Moscow. India-Russia trade surges

All right, Alexander, let's talk about Modi's trip to Russia, two-day trip. And Modi said that everything is on the table. He's ready to discuss everything with Vladimir Putin and India and Russia. They have a very close relationship, and it's become even closer since the special military operations, since the conflict of Ukraine. and they're doing a ton of trade, Indian Russia, more than I can remember, more than ever. So what do you expect from this meeting between Modi? Right.

I mean, I think one important thing to understand about the Indian-Russian relationship is that it is supported by a consensus in both countries. So there is no person in Russia in the political system there who does not want a strong and good relationship with India. And the same is true in India. So, you know, the Congress Party forged the original relationship between the Soviet Union and India back in the 50s and 60s. And more recently, it was the Congress Party,

when they were in government again, about a decade ago, that led India into the bricks, in fact, played a formative role in creating the bricks. Modi and Putin have developed a very close and very good relationship. But this is not controversial in either country. Now, their relations have achieved a breakthrough over the last couple of years. Trade has started in a very, very big way again. previously the relationship was very strong at a political level and Russia was also a significant

arms supplier to India but at an economic level where the economic relationship between the Soviet Union and India had once been very strong and very close in the last 30 years the economic relationship between India and Russia has withered away. Now, it's come back and it's come back strongly, but there are problems. And this is, I think, what this meeting is most focused about, because there is a massive trade imbalance between India and Russia. Russia exports oil to India on a big scale. Russia is also looking to export gas to India. And, you know, and India. Russia also wants to export machinery and other goods to India as well. But India runs trade deficits with most of its partners. It has a structural trade deficit, even though it's a fast-growing

economy. It does not have huge reserves of foreign exchange. India, anyway, doesn't particularly want to use the dollar in transactions between itself and Russia. and the Indian rupee is non-convertible and because India is not a big exporter, it's not a currency anyway that third parties want to have. And the Russians have not particularly keen on holding rupees themselves either, because they can only use the rupees in India itself. and India doesn't have a huge number of things which up to now the Russians have wanted to buy.

So this has been the major stop, the major block towards a further development of this relationship. working out the payment mechanisms. And I think that Modi is going to Moscow. This trip to Moscow is primarily about finding a way around this. And there are ways around, by the way. I mean, I think there's a misconception to think that there are not. One would be looking forward the whole new. Brick's financial architecture is partly intended to address problems of this kind.

But the Indians, I think, will want the Russians to reinvest a lot of the export earnings that they make in India, in India itself, developing parts of India's economy, establishing factories there, engaging in localising production. and India is good at producing quite an important range of consumer goods and it would be an obvious tie-up, for example, for India to start exporting many more of those goods to Russia and to do so sometimes maybe in Russian-owned factories and production systems. So this is what this meeting is primarily about.

I think there will find solutions. I think the political will to do it is there. And I think you're going to see a huge burst in the next few years in the Russian-Indian economic relationship. China, India, Russia. Yes. Yes. So if those three countries are working well, Brazil, South Africa as well, you have a strong bricks, then you have all the new members. Correct.

Who add on to the bricks. Correct. And of course, India and China have this very tense relationship with each other, which ebbs and flows. But Russia is the bridge that keeps the two. And they like it this way. This is a thing, again, people don't understand. India does not want Russia to break its connection to China. China does not want Russia to break its – it doesn't want – they neither want Russia to side with them against the other.

because keeping the Russian relationship sort of friendly, equally friendly with both, acts as a restraint on each. It means that they're not going to find themselves boxed in against each other. So it's a complicated triangular relationship, but one which for the moment has been working, really well. Yeah. What does the USA say to all of this? They've been trying to break India off

of bricks, its relationship with Russia as well, the trade that's been taking place with Russia. They've been trying for the last two, three years to move India away from the multipolar world. It's not working, is it? No, it's not working. And I think the Americans actually are both furious and bewildered about this because a couple of years ago they'd assumed that they'd won India to their side which was, they looked at India, they saw that India had a bad relationship with China.

They assumed that this is the central key aspect of Indian foreign policy and they thought to themselves, well, India is now joining organisations like a quad, it's developing its economic relationship with us, it's coming on board with the West, with the United States. But of course, India is a much more complicated society than that and country than that. It's a huge country. And it feels itself to be a rising power, which it is, by the way. And they're not going to sacrifice relations with old friends like Russia, which could prove very important in the future, and which are improving, economically speaking, very important now because the United States wants them to.

So what's going to happen is the Americans are already putting pressure on the Indians to try to get the Indians to limit their relationship with the Russians. what they're finding is that the Indians are pushing back and are forging further with the relationship with the Russians. And it's become even more important for the Indians to do that precisely because the Americans are putting pressure on them. Because that's the way India asserts its independence against the US. So it's Americans, the Americans misunderstanding these processes. and responding to them in the wrong way. The more pressure they put on India, the more the Indians will say,

well, we can't just be pushed around by the Americans. We've got to go on doing with the Russians what we are doing. And besides, Russian oil, Russian grain, Russian food, Russian investment is good for the Indian economy anyway. Yeah, I was just thinking about just to end the video, how isolated Russia has become, huh? SEO meetings. Putin was pretty much center stage at the SEO in Kazakhstan. He was in China, Vietnam, Korea. Now Modi is coming to see Putin as well. Keep in mind that Russia and India, with Jachshankar at the SEO, they also held talks. Isolation, huh? Isolation? Well, indeed, absolutely. I mean, you know, he's a pariah. I mean, that's what they are. They're an absolute pariah. Nobody wants to speak.

to them. Only India and China and most of the countries in the world, but the really important countries, you know, Germany and Britain and the United States, Beirbok, Stama and Biden, they don't really want to speak to the Russians.

The rest of the world doesn't agree. Exactly. All right. We will end the video there at the durand.locos.com. We are on Rumbleaudacity, bitch, you telegram, Twitter X and go to the the Duran shop, pick up some merchandise.

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