Month: February 2012

“Trade Unions do not represent the poor”, says Samir Saran

The National
February 28, 2012
Please find here the link to the original article.

NEW DELHI // Millions of government workers are set to strike today in one of the biggest industrial actions in Indian history. All 11 of India’s central trade unions – each with at least 400,000 members – will take part.

They will be joined by about 5,000 local unions, after last-minute appeals for talks with the government were rejected over the weekend. The strikes will hit every sector of the government, including state-run banks, energy and telecom companies and the civil service, but will not include the railways.

The unions say they are protesting against rising prices, privatisation of state-run companies and the widespread violation of workers’ rights. “The policies of liberalisation over the past 20 years have made workers poorer in real terms and led to extreme disparities of wealth,” said Tapan Sen, general secretary of the Centre of Indian Trade Unions. “The workers are creating all the profit but are treated like beasts. There is a resentment and anger churning at the ground level that has created the atmosphere for these strikes.”

The display of unity among the unions – whose affiliations stretch across the political spectrum – reflects their desire to regain the power they held during the years of militant labour activity in the 1970s and 1980s. “The traditional trade unions in this country came out of the manufacturing sector,” said Bibek Debroy, an economist with the Centre for Policy Research, a New Delhi think tank.

“Their membership is quite old and losing relevance compared with local unions in the services and rural sector. They are looking for a peg to re-establish their identity and influence.” Many question how relevant the unions can be in a country where nine out of 10 workers are in the informal sector, with no job security or possibility of union representation.

“It’s laughable for these unions to say they represent the poor,” said Samir Saran, the vice president of the Observer Research Foundation, another Delhi think tank. “Members of trade unions have formal jobs. They are far better looked after than the majority of workers in this country.

“The reality is they represent a very organised political force from the past that wants to reassert itself.” The strike offers a chance for some of the country’s most oppressed workers to protest very real issues. In a developing state such as Chhattisgarh, for instance, which has seen a huge influx of energy companies, mines and manufacturing plants in recent years, small unions are struggling for the most basic rights.

“Workers here are attacked by thugs or thrown in jail on false charges if they try to set up a union,” said Bansi Sahu, of the Chhattisgarh Engineering Workers Union. “Land is taken from farmers to build a power plant and then the jobs are given to people from other states because the owners don’t want local communities protesting against the low wages and terrible safety conditions.”

In India, desperate levels of poverty often force workers into a grudging acceptance of exploitative labour practices. The one-day stoppage comes at a difficult time for the government, which has been rocked by corruption scandals and has struggled to contain inflation, which was more than 9 per cent for the first 11 months of 2011 and only recently moderated to about 6.5 per cent.

“The danger for the government is not the strike itself, but whether it becomes fashionable,” said Mr Saran. “Like we saw with the anti-corruption movement last year, these agitations can have a spiralling effect. “The unions smell blood. If even one of their demands resonates in one or two of the provinces and gets taken up by opposition parties, then suddenly the government could have a serious problem on its hands.”

BSE-Greenex, the 25th dynamic index on the Bombay Stock Exchange (BSE), is being unveiled.

On Wednesday, BSE-Greenex,  the 25th dynamic index on the Bombay Stock Exchange (BSE), is being unveiled. Besides the BSE, Greenex will be run by gTrade Carbon Ex Ratings Services Private Limited (gTrade;, the structure involving Indian Institute of Management-Ahmedabad researchers, think-tank Observor Research Foundation, and private investors.

by Rohit Bansal, Daily Pioneer
Please find here the link to the original article.
Please find here the entire media package of the launch of g-trade: g-trade media package

Does India Inc need to be told its ‘carbon performance’ based on quantitative, performance-based criteria? “Yes,” is the simple answer. An economy of our size and aspiration needs to green flag by way of an inclusive market-based mechanism. If I may go a step further, large business entities in India need to offer themselves for deeper probing, way beyond mandatory disclosures. A new index is merely a way to harmonise and discipline.

