Russian President Vladimir Putin hosts Indian premier Narendra Modi at Russia’s economic showcase

Russia’s President Vladimir Putin (L) and Prime Minister Narendra Modi look on during the exchange of agreements and joint press statements ceremony during the Indo-Russia Annual Summit at Taj Exotica hotel in Goa on October 15, 2016. Indian Prime Minister Narendra Modi and Russian President Vladimir Putin signed lucative defence and energy pacts following talks aimed at reinvigorating ties between the former Cold-War allies.<br />PRAKASH SINGH / AFP

Russian President Vladimir Putin hosts Indian premier Narendra Modi on Thursday on the sidelines of the Kremlin’s annual economic forum, as Moscow looks to burnish a fragile recovery despite tensions with the West.

Modi and Putin will meet on the third leg of the Indian leader’s four-nation tour of Europe with the pair looking to bolster declining trade between the once key partners.

Modi is the guest of honour at this year’s three-day Saint Petersburg Economic Forum — Russia’s answer to Davos — that Putin will use to push the idea that Russia has turned the page on a brutal recession caused by low oil prices and sanctions over Ukraine.

“The message that you will get from government officials and probably President Putin is that Russia has adjusted to life with sanctions, to life with lower oil prices, and is now on the path to recovery,” analyst Chris Weafer from Macro Advisory told AFP.

For the Kremlin, India represents the sort of major emerging markets it wants to do more business with as it looks to insulate itself against geopolitical shocks with the unpredictable Donald Trump in the White House.

“It is very clear that there will be a very strong statement that Russia is looking to diversify its political relations, is not looking to have one best friend,” Weafer said.

“Rather than praising China or being critical of Europe, they will try to say ‘We are going to be diversified, we are going to be open’.”

– Boosting India trade –
Russia and India enjoyed a 70-year alliance forged during the Cold War, when the Soviet Union was New Delhi’s largest trading partner, diplomatic ally and main arms supplier, providing everything from tanks to aircraft.

But the relationship became unmoored following the collapse of the USSR, as India underwent an economic transformation and increasingly sought to build trade ties with Western nations.

That process has accelerated in recent years as New Delhi has orbited closer to Washington, and Russia has fostered relationships with India’s chief regional rivals Pakistan and China.

Modi and Putin are expected to oversee a number of deals and discuss a framework agreement for Moscow to supply more reactors to a nuclear plant in southern India as the country seeks to reduce its reliance on highly polluting coal.

A revival of two-way trade, which slumped to below $8 billion in 2015 despite an ambitious bilateral target of $30 billion by 2030, will be a key priority during Modi’s visit, after he made visits to Spain and Germany and ahead of a trip to France.

While India will occupy pole position at the forum, other visiting international leaders will include UN Secretary General Antonio Guterres and Austrian Chancellor Christian Kern.

Bosses from US giants Chevron, Exxon and Boeing will be among 144 American firms at the event, the best attendance in years after Washington previously warned business leaders against attending due to political tensions.

While Russia will talk up its recovery, the situation remains precarious and attention will also focus on talk of much-needed reforms to modernise its creaking economy.

Analysts warned that with Putin likely to bid for another term as president at elections next year there are unlikely to be any radical changes.

“The business climate isn’t going to improve and the presence of foreigners in the Russian economy won’t become more free or competitive,” said Andrei Kolesnikov from the Carnegie Center.

“Only those who manage to strike deals with people at the very top will be able to get involved.”