• Thu. Apr 25th, 2024

By Aleksei Zakharov 

Forced by the unprecedented isolation from the West, Russia has embarked on a course of outreach to the global South. South Asia is a region where Moscow has been a dormant player for a long time, showing little interest in developing ties with regional partners beyond India. However, this is now changing as South Asia is being reconsidered as a junction of Russian geostrategic and economic interests, so Moscow’s growing involvement in India’s immediate neighbourhood requires further examination.

The implications of war in Ukraine 

The Russia-Ukraine conflict has had multiple effects on South Asian nations spanning from geopolitical to economic challenges. As a result, they have found themselves torn between the West and Russia, though generally steering a middle path. While India has been exemplary in walking a fine line, its neighbours in the region, being more vulnerable to external factors, have exhibited their neutrality in different ways.

Nepal has denounced Moscow’s ‘special military operation’ and has approved most of the UN resolutions against Russia.

Bangladesh has twice supported the United Nations (UN) resolutions condemning Russian actions in Ukraine and has been meticulous in following the Western sanctions against Russia. Nepal has denounced Moscow’s ‘special military operation’ and has approved most of the UN resolutions against Russia. Kathmandu was also forced to stop issuing labour permits to its citizens for Russia and Ukraine following reports of Nepali soldiers serving in both warring armies. Sri Lanka, albeit facing the dramatic impact of the war in Ukraine on its economy, has refused to take any sides. Pakistan’s approach to the conflict has been most controversial as compared to other regional states. Islamabad has consistently abstained on the issue at the global level in attempt to follow ‘strict neutrality’, but the Pakistani Army reportedly supplied ammunition to Ukraine.

While Russia has faced varying responses to its war in Ukraine throughout South Asia, it has recently stepped up its presence in the region, as evidenced from official visits and efforts to revive economic ties.

Political mechanisms

There were several high-level exchanges with South Asia in 2023, which hint at the countries of specific interest to Moscow. As India was presiding over the G20 and Shanghai Cooperation Organisation (SCO) in 2023, it became an important destination for Russian ministers and parliamentarians. Russian Foreign Minister Sergey Lavrov, for instance, visited India three times in 2023 and the Indian External Affairs Minister, Dr. S. Jaishankar, reciprocated with his five-day visit to Russia. In a first for any Russian foreign minister, Lavrov also visited Dhaka in September 2023, highlighting enduring ties and making an effort to take the cooperation with Bangladesh forward.

Russia’s Security Council Secretary, Nikolay Patrushev, visited Sri Lanka in December 2023 to hold meetings with the country’s leadership covering political, security, defence and economic issues. Security consultations between Moscow and Colombo have turned into a regular feature.

Russia’s Security Council Secretary, Nikolay Patrushev, visited Sri Lanka in December 2023 to hold meetings with the country’s leadership covering political, security, defence and economic issues.

An obscure part of Russia’s regional policy is its relationship with Pakistan, which has been moving forward against all odds. Despite the political imbroglio in Islamabad and Pakistan’s military support to Ukraine, the bilateral dialogue has survived intact and has recently seen high-level talks on strategic stability in Moscow and a visit to Islamabad by the Russian Federation Council’s (the upper house of parliament) delegation, which, apart from meetings with Pakistan’s Senate and caretaker government representatives, acted as international observers at the country’s general elections on February 8.

In an interesting turn of events, Russia is now marketing itself as a shield for fragile democracies of the region against external criticism. While Bangladesh and Pakistan’s Western partners express reservations about their elections, Moscow hails the electoral processes in these countries. This stance seemingly pursues two objectives: first is to debunk ‘external interference’ and drive a wedge between a criticised country and the West, and second is to secure the backing of the region in the future elections in Russia.

The new economic connections 

In South Asia, Russia is exploring fresh avenues for both exports and imports, especially given the progressively rigorous sanctions and precarious supply chains. In an attempt to alleviate the consequences of its war in Ukraine, Russia has offered the regional states an array of commodities, primarily energy resources, fertilisers, grain and sunflower oil.

The energy sector is an important part of Russia’s economy and plays a crucial role in its external engagements. Currently, India is the largest importer of Russian crude, accounting for 40 percent of all supplies. While Russia has been exploring the possibility of expanding its crude oil supplies to include Bangladesh and Sri Lanka, due to the technological limitations of their refineries, these countries have primarily received Russian oil through India or West Asia.

Russia is exploring fresh avenues for both exports and imports, especially given the progressively rigorous sanctions and precarious supply chains.

Following extensive discussions, Pakistan has reached an agreement to import Russian crude oil on a commercial basis. The supply volumes have been rather low thus far, and the long-term agreement between the two sides is uncertain owing to the limited throughput capacity of Pakistani ports, which complicates the logistics of supplies and price setting.

An even more consequential sphere of Moscow’s interest is civil nuclear energy as Russia has been constructing two nuclear power plants (NPP) in the region and is seeking new markets. In India, the Russian state-owned nuclear giant, Rosatom, had built two units of the Kudankulam NPP, which were connected to the electricity grid and brought to full capacity in 2014, and is set to complete four more. In Bangladesh, the same company is constructing the Rooppur NPP, and the first unit is expected to become operational in late 2024. Recently, Russia has mooted the establishment of a small nuclear power plant in Sri Lanka. As the talks are underway, the possible options are either a ground or a floating block, or both. While India’s energy sector is relatively diversified with nuclear energy taking up a small share, in the cases of Bangladesh or potentially Sri Lanka, the new NPPs can increase Russia’s economic and even political heft in these countries.

The Russian state-owned nuclear giant, Rosatom, had built two units of the Kudankulam NPP, which were connected to the electricity grid and brought to full capacity in 2014, and is set to complete four more.

Agriculture is another significant area of Russia’s regional economic policy. Fertilisers and agricultural products account for a large share of trade with the region. Bangladesh is the third importer of Russia’s grain (outside of Eurasian Economic Union) in the first half of 2023/2024. Pakistan is another large importer of grain as Russia’s exports of this commodity to Islamabad are now taking up to 75 per cent of the total bilateral trade.

Although most regional states have been careful in complying with sanctions against Russia, in some cases, they have been instrumental for Russia to circumvent the restrictions. For instance, after May 2022, the Maldives has emerged as a crucial transit hub for semiconductor shipments to Russia, ranking second only to China. Russia’s economic outreach to South Asia would have also been impossible without Beijing’s involvement: Currently, a great part of transactions with Russian entities—be it in energy or agriculture—is conducted in yuan and through the Chinese cross-border interbank payment system (CIPS). The growing utilisation of Chinese financial infrastructure appears as both the lifeline for Russia’s regional economic projects and a looming reliance on Beijing’s goodwill. 

Russia’s engagements across South Asia demonstrate its intention to maintain regular political dialogue with regional powers. Desperate to get around international isolation and seeking to co-opt new ‘friendly states’, Moscow seems ready to make allowance for their mixed positions on its actions in Ukraine.

(Aleksei Zakharov is a Research Fellow at the International Laboratory on World Order Studies and the New Regionalism Faculty of World Economy and International Affairs, National Research University, Higher School of Economics, Russia)

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