Green ethos is a tool of soft diplomacy. It interests global industries, investors and Governments. That said, moving beyond tokenism, printing an annual report of recycled paper being the cliche, makes real green flagging a pain that those who sit on the BSE100 must bear. I did some checks on whether Greenex is treading on territory already covered by global indices. It is not (links** to the Dow Jones Sustainability Index, the S&P Environment, Social and Governance Index and the FTSE4Good Index are flagged below). Its basis, as per gTrade chairman Samir Saran, a London School of Economics alum, is publicly-disclosed energy and financial data, not subjective parameters. With this, Saran aims to promote sustainable investing in India. His is a multi-pronged approach of increasing investor awareness, advocating progressive regulatory reform, and targeting energy intensive industrial sectors. “gTrade seeks ethical investments in green technologies and follows a first of its kind business model, and aims to launch ethical financial products in the carbon markets,” he says.

With an interest in nine sectors, pharma and biotech, steel, cement and cement products, fertilisers and agri chemicals, textiles, financial services, utilities, machinery, and oil and gas, is gTrade is aiming to compare energy guzzlers within, say, cement or steel, as also inter se with, say, financial services. Here trust evoked by IIM-A may be crucial. Sector-specific proprietary algorithms must sensibly compare energy efficiency performance of various companies/sectors.

gTrade will employ index constituent weight capping.  Index constituent weights will be capped at 6 per cent during dynamic rebalancing, in an effort to increase the diversification within the index and ensure greater compliance with international regulatory and statutory investment guidelines.

Greenex’s nirvana lies in providing a tool for use by “green” retail and institutional investors to track the performance of India’s largest and most liquid, energy efficient stocks. Also, license beyond familiar territory and help in the development of green financial products including mutual funds, ETFs and structured products.

How the “winners” are incentivised might determine the success of green flagging. I include here, how the “losers” are punished. Social media activists must watch this space. You, not just gTrade, drive social expectation. Your questions will keep India Inc mindful of their social contract, in the instant case with green flagging.

Article in “Russia and India Report”: Navigating the trust deficit

by Samir Saran and Jaibal Naduvath
February 17th, 2012

Please find here the original article

At the 17th round of the Indo-Russian Inter-governmental Commission on Trade, Economic, Technological, Scientific and Cultural Cooperation (IRIGC-TEC) held in November last year, the two governments agreed to set up an investment fund with public-private partnership to finance projects in the two countries. Barely a month later, after almost 18 years of negotiations, Russia was formally invited to join the World Trade Organization (WTO), and, has until June of this year to ratify the accession agreement. Beyond reducing tariff barriers and eliminating non-tariff barriers, accession to WTO is also expected to reduce government interference in business, a key pre-condition for free enterprise. Russia’s evolving economy has been witness and victim to continued government interventions.

Nevertheless, given the impending WTO accession, the India-Russia joint investment fund has managed to get its timing right. Current India-Russia bilateral trade, estimated at around USD 9 billion, is admittedly far below its potential. Trade promotion initiatives such as this investment fund, a possible Comprehensive Economic Cooperation Agreement (CECA) with the Russia, Belarus, Kazakhstan Customs Union combined with the business confidence the WTO accession would inspire, is expected to double bilateral trade to USD 20 billion by 2015, an ambitious, though very achievable feat. With a Price to Earning (P/E) ratio of 6, compared to India’s 14, China’s 15 and Brazil’s 8.5, Russia’s market is attractively priced amongst the emerging markets with traditional industries such as oil and gas, metals and minerals remaining hugely undervalued.

Despite warm bilateral ties, and close political engagement and co-operation extending well over 55 years, India-Russia trade has rarely managed to go beyond the legacy confines of defense equipment, space, energy, metals and minerals, and, commodities, even while, ironically, both countries have independently managed to very successfully leverage new vistas of opportunity in economies they stood together against for a better part of the 20th century. Russia-European Union (EU) trade in 2010, for instance, stood at around USD 191 billion, with the bloc accounting for over 47% of Russia’s total trade turnover, representing a three-fold increase in just ten years. On the other hand, India-EU trade has grown to USD 107 billion this year and is expected to double in two years on the back of a Free Trade Agreement (FTA) currently being negotiated. Compared to this, India-Russia bilateral trade of around USD 9 billion today pales in significance even though it represents a quantum leap from about USD 3 billion in 2006-07.

