In the forum the Indian Prime Minister announced Act Far East Policy for Russia whereby it will give line of credit worth $1 billion for the development of Russia’s Far East regions. This strategic move has various connotations for both the countries. Russia has been inviting neighbouring countries for its “Pivot to Asia” strategy wherein it calls for investments and cooperation by various Asian countries.
Here is everything you need to know about it.
Key features of the policy
1. Paradiplomacy
With the new economic and social order taking shape, a new set of policy is also slowly taking birth. Paradiplomacy implies state to province relations. This kind of strategic bond enables states for eg. Gujarat, Uttar Pradesh, Maharashtra etc. build separate association with another country. This would not only enable small scale trade practices but also, give a moral boost where language and cultural barriers will be broken and a possibility of amalgamation will only bring a positive change in the way global friendships are perceived.
2. Russia’s Resource rich regions
India won’t be the first country to invest in Russia’s far east regions. Over 17 countries have already approached Russia for its natural resources and ease of doing business. India is a growing economy with dire need for energy resources. It has been dealing with countries like Venezuela and Libiya for its fuel and energy supply apart from the gulf, however, these countries have been dealing with their own domestic problems hence, the time is ripe for looking at alternatives and Russia proves to be an excellent prospect in this respect. The Kundankulam Nuclear Project will see construction of 6 reactors. India has been dealing in mainly countries having oil bearing oil fields, now its venturing into Gas sector. Russian companies will be encouraged to participate in the gas projects in India.
3. Method to revive languishing trade with Russia
The two countries aspire to reach $30 million worth trade between the two however, the trade has been languishing at around $12 million. Therefore, this new venture will improve this figure immensely. If India Inc. shows appetite for risk and increase the investment the economies of both the countries will prosper.
4. Manpower from India
Russia’s easy migration policies will not only help cross border education and tourist culture but also help in refurnishing human capital from India and vice versa, both skilled and unskilled. Around 10 MoUs were signed regarding the skill development and education sector.
5.Eurasia and Indo-Pacific
The Prime Minister highlighted the Vladivostok as being the Sangam of Eurasia and Indo-Pacific which has the ability of opening opportunities for extending the connectivity of International North South Corridor (INSTC) to the Arctic and Northern Sea route. Although, climate change is greatly disturbing reality however it is the truth that seas are becoming more navigable and hence, having a friend to help getting through would prove fruitful. There is no denying the fact that it will help balance out the hegemony of China in the region.
The role of sanctions should also be paid heed too. The Indian banking system should be equipped with the challenges which would be posed by sanction imposed on another country.
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Shortcomings of the policy
The policy, is not, however free of challenges. The $1billion worth line of credit was not announced in a bilateral meeting, rather on a forum. Now, there needs to be a clarity wherein it should be mentioned as to whether the investment would be Govt. to Govt. or should seek private players only whereby there will be lesser or no governmental guarantees.The role of sanctions should also be paid heed too. The Indian banking system should be equipped with the challenges which would be posed by sanction imposed on another country.
In Conclusion,
It is needless to say, this move will take the two countries into a different yet better arena of friendship. Russia has always been a supporter of India and India has reciprocated with the same warmth. It only remains to see whether this seed blooms into a full flower. The two countries have done tremendously well in fields such as Space, Defence and Nuclear Energy and now it's turn for setting an example for excellent Economic cooperation.
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Hello! My name is Manisha Vishwakarma, an English Major from Delhi University currently pursuing Masters in same. A vigorous learner in the day, theatre enthusiast by evening and poet at night, I believe no mountain is impossible to climb. A neat freak, with next to Monica Geller's OCD, I can be seldom found correcting cereal aisles. You will often find me in a library or a nearby coffee house. I believe in perseverance and quality hard work with a tinge of smartness.
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