Former Indian Ambassador to Russia: India needs to build its own defence industry

During her recent trip to India, Pravda.Ru special correspondent Daria Aslamova spoke with former Deputy National Security Advisor of India, former Indian Ambassador to Moscow Pankaj Saran. He explained why India refuses to purchase Russian weapons, what Moscow should do with non-convertible Indian rupees, and what Delhi’s main goal is today.

Photo: Pravda.Ru by Daria Aslamova

Hello Mr. Saran, we would like to have this interview with you to discuss the current relations between Russia and India, as well as the state of affairs within BRICS as the bloc is going to celebrate 20 years of its history soon. You deal with national security issues. What security challenges do Russia and India deal with today? Do we have common interests at this point?

Actually, we have a lot of common interests. First and foremost, it's terrorism. Terrorism is a big issue for India. We are fighting the weaponisation of different sectors of economic activity. It is also important for both countries to cooperate in creating the multipolar world that will be stable and peaceful. Conflicts should be regulated through negotiations and peaceful means. We have cooperated in many international forums on how to prevent terrorists from getting finance. Russia and India also stand against expansionism and territorial aggression. There were many BRICS forums in the past, in which our leaders delivered important speeches.

There were a lot of words, but not so much action. India used to be one fo the largest buyers of Russian weapons. Today, this is not the case, and India has turned towards the West. Why such a change?

India does have a very long history of buying weapons from Russia — a few decades. We have procured some of the most sophisticated arms from Russia. Today, almost 60-70 percent of all of our military equipment is of Russian origin. However, when the threat perception changes, as is in the case of India, you need to obtain different kinds of weapons and platforms that you can get from different countries as well. This is a part of the evolution process of the Indian Armed Forces. Modern warfare has become different as well. In addition, India needs to shift from being an importer of weapons to their manufacturer. India wants to make these weapons at home. As a matter of fact, this is a number one priority for the government today — to create our own defence industry that we did not have in the past. With Russia, we have Brahmos missile joint venture, there is also the Kalashnikov AK 203 — the Russian weapons that are now being made in India. We produce the weapon as a platform that can be upgraded, like Mig or Sukhoi aircraft or tanks, together with Russian original equipment manufacturers. They have their license and technology and intellectual property, so Indian companies cooperate with Russian counterparts. There is also the question of spare parts. Until now, all the spare parts and components were coming from Russia. This is a big question that India is facing today. After 60 years of cooperation with Russia, the Indian defence manufacturing industry has never materialised. Why is that so? Now we ask Russian companies to help us build our own industry. We can not remain just an important of military equipment forever. It's not just Russia that can see this policy in India today. Those days when you could simply import weapons from other countries are slowly coming to an end. Of course, we can not do it immediately, it will take time, but the process began a few years ago. However, our government is now trying to make Indian companies stronger in the first place — both private and public sector companies. It is now more important to understand the present and the future of our military cooperation with Russia.

If we look at the conflict in Ukraine and the competition between Russian and Western weapons there, which ones do you think is better? You could see how Western tanks perform there — Abrams and Leopard.

I am not a military expert, and I don't know the details about the war in Ukraine either. What I know is that when India imports from Russia, we try to import the best. We had not bought up to 70 percent of military equipment from Russia if we had had doubts about the quality of Russian defence products. Over the period of the last few years, the Russian side has given us a number of high technology items. As far as I can see, the Russian Army is geared and tailored to fight the war with NATO, not with Ukraine. Russia has developed new weapons as well, such as hypersonic missiles and drones, artificial intelligence systems and so on. There is definitely an evolution in all this. We can see some ща this technology in use in Ukraine. At the same time, there are some cases when the Russian army has made advances, but there are also cases when the Russian army has not succeeded. NATO is supplying a lot of sophisticated weapons to Ukraine.

In my opinion, Russia and NATO are almost at par in terms of the quality of weapons. War is a different issue, when one has to talk about not only weapons, but also military strategy, doctrine, morale of the personnel — there are so many things that affect success on a battlefield.

At the same time, as long as Russia and India have been such long-standing partners in the past, we have developed a very close relationship between our military offices. Our defence ministers exchange information about hardware and military doctrine. Today, however, everyone is modernising. India wants to have the best sources of weapons. In the past, Wester countries did not want to sell their weapons to India. Today, the situation is different.

But it appears that they want to oust Russia from the Indian market.