Russia-India two-way trade and investment has rarely ventured beyond government-controlled domains, which are also accompanied with government-backed guarantees of some kind. Russia’s active participation in several military, aerospace and nuclear projects in India and Indian investment in Russia’s energy sector and preferred trade in controlled commodities are part of this broader trend. But, the true test of any meaningful business relationship lies in the unmitigated ability of private enterprise on either side to confidently engage, invest and gain from each other’s economies, outside the security of sovereign assurance, even if notional. This is not so in the case of Indo-Russian trade.

Russia, of course, dominates the Indian defense sector and is comfortable navigating through Indian officialdom, which still retains much of its controlled economy character from the 70s and 80s. However, this may not remain the case for long. Under greater media scrutiny and public glare, the defense relationship will need to become far more efficient in terms of reliability, time lines and price points, else Russian dominance in the sector could be potentially challenged. Further, as the offset policy starts playing out and thereafter as the Indian private sector becomes engaged in defense production and R&D, Russia may no longer be a competitive player in this segment. To really be a beneficiary of India’s transformation over the coming 2 decades, Russia needs to expand its portfolio by diversifying into the arenas of industry and infrastructure in India. In doing so, its ability to confront India’s dynamic and loud democracy, and an increasingly uncompromising civil society will be as severely tested as its ability to navigate the country’s highly regulated business terrain arising from complex land use norms, environment clearances, and fiscal regimes, all of which have shown to evolve over time.

On the other hand, Russia offers India minerals and land, besides a huge market for software, services, value added goods and consumables. The resource sector in Russia, though, continues to be dominated and overwhelmed by its government with significant self-interest. Agriculture and land based activities too would be prone to similar dynamics and one can expect Indian private sector’s trepidations to be strong on investing in either. Apart from large Public Sector Companies and select large Indian Multi National Corporations, it is unlikely that Indian private sector will invest in Russia, despite undervaluation and potential for attractive return. Indian businesses’ traditional risk aversion is demonstrated by flight of capital to low return economies of the Atlantic that have corresponding low risk political ecosystems as well.

When Indian businesses consider making investments in Russia, they still seem daunted by perceptions constructed by imagery of the powerful and manipulative oligarchy, political nepotism and uncertainty, and seemingly poor judicial and legal recourse frameworks. Fears to do business in Russia have been hyped by experiences of companies such as ExxonMobil, Total and Shell in Russian Oil Sector, which were divested of their interests by Russian political class in a manner that was viewed as ad-hoc, if not vindictive. This imagination has often resulted in investments by Indian entrepreneurs being channeled into markets such as UK, EU and US, which are far more taut than Russia in terms of economic opportunity.

Ironically, Russian investors feel the same way towards India, drawing from a regular narrative of chaotic democracy, policy inconsistency, political fickleness, and civil instability with commitment cycles perceived to not exceed the life of the dispensation in power. One of the collaterals of the 2G verdict of the Supreme Court, which saw the revocation of 21 of Sistema Shyam Telecom’s (SSTL) 22 telecommunications licenses, could be the flickering and faint Russian Interest in Indian business opportunity. Russia’s USD 28 billion telecom to tourism conglomerate, Sistema JSFC, operating in India through its subsidiary MTS, had invested USD $2.5 billion over the past three years into the project, in arguably, the largest private sector intervention by a Russian company in India’s new economy to date. Further, Russian state owned Federal Agency for State Property Management acquired a 17.4% stake in SSTL by investing a hefty $600 million just last year. Fortunately, there is a growing business constituency, which views such re-calibrations as an inevitable part of polity evolution, but nonetheless the experience of Sistema, which may see itself as a victim of judicial overreach as some argue, could well define Russia’s appetite for India’s growth story.

