India and Russia have finalised negotiations on the sale of nuclear reactors. The groundwork for the sale has been laid. Once the 45-member Nuclear Suppliers Group (NSG) gives its green signal allowing nuclear trade with India, the two countries will sign a formal pact on the matter. This in turn will pave the way for Russia, which is building two nuclear reactors at Kudankulam in Tamil Nadu, to build four more reactors in India. Besides, the two sides have decided on taking steps to enhance co-operation in defence, engineering and energy. They have also committed to enhancing trade, which has been way below potential. Bilateral trade grew by 30 per cent in 2006-07. They are working on doubling it now to touch $10 billion by 2010.

The finalising of negotiations with Russia on supply of nuclear reactors is important. There is a misconception among sections in India that the Indo-US nuclear deal is only about nuclear trade with the US and that India will be dependent on purchasing US nuclear reactors. Clinching the deal with the US is an important step on the way to getting the NSG to amend its guidelines to lift restrictions on nuclear commerce with India. Once the NSG rules are changed India should be able to engage in nuclear trade with any country. India must ensure that it does not succumb to pressure from any country in deciding who it wants to trade with. The deal with Russia signals that India has several options and will exercise these options based on its interests. India must turn to countries that have the latest nuclear reactor technology to offer and have a record of being reliable partners.

India’s relations with Russia have hit choppy waters in recent months over differences in pricing of defence equipment and delays in their supply. Russia says that supply of the aircraft carrier Admiral Gorshkov will be delayed unless India coughs up more money. It is arguing that it underestimated the cost of cable required to refurbish the carrier. India feels that this demand is unreasonable as it violates the spirit and substance of the agreement that the two countries had signed. What was held up as a “gift” by the Russians to India is cooling what was once a warm relationship. The negotiations on the nuclear reactors indicate that the air might have cleared to some extent. Still, neither country should take the other for granted. Russia needs to understand that its reliability as a friend is undermined when it goes back on agreements.