There are a few — 10 or 15 — countries in the world that have highly-developed defence industrial production. Russia is one of the biggest manufacturers, and these manufacturers are competing now. They see India as an opportunity for their export products. However, today is not the day when you could just import from any country. India's procurement policy of today is to import along with technology. India simply can not for the way that it used to do it in the past. India also wants to build its own industry and create jobs. Different branches of the armed forces — the air force, the navy and so on — they will choose to decide what they want based on the track perception. Afterwards they will decide how to proceed and where to go, what country to import from, etc. We are entering a more competitive environment are far as Russia's defence exports are concerned. I think that the Russian side is aware of that. We have very good examples of joint ventures and joint collaborations. Yet, because of the Ukraine conflict, the Russian Armed Forces are under pressure. They need to meet their own demands on the Ukrainian front in the first place. India has to see what is left for her needs, and this is also an issue.

Russia is now living under the biggest sanctions in history. Russia is hoping that India will be out there as a helping hand. However, we can not pay each other, we do not have common currency and the Indian rupee is not convertible. The business growth is not impressive either: Russia is selling oil and gets pharmaceuticals in return. This is not serious for such a huge economy as India. Why is there such a big imbalance in trade turnover?

After the conflict in Ukraine broke out in 2022, Russian oil exports to India surged. The volume of trade in the oil industry has skyrocketed.

As a matter of fact, India's exports to Russia amount to only 3.3 billion dollars, which is nothing for such a large economy.

I agree that trade is one of the areas in which we have not performed well. We have to diversify. A lot of it has to do with India's own export basket, what India is capable of exporting. It also has to do with the state of the Russian economy. If the Russian economy is diverse and growing fast, then it wants more Indian products, such as pharmaceuticals, electronic products and so on. Yet, we are going through a phase of structural transformation of the relationship. There are many issues here, and the payment issue is one of them. Russia is a resource-rich country, so India imports Russian oil and gas. I believe our governments are trying to find a way out to improve our trade. As for the payment issue, one of the solutions, as far as I know, is as follows. As long as Russia has surplus rupees and does not know what to do with them, Russia could invest those rupees in India.

I know about this, but this is not a solution still. When BRICS was founded, we wanted to get rid of the dollar peg and become independent of the US currency in our mutual payments. However, the US dollar is still holding us hostage. That was one of the purposes of BRICS — to make payments between member states as easy and comfortable as possible. Yet, we are stuck. We have not found a solution, India has not found a solution either. We can not do business like that, you know.

India was very happy to trade with Russia. Yet, there are Russia-specific problems. Russia is in a conflict with the West, there is a war going on. If you look at the root of the problem, then it is not about India changing its opinion. The problem is about Russia's problems with the West, and everyone is facing the aftermath of that conflict, including India. As for the de-dollarization process, we have to be realistic. There is talk of the common currency, but it is not happening soon. About 80-90 percent of global trade today is taking place in hard currency, such as the dollar. The percentage of other currencies, such as the yuan, dirham, ruble, rupee, etc, is very small compared to that. Therefore, the switch to national currency or common currency is not happening in the foreseeable future. We discussed mechanisms to bypass SWIFT with Russia. India also entered into agreements with different countries of the world to enable digital rupee payments — with Singapore, the UAE, France and some of our neighbours. Yet, it is not convertible either. However, we have entered into agreements with those countries to use the Indian rupee in the national transaction. Gradually, the Indian rupee is being used for settlement. India is also concerned about the weaponisation of currency and trade, and we are trying to find other mechanisms. This is not going to take one or two years, you see.

It appears to me that everyone in India likes saying: No hurry, take your time. However, time is flying by and the world is changing so fast.

India is integrated into global economy and falling out of all these transactions and systems is definitely not an option. It's difficult to become independent from everything. We do not support USA's unilateral sanctions against Russia. However, there are secondary sanctions. Indian and even Chinese companies are being cautious now. If you enter into a financial transaction with a Russian entity, and if this transaction is routed through the US or Europe, you may fall under sanctions too. We have a problem here of course, but this is a question of how creative Russian and Indian negotiators can be. This is a glass half-empty, but there is also a glass half-full. In the last two years, India's imports of Russian oil have gone up hugely.

India has a huge discount there too. It seems that India is trying to take advantage of every situation now. China is having friction with the United States now, so India is trying to side with America for more sanctions against Russia while being a helper in USA's struggle with China.

Isn't that good?

Well, in Russia we say — you can not sit between two chairs. India is trying to sit between 10 or even 20 chairs, but one day it may fall down to the floor and hurt its butt, you see.

