Putin eyes nuclear sales to India

Russian President Vladimir Putin arrives in India on Thursday hoping to move Moscow closer to its long-term Asian partner and to seal lucrative new contracts for nuclear reactors and arms sales.

Putin will meet Indian leaders on Thursday and Friday and be the guest of honour at the official celebrations of India's main national holiday Republic Day -- a reflection of the historically close ties between the two countries.

"We are natural allies," Putin told Indian journalists in an interview published on the Kremlin Web site on Tuesday.

Russian Defence Minister Sergei Ivanov, who arrived in India ahead of Putin, said on Monday he expected a multi-billion dollar deal to build additional nuclear reactors.

Two Russian reactors are already under construction in India, where rapid economic growth is driving a demand for additional supplies of energy.

Ivanov also told reporters Moscow was interested in inviting Indian investment in the Sakhalin-3 oil and gas exploration blocks in the Pacific. Indian Oil Minister Murli Deora responded by saying on Wednesday New Delhi would ask Russia for a stake in the project during Putin's visit.

Russia, however, faces competition from the United States for the lucrative Indian nuclear power and arms markets.

Last month, US President George W. Bush signed legislation effectively ending a US ban on civilian nuclear trade with the country. In 2005, Washington and New Delhi struck a framework agreement to boost ties in the military sector.

But for now India is the second-biggest buyer of Russian weapons after China. Up to 80 per cent of weapons and hardware now in use by New Delhi has been supplied by Moscow, say experts.

Ivanov said Russia would pitch its MiG-35 combat jet in an Indian tender for 126 fighter aircraft. He added Russia was ready to start negotiations about India's participation in developing a fifth generation fighter due to make its first flight no later than 2009.

India and Russia on Wednesday signed a cooperation agreement for future development and manufacture of multipurpose transport aircraft.

India's Defence Minister AK Antony said plans to buy at least 300 Russian T-90 tanks, as well as fighters and military helicopters, were also discussed.

Strategic partnership

After the Cold War alliance between Moscow and New Delhi collapsed together with the Soviet Union, Russia has maintained a "strategic partnership" with India, supporting its Asian ally's quest for a bigger international role.

India reciprocating

"New Delhi is bending over backwards to ensure good ties with Russia," Brahma Chellany, an analyst with the New Delhi-based Centre for Policy Research, told Reuters.

India has observer status in the Shanghai Cooperation Organisation, a regional group uniting Russia, China and four ex-Soviet Central Asian republics.

The Kremlin has also promised to back India's ambitions to become a permanent UN Security Council member if a decision is made to expand the current five-member group which includes the United States, Russia, France, Britain and China.

However, close political ties have so far failed to ignite a trade boom. Annual turnover stands at around $2 billion, which the two sides aim to boost to $10 billion by 2010.

"This is a problem," Chellany said. "Russia and India need to rebuild the trade relationship to maintain a strategic relationship."