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International relations

Russia seen courting India for investments at Eastern Economic Forum

Modi scheduled to attend for the first time as Moscow pivots to Asia

Indian Prime Minister Narendra Modi, right, is scheduled to join the Eastern Economic Forum for the first time this year.   © Reuters

MOSCOW -- As Russia hosts the fifth Eastern Economic Forum from Wednesday to Friday in Vladivostok, all eyes will be on its relationship with India as Prime Minister Narendra Modi attends the high-level conference for the first time.

Government officials, including Russian President Vladimir Putin, and business heads will attend the conference that will focus on the economic integration of Russia and the Asia-Pacific region. With Modi's attendance, analysts expect to see a further shift in Russian diplomacy toward Asia.

Positioning Vladivostok as a gateway to Asia, Russia has hosted the Eastern Economic Forum annually in the port city on the Sea of Japan since 2015. Moscow's aim is to use the conference to strengthen relations with Asian countries to encourage inward investment as its relations with the U.S. and Europe have soured over the years.

This year's participants include Japanese Prime Minister Shinzo Abe, Malaysian Prime Minister Mahathir Mohamad, and Mongolian President Battulga Khaltmaa. They plan to have one-on-one talks with Putin on the sidelines of the conference to discuss economic projects, as well as explore ways to strengthen bilateral relations and exchange views on the political situation in Asia.

Putin and Chinese President Xi Jinping put up a show of close ties during the 2018 conference which was followed by joint weeklong large military drills mainly in far-eastern Russia. That controversial show of force was seen as a message to keep the U.S. in check.

Xi will not join the conference this year, and attention is now instead focused on Modi. Moscow is believed to be courting stronger ties with India to balance out China's influence in the region.

On Aug. 28, Russian and Indian foreign ministers met in Moscow. After the talks, India's External Affairs Minister Subrahmanyam Jaishankar hinted that the leaders of the two countries may announce new bilateral deals when they meet at this week's conference.

Russia and India have cooperated most prominently in military technologies, but the governments are now discussing potentially expanding into new areas, including Indian investment into Russia's Far East, joint resource development in the Arctic Circle and the export of rice from India to Russia.

Russia's shift toward Asia has been most apparent in trade over the last decade. In 2009, the European Union accounted for half of Russia's trade in value, but the figure fell to 42% in the first half of 2019.

Over the same period, imports and exports with the Asia-Pacific region expanded to 32% from 21%. The Putin administration believes the underdeveloped Russian Far East will benefit economically from stronger ties with booming Asia.

Japan too is keen to expand ties with Russia. Japanese Foreign Minister Taro Kono will be attending this week's conference with Abe. Tokyo wants to seize the opportunity to urge Russia to promote an eight-point plan for bilateral cooperation first mooted by Abe in 2016. The plan calls for promoting industry in the Far East and developing the region into an export hub for the Asia-Pacific region.

Abe also aims to use the upcoming meeting with Putin to speed up long-stalled talks for a peace treaty between the two countries, although he is believed to stand little chance in this regard.

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