Russia’s accession to WTO this summer and the consequent abolishment of tariff and non-tariff barriers will heighten global interest in Russia. Pro-investment initiatives such as the proposed joint public–private investment fund combined with demonstrable political and economic will on both sides should result in heightened interest in private enterprise on both sides to explore and invest in each other. Multi-billion dollar National Minerals Development Corporation – Severstal Joint Venture steel project in Odisha or Indian companies negotiating long-term agreements for supply of diamonds from Russia are positive signs for medium to long term economic engagement between the two countries.

Article in “The Hindu”: Giving BRICS a non-western vision.

by Samir Saran and Vivan Sharan
New Delhi, February 14, 2012

Please find here the link to the original article.

India is all set to host the Fourth BRICS Summit in March this year. The journey from Yekaterinburg to New Delhi has demonstrated that the political will amongst member nations to sustain this contemporary multilateral process is strong. Along the way South Africa has been welcomed into the original “group of four.” Yet, the challenge for BRICS has always been, and continues to be, the articulation of a common vision. After all, the member nations are at different stages of political and socio-economic development. While some have evolved economically and militarily they are yet to succeed in enabling plural governance structures, while others who represent modern democratic societies are being challenged domestically by inequalities and faultlines created by caste, colour, religion and history. The BRICS nations do have a historic opportunity — post the global financial crisis and the recent upheavals in various parts of the world — to create or rebuild a new sustainable and relevant multilateral platform, one that seeks to serve the interests of the emerging world as well as manage the great shift from the west to the east.

Way forward

Indeed, two out of the five economies in BRICS, China and Russia, have already emerged, and are veritable heavyweights in any relevant global political and economic discourse. Why then should BRICS depend on sluggish multilateral channels such as the World Trade Organisation (WTO), or try to imbibe didactic, non-pragmatic western perspectives on issues purely of common interest? It is amusing to be offered solutions to poverty and inequality, bottom of the pyramid health models, low cost housing options, education delivery, energy and water provision, et al by the wise men from organisations and institutions of the Atlantic countries. When was the last time they experienced poverty of this scale, had energy deficiency at this level and suffered from health challenges that are as enormous? The responses to the challenges faced by the developing world reside in solutions that have been fashioned organically.

BRICS could systematically create frameworks offering policy and development options for the emerging and developing world and assume the role of a veritable policy think tank for such nations, very similar to the role played by the Organisation for Economic Co-operation and Development (OECD) in the 20th-century world. Thus BRICS must create its own research and policy secretariat (for want of a better term) for addressing specific issues such as trade and market reforms, urbanisation challenges, regional crises responses, universal healthcare, food security and sustainable development (many of these issues are being discussed year at the BRICS Academic Forum in March).

Non-traditional security

The OECD’s stated mission is to “promote policies that will improve the economic and social well-being of people around the world.” Although the BRICS nations account for a fourth of global GDP and represent over 40 per cent of the total global population, none of them are OECD members as yet; instead what they have is “enhanced engagement” with the OECD. The BRICS nations have already created a viable platform for “enhanced engagement” with each other through the institutionalisation of the annual Leader’s summit, preceded by an Academic Forum of BRICS research institutions and a Financial Forum of development banks (and this year, a newly instituted Economic Research Group will focus on specific economic issues). The dominant discourses within each of the BRICS nations today are centred on non-traditional security, which can be efficiently addressed through collective market based response mechanisms.

Despite intra-BRICS trade volumes rising exponentially over the past decade, there are few instances of actual financial integration within the consortium (aside from the case of Russia and China starting bilateral currency trading last year). A useful first step to enable this would be to institute a code of liberalisation of capital movements across the five countries, as a modern day parallel to the 1961 OECD code with an equivalent mandate. In the current environment of global economic uncertainty, multinational corporations are perhaps the most adaptable and profitable drivers of economic growth. Therefore, at the outset, the creation of favourable policies for multinationals to conduct business across BRICS would be well justified. Moreover, just as the OECD has a comprehensive set of guidelines that set benchmarks for various economic activities, from testing standards for agricultural goods to corporate governance of state owned enterprises, the BRICS nations could create their own guidelines on the best practices and standards within the consortium.

