Wen Jiabao's three-day visit to Japan starting on April 11, 2007 was the first visit by a Chinese Premier in seven years. It has been hailed as an 'ice-melting' visit, distinguishing it from the Japanese Prime Minister Shinzo Abe's 'ice-breaking' visit to China in October 2006. Though the visit did not bring about any fundamental change in Sino-Japanese relations, it did strike a new chord by enabling the relationship to be viewed from a strategic and long-term perspective. For the first time, a visit did not focus squarely on the history issue. Rather its aim was to flesh out the contents of the strategically and mutually beneficial relationship that was agreed upon by the two sides in the October 2006 meeting.

The history issue had overshadowed Sino-Japanese relations in the last few decades. While China had relegated its historical animosities with most countries to the backburner and instead gave preference to economics over politics, with Japan it has tended to consider history as the key issue. But this visit for the first time downgraded the history factor and emphasised upon economic, energy, and environmental issues. In his speech to the Japanese Diet, the first by a high-level Chinese dignitary in 22 years, Wen Jiabao briefly touched upon the history issue and said, "We believe that we need to take history as a mirror to guide the growth of our ties in the future. By stressing the importance of drawing lessons from history, we do not mean to perpetuate hatred. Rather we want to secure a better future for our relations." His speech was particularly encouraging as there was no mention of the Yasukuni Shrine. Some media reports suggested that this change in China's foreign policy approach was cosmetic and primarily driven by the forthcoming Olympic Games scheduled to be held in Beijing in 2008. Though the history factor would continue to hold considerable importance in Sino-Japanese relations, the visit does indicate China's forward looking and pragmatic foreign policy approach.

This pragmatism was visible in the five principles that Wen laid out in his Diet speech to build lasting Sino-Japanese relations. The first of these five principles was the need to increase mutual trust and honour commitments. In this context, Wen mentioned the Taiwan issue and sought Japan's co-operation and prudence on China's core national issue. The second principle related to seeking common ground while shelving differences and upholding the larger interests of the two countries. In this regard, Wen mentioned the issue of the East China Sea dispute, to tackle which the two countries should follow the principle of shelving differences and seek joint development so as to make it a Sea of peace, friendship and co-operation. Thirdly, he identified the promotion of common development based on equality and mutual benefit. Wen mentioned that economic development of both countries presents opportunities rather than posing threats to the other. The visit, in fact, resulted in the upgradation of bilateral economic co-operation by launching China-Japan high-level economic dialogue mechanisms. The two countries agreed to co-operate in energy, environmental protection, banking, new and high technology, information and communication and protection of intellectual property rights. Fourthly, Wen proposed the strengthening of exchanges with an eye on the future, including both mutual exchanges and mutual visits. He highlighted the fact that over 4.8 million mutual visits were made in 2006. Fifthly, he postulated close consultation to respond to challenges. Both countries agreed to maