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World News

Russia supports India U.N. seat quest, seals deals

NEW DELHI (Reuters) - Russian President Dmitry Medvedev clinched agreements on Tuesday with Cold War-era ally India to deepen nuclear energy cooperation and develop a supersonic fighter to rival a U.S. stealth jet.

Russia's President Dmitry Medvedev (L) shakes hands with Indian Prime Minister Manmohan Singh after a signing of agreements ceremony in New Delhi December 21, 2010. REUTERS/B Mathur

Medvedev also threw his weight behind New Delhi’s bid to secure a permanent seat on an expanded U.N. Security Council, following similar calls from Washington and Paris.

Leaders from Britain, the United States, France and China -- along with Russia, the permanent members of the U.N. Security Council -- have all visited India in the last six months, securing contracts worth a total of around $50 billion.

India, the second fastest-growing major economy in the world after China, is one of the top arms importers and plans to spend tens of billions of dollars on defence in the next few years to upgrade its ageing Soviet-era arsenal.

Russia and India signed a long-awaited contract to jointly develop a supersonic fifth generation fighter aircraft, invisible to radar like the U.S. F-22 Raptor stealth fighter. They also clinched a deal to expand capacity at a Russian-built nuclear power plant in south India.

India’s growing ties with the United States, underscored by a landmark civil nuclear deal, has made Russia ill at ease.

Russia has been India’s close economic and political partner since Soviet days, and monopolised India’s defence market for decades, but New Delhi wants to reduce its reliance on one country to reflect its growing clout on the world stage.

LUCRATIVE MARKET

World leaders, accompanied by top executives, are hungry to secure a slice of India’s economy, expected to grow at near-double digit rates for the next decade, making it one of the five largest economies in the world by 2020.

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India says a seat on the Security Council would reflect the G20 nation’s importance as its $1.3 trillion economy helps spur global growth and its government exerts more and more influence over issues from Doha trade to climate talks.

“The Russian Federation supports India as a deserving and strong candidate for a permanent seat in an expanded U.N. Security Council,” a joint Russian-Indian statement said.

But reform of the Council could take a decade to realise.

“The world considers India’s rise as something that doesn’t threaten them, unlike the apprehension surrounding China’s rise, and I think that’s a big factor in the increased global interest in India,” Siddharth Varadarajan, Strategic Affairs Editor at the Hindu newspaper, told Reuters.

No details were given as to the size of the potential aircraft deal, but both countries have in the past talked about producing 250-300 fighters over 10 years, unofficially said to be worth around $35 billion.

U.S. and European companies are lobbying hard to win contracts for new fighter jets in one of few large new defence contract markets.

Russia also sees India as a counterweight to China and a potential ally in Afghanistan.

Medvedev, accompanied by a large delegation of business leaders, met Prime Minister Manmohan Singh and ruling Congress party chief Sonia Gandhi. On Wednesday, he will visit the Taj Mahal in Agra and India’s financial capital Mumbai.

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“It is well known that we want to diversify our basket of suppliers for our strategic areas. We will always have close ties with Russia, but they are no longer the only game in town,” said a top Indian government official, who declined to be identified.

COMPETING WITH CHINA

India is increasingly competing with China for global resources, from Africa to Latin America.

India and Russia agreed to open talks on building the third and fourth reactors for a nuclear power plant in India’s southern state of Tamil Nadu. Russia has built the first two reactors.

The West is increasingly dependent on India and China to power their moribund economies and with $50 billion expected to be spent by India on defence in coming years and $150 billion in the nuclear energy sector, they will not want to lose out.

Russia is also keen to continue supplying nuclear technology and expertise to energy-hungry India as it plans to add 63,000 MW of nuclear power by 2032 to support its economic growth.

“Energy is one area where Russia will be the most important partner for India both in terms of conventional and non conventional energy.... Russians are one of our main suppliers of nuclear power plants,” said Lalit Mansingh, former Indian foreign secretary.

Tuesday’s statement said the two sides had also signed a deal for Russia to supply missiles to the Indian army. No details were given on the size of the deal.

Behind the rhetoric of expanding ties with its fellow BRIC economy -- the term used to group emerging powers Brazil, Russia, India and China -- bilateral trade is eclipsed by Russia’s booming ties with the European Union and China.

The Kremlin said trade with India would total $10 billion this year, while statistics show Russia’s trade with the European Union stood at $246 billion in the first 10 months of 2010, and trade with China was $47.5 billion in the same period.

India and Russia agreed to boost annual bilateral trade to $20 billion by 2015.

Medvedev’s stop in Mumbai includes a visit to the Hindi-language movie industry Bollywood.

“(In Russia there is a) 24/7 broadcast of Indian movies. I think that exists only in India and Russia,” Medvedev told a joint news conference with Prime Minister Singh.

Additional reporting Krittivas Mukherjee and Henry Foy; Writing by Paul de Bendern; Editing by Ron Popeski

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