Finally, within the BRICS nations, there are both import and export centric economies. This provides an excellent template for a realistic multilateral negotiating platform where obdurate self serving bargaining positions are natural starting points. The stalled discussions at the Doha Round of the WTO are an example of the difficulties of consensus building. Since the BRICS nations are already addressing a plethora of issues covered by the Doha Round, they are well placed to move ahead of it, and resolve mutual positions and common concerns.

What started as an investment pitch by Goldman Sachs (BRIC) has evolved into a useful multilateral instrument, for the BRICS nations. BRICS must now move on from being a grouping of individual nations, discussing agendas, to becoming a “go-to” institution for setting regional and global agendas. The essence and ethos of such an institution must in turn, flow from the inorganic prism of stability, security and growth for all. Stability from business cycles and financial governance failures, security from traditional and non-traditional threats posed to humans and the environment, and unbiased growth and prosperity are common aspirations for all BRICS nations, and they must be achieved and delivered from within. The Fourth BRICS Academic Forum will attempt to address these imperatives.

Samir Saran is Vice-President and Vivan Sharan an Associate Fellow at the Observer Research Foundation. The foundation is the Indian coordinator for the Fourth BRICS Academic Forum on March 5-6, in New Delhi.

ORF Report “Re-imagining the Indus”

Please find here the link to our comprehensive report on the “Indus”, the associated treaty, the emergent rhetoric and the reality of people whose lives are inseparable from the river and their traditional and contemporary water management practices.

It is perhaps the most comprehensive effort that captures essential narratives and historical evidence from both sides of the border, that is unable to divide the organic and indivisible river basin.

Co-produced with the LUMS, Lahore with the support of the DFID, this research led by ORF scholar Lydia Powell is certain to offer a pragmatic insight on the debate and the way ahead for the two countries and more importantly for the one people of the river Indus.

I had the pleasure of writing one section of this report.

Samir Saran featured in “The National”

India PM under pressure to resign as court withdraws telecoms licences

Eric Randolph, Feb 3, 2012

Please find here the link to the original article.

NEW DELHI // The Supreme Court’s decision to scrap 122 mobile phone licences, which it says were illegally awarded by the telecoms ministry, is another blow to the beleaguered Indian government. In its judgement yesterday, the court ruled that telecoms officials had “virtually gifted away” the licences to preferred companies, costing the public billions of rupees in lost revenue. The verdict places the blame squarely on former telecoms minister Andimuthu Raja, saying he arbitrarily fiddled the application process to favour certain companies, including real estate firms that had no prior experience in the telecoms business, and quickly sold on their allotted spectrum for huge profits. The court criticised the decision in 2001 to “arbitrarily” fix prices at that year’s levels – a decision that cost the exchequer US$36 billion (Dh132.2bn), according to an audit by the Central Bureau of Investigation in 2010.

Mr Raja was arrested and charged with corruption last year along with several officials and corporate executives, and a separate trial will determine whether any bribes were paid to fix the process. A separate petition, seeking to investigate the role of the home minister, P Chidambaram, who was the finance minister at the time, was sent back to a lower court. It has two weeks to take a decision.

The Congress-led government has tried to shift the blame on to the previous National Democratic Alliance (NDA) administration, saying it set the rules for spectrum allocation in 2003. “The policy was initiated by the NDA government,” said Kapil Sibal, the current telecoms minister, at a press conference yesterday. “The prime minister was in no way responsible, nor was the finance minister.” But the opposition says this ignores the charge that the policy was illegally subverted by Mr Raja. It says the government of prime minister Manmohan Singh must have been aware of the fraud going on at the telecoms ministry.