This is the aftermath of the world that we are living in today. If we go back to the cold war, India could choose which side to take, but making such choices today is impossible. in fact, no one is doing it today, not even China. China has 700 billion dollars of trade with the United States and another 700 billion — with Europe. All of it is done in hard currency. Their trade with Russia is less than 100. Every country is utilising the opportunity to maximise its interest. India's objective is to grow its economy by seven or ten percent. If you grow fast, you need everyone. India can't afford to choose. By the way, the United States is upset with India, like Russia. They are wondering why India is still friends with Russia. The Americans keep telling us that we should break off our ties with Russia, that India must choose the side of the liberal democratic world order. We tell them that this is not going to happen. India has its own strategy. India today is completely different what what it was in the 70s or 80s. India needs everyone and you have to live with it, I'm afraid. I do not mean just Russia — I mean everyone. We have a huge border dispute with China, but India's trade with China today amounts to 130 billion dollars. This is a lot more than what we have with Russia, but our relationship with Russia is much better than that with China. We are telling the West that India's relations with Russia is going to continue. We will not accept it if someone tells us what to do. After the conflict broke out in Ukraine, the West was not happy with the position that India took about the war. Yet, we stand by our position, and that requires a lot of confidence. India is a member of BRICS, SCO, Quad and other international associations.

Globalists do not want to repeat their mistake that they made with China. They were connived that they would be able to use China to their own advantage, but as we can see it is China that is using them now. They do not want to grow one more monster. Do you think the collective West will let India become a new superpower?

We are aware of what people are thinking about India, but this is not going to stop us. Every objective condition today favours the rapid growth of India's power. We believe that India's rise is not as threatening as the rise of China. China is an 18-trillion dollar economy today. India is four trillion. This is a very big gap and India has a very long way to go before we can reach the level of China. They equate India with China at times, but we are not the same. At the same time, India's growth and rise can not be stopped. This is out time. Our government and prime minister created the road map till 2047. India will always remain a country that believes in international law. However, India does not have a seat in the UN Security Council. The body was created in 1945, but they say that this council can not be changed, they want to keep it as it is. However, the UN has to take into account the realities of today, not the reality of the post-war 20th century. You will find India agitating for more participation in global problems, but India is not going to be a trouble maker. In order for India to succeed, you need a peaceful environment, not war. This is what we have been telling everyone. When Prime minister Modi told President Putin that this is not an era of war, the basic message was — try to resolve the problem though negotiations. War is creating only problems for India and the Global South. At the same time, what country can allow or not allow India to succeed? We have our aspirations, w want to eradicate poverty. The bigger danger for the world is not if India succeeds. The bigger danger is if India fails. Which system of the world can sustain the population of this size? It's in everyone's interest to keep India going.

If I am not mistaken you have 300 languages in India, you have so many religions and even different versions of those religions. I can not even imagine how India survived as a big unified state. There are many small countries that are so conflicted, but India is still functioning like one big and solid organism. How can this be possible?

This is a very fair and legit question to ask. Indeed, people are fighting all over the world, in Gaza, Yemen, Sudan, and so on and so forth. I went to the USSR, to Moscow in 1985. I was a young diplomat and I traveled to many parts and republics of the Soviet Union. I was also asking this question to people in Frunze, Tajikistan, Latvia, etc. I wanted to know how such a huge country could be existing as one. One of the fundamental reasons why India exists the way it is today is about the pursuit of democracy as a political system. The political elite of India recognised the diversity of the country when they drafted the Constitution. During the times of British colonialism, there used to be 500 princely states. We learned that lesson. We decided to build a federation of states within a democratic system. A lot of powers were given to the states. Whenever we try to impose any cultural restrictions on any particular region, there would always be big problems. Today we have reached an equilibrium. We respect cultural differences of different states. We respect our languages — we have 17 classical languages, they are separate languages, not dialects. Individual constituents of the republic need to be able to function their way. Our democracy has a 100-percent record. People may choose their governments or they may kick them right out if the governments that they support do not meet their expectations. Yet, there is no civil unrest, no military coup. government officials can easily accept their defeat and leave. The parties that are ruling in Delhi can be completely different from that parties that are ruling the states. We respect plurality based on democracy and diversity.

This does not sound like a good explanation. There are so many democracies that each other from within and suffer.

One thing that I didn't mention to you is called the Indian civilisation. It's 5,000 years old. This is one of the oldest living civilisations of the world. China, India and Persia. If you look at the map of the world and where India is located, you can see the whole mass of the subcontinent that is very distinct from Tibet up north or Chinese civilisation. They have an ancient history too. The communist party in China is relatively new, it took over only in 1949 or 1950. The Chinese civilisation is completely different. Before the British came, we had a common boundary between India and Persia, and one of the greatest problems that we faced was the partition of India in 1947, when the state of Pakistan was created. Pakistan was established as a homeland for Muslims of Asia, but the idea was flawed — breaking up a homogeneous landmass into artificial states. That was part of the British policy.

But you still survived, which is astonishing. Thank you very much.