As part of a diplomatic visit to Moscow by Indian Prime Minister Narendra Modi, Russia and India yesterday agreed to an oil shipping deal that will involve 10 million tons of oil sold to India by Russia annually for the next 10 years.
The agreement on oil sales was part of a larger group of 16 agreements signed between Russia and India dealing with different areas of economic and military cooperation. In another of the agreements, Russia confirmed plans to construct at least six new nuclear power plants in India over the course of the next two decades in an attempt to build energy infrastructure in the Asian nation. Also reaffirmed was the military-technical agreement put into place earlier this year between Russia and India. The agreement, which at the time constituted largely a sale of Russian arms to India, has expanded into joint development of next-generation missiles and aircraft.
“Russia is our most loyal partner, particularly in the fields of defense, security, that’s why I’ve come [here] to welcome our partner to participate in our country’s economic progress,” said Mr. Modi, speaking to the critical nature of India’s relationship with Russia. Russian President Vladimir Putin, who signed the various agreements on behalf of his nation, also urged private investors in Russia to pursue capital investment in India, which is seeking to modernize both its military and domestic industrial infrastructure in coming years.
The oil deal, in particular, stands to benefit both parties. Earlier this month, an extension of European Union sanctions denied Russia the European oil market for six more months at least. Speaking with regards to the effect of the worldwide oil glut on the price of crude oil, Russia’s finance minister also stated that he expects oil prices to drop as low as $30 per barrel in the coming year. Owing to the close tie between energy exports and the strength of the ruble in the global currency market, breaking into the untapped energy demands of India is a move that will stabilize Russia’s economy and give it a new market to sell into.
By Presidential Press and Information Office[see page for license], via Wikimedia Commons
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