“The entire policy of the government and its implementation has been held to be illegal and completely fraudulent,” Arun Jaitley, the parliamentary leader of the opposition Bharatiya Janata Party, told reporters yesterday. “For the government to say it has not been indicted shows a sense of shamelessness.” There is likely to be political fallout for the government, which has spent the last two years mired in scandals and unable to pass a single major economic reform.

“The opposition will use this verdict to demand the resignation of Chidambaram and the prime minister and it will be almost impossible to pass a single bill in the next session of parliament – perhaps even the budget,” said Samir Saran, the vice-president of the Observer Research Foundation, a New Delhi-based think tank. Much may depend on the results of state elections being held across five states, including Uttar Pradesh, India’s most populous state, which begins polling next week. The results, to be announced on March 6, would give an indication of how much the recent scandals have influenced voters outside the capital. “The government will try to buy time and pin its hopes on a favourable performance in the provinces,” said Mr Saran. “If they get that, they won’t need to be so apologetic. “They will see it as a chance to turn a fresh page, perhaps induct new faces into cabinet and draw a line under all this mess.”

A major reshuffle of the cabinet could even touch the prime minister. Though he is renowned for his personal probity, he has faced mounting criticism for his ineffectual leadership and failure to tackle corruption in his government. “He has lost his credibility with everyone,” said Ashok Malik, a well-known political columnist based in Delhi. “A wiser person would have resigned by now.” Some feel that yesterday’s verdict may at least reassure the international community that there are limits to India’s graft-ridden politics. Over the years, the Supreme Court has consistently shown itself to be a bulwark against the worst excesses of officials.

Subramaniam Swamy, one of the petitioners in the case and leader of the Janata Party, said the verdict went beyond his expectations. “It will have a very good impact for the future – it says that if you commit a crime, you cannot make a fait accompli of it,” he told reporters outside the court. But others fear it only confirms the view that India is plagued by corruption. “India’s reputation as a place of crony capitalists and opaque bureaucracy has been strengthened today,” said Mr Malik. For Anil Bairwal, the director of the Association for Democratic Reform in New Delhi, the test will be how the government responds. “The Supreme Court has consistently passed these types of judgements,” he said. “What has been wis that the politicians – and indeed the entire political class – don’t pay attention.”

Column in Russia & India Report: Return of Putin? India hedges bets

Published on February 1st, 2012
by Samir Saran & Jaibal Naduvath
specially for RIR 
Please find here the link to the original article.
The mass protests in Moscow last December have had little resonance in India due to a limited media obsessed with defence and energy aspects of the India-Russia relationship. However, India will be watching closely the agenda of the new team that Putin, if he is elected, puts together as it will impact the trajectory of what could be a crucial partnership of the 21st century, say Samir Saran and Jaibal Naduvath. 

For over six decades, India’s relations with Russia and its predecessor, the erstwhile Soviet Union, have remained very cordial. From the heady heights of being “near allies” during the Cold War era to a brief pause in the 1990s as both countries recalibrated their own identities during a period of dramatic political transformation in each country, the Russia-India relations have endured dramatic shifts in global politics. Over the past 20 years though, there has been a pragmatic remoulding of the content of this engagement alongside an assured continuity on crucial areas of traditional cooperation like the defence sector. The non-continuance of the Indo-Soviet Peace and Friendship Treaty of 1971, seen by many as India’s security insurance during the cold war years, the subsequent Declaration of Strategic Partnership signed by the two countries in 2000, and renewed co-operation and strategic engagement at multilateral fora such as BRICS, Shanghai Cooperation Organisation (SCO) and the UN reflects diplomatic maturity and political realism in equal measure. However, despite the long-standing bonhomie, close trade ties and multiple cultural and political exchanges, Russia has not managed to emotionally engage the Indian psyche as much as it should have, even though the very mention of Russia evokes feelings of great warmth among most Indians. However, meaningful interest in Russia remains confined to the foreign policy elite, emancipated urban dwellers and business and trade communities with interests in the opportunities that Russia offers. In the larger public discourse Russia continues to be viewed through the prisms of defence and strategic relationship and the ‘energy narrative,’ with media and polity both guilty of selectively amplifying developments that impact these aspects. As a result, the response on the Indian street often tends to be binary and simplistic to what is transpiring in contemporary Russia. Media reportage and public discourse in India on the upcoming presidential elections in Russia is prey to this myopic syndrome. Indeed, Russia accounts for a majority of all Indian military imports and the reliability of such defence sales is vital for India. A stable Russia and more importantly a political dispensation in Kremlin that supports this defence sector engagement is crucial. There is, however, an urgent need to widen the discussions and media narrative on Russia, if there is to be meaningful and contemporary appreciation of this most significant ally in India.

