11 December 2014 | 13:41

Sanctions-hit Putin visits India to boost energy, trade ties

Russia's President Vladimir Putin will hold talks Thursday with India's new prime minister as his sanctions-hit country seeks to strengthen energy, defence and strategic ties in Asia, AFP reports.

Putin will be looking to advance nuclear power, oil and natural gas and even diamond deals with longstanding ally India on his first visit to India since Prime Minister Narendra Modi swept to power in May.

The president is seeking new markets for Russia's natural resources as its economy reels under US and EU sanctions over its backing of an uprising in the Ukraine and annexation of Crimea.

"He (Putin) wants to show the world that he isn't isolated and to a certain extent he's not, he still has the BRICS countries," Russia expert Nandan Unnikrishnan said of Putin's visit.

"India now is all about development and it's looking to Russia to share its technology on military hardware for making here," said Unnikrishnan, a senior fellow with Delhi-based think tank the Observer Research Foundation.

Putin is expected to focus on boosting two-way trade, which stands at just $10 billion despite strong ties that date back to the 1950s after the death of Stalin.

Since coming to power Modi has sought closer ties with US President Barack Obama, who has accepted an invitation to join India's Republic Day celebrations in January.

But India opposes joining Western sanctions against Russia, and is likely to disregard a caution from Washington that now is not the right time to do business with Moscow.

Putin said he would be seeking to strengthen their "privileged strategic partnership", singling out more reactors for energy-hungry India's nuclear power plants and hiking military hardware sales.

"We will devote particular attention to expanding trade and economic links and boosting mutual investments," he told Indian media before his arrival early Thursday.

'Very strong' bond

Modi said he was "looking forward to a productive visit that will take India-Russia ties to newer heights," in a Twitter post late Wednesday.

"The bond between the people of Russia and India is very strong. Our nations have stood by each other through thick and thin," he added, welcoming Putin in Delhi.

Russia, which has the world's second-biggest natural gas reserves, is looking to expand energy links with Asian nations to counter the Western sanctions.

Moscow is seeking greater investment from Indian state-run companies in Russian oil and gas projects, including ones being explored in the Arctic.

But Putin poured cold water on a proposed pipeline pumping gas to India, saying it might not be cost effective, instead emphasising current arrangements to ship liquified natural gas in tankers.

Russia has supplied two nuclear reactors to a plant at Kudankulam in southern India under a long-delayed agreement, and will push to supply more under deals signed in 2010 and 2008.

Putin is also meeting with Indian President Pranab Mukherjee and attending the World Diamond Conference, with both sides keen on ramping up direct exports to India.

Russia is the world's top producer of rough diamonds and the majority of them pass through India, where a cheap workforce cuts and polishes the gemstones before most are exported again for use in jewellery.

But only about a fifth of rough produce is sold directly from Russian mines to India, with the rest passing through diamond hubs such as Antwerp and Dubai.