As things stand, very little is known of presidential candidates other than Valdimir Putin, who has visited India several times, and is considered sensitive to this country’s interests. However, there is also a tacit realisation that sweeping political changes globally and reverberations in Russia which culminated in highly publicised street protests in Moscow (albeit modest in size and scale) against allegations of vote rigging in the parliamentary elections have led to a decline in Putin’s standing, rendering him more vulnerable than before. There is also a feeling that Putin losing his aura of invincibility, and the possible devolution and decentralization of power in Kremlin, could actually usher in greater pragmatism into the Russian political ecosystem making it a lot more dynamic and democratic, and, easier for others to empathise with. Despite being challenged by sections of Russian civil society, Putin may not have lost much of his personal brand appeal in India yet, for two reasons. First, very little is known of the opposition within Russia and even less so is available in Indian media. Secondly, dissent, discord, rebellion are all part of the political landscape in India and the leadership is indeed defined by the ability of the leader to resolve and navigate such challenging terrain. India itself has been ruled by coalition governments intermittently for over two decades with arguably, reasonable success. From their own experience, Indians could relate better to Putin if he is able to manage and share political space and carve out a consensus. Putin, slightly vulnerable and in the need for reaching out, makes him more attractive to the Indian people and its enterprises than Putin the steely and authoritarian figure.

The feeling is that under his potential future presidency, Putin may have to cede at least some ground to factions within his United Russia Party. Who the factions are and what their dispositions and agendas would be are unknown. In the coming days, prior to the March elections and certainly, if voted to power, in the period after Putin’s election, the main interest in policy circles in India, would be the sort of ‘arrangement’ Putin may need to put in place to manage dissent and preserve his influence.

Who (all) he devolves power to and how that impacts Russia’s external engagement will be important to India. As a global military power, Russia affords great counterbalance for India vis-à-vis China. If a pro-China faction emerges at the Kremlin, it will have the potential to further fuel China’s own ambitions in Asia and may drive India to develop a deeper partnership with the United States and other Asian powers to offset it. On the other hand, if the new power structure allows greater Russian outreach to the US and the European Union, it would not only balance the rise of China, but also help India and Russia develop a partnership beyond defence sales, elevating their engagement to a wider set of issues including, on managing the global commons.

From an establishment standpoint, India has always accepted organic development of national political systems and hence is unlikely to be either unduly concerned or patronising as long as its core strategic concerns are not jeopardised. Muted media interest and public response to the Moscow street demonstrations, dramatic developments in a system with little tolerance for political dissent, needs to be seen in this light. Also, after having witnessed the upheavals in the West Asia and North Africa (WANA) region, the media coverage of the Occupy Wall Street agitation and the highs and lows of the civil society movement against corruption at home, the larger Indian public is unlikely to be very taken in by the limited protests in Moscow.

The Indian public sphere is unlikely to engage comprehensively with the happenings in the run up to the Russian elections. On the other hand, the Indian establishment will keenly follow political developments in Russia as the importance of the election outcome and its impact on both the Asian strategic architecture and bilateral relations is not lost on them. The two countries have enormous potential for greater strategic convergence and a favourable political dispensation in Moscow could well catapult the India-Russia relationship into one of the defining global partnerships of this century.

Samir Saran is Vice President at the Observer Research Foundation, a leading Indian policy think tank and Jaibal Naduvath is a communications professional in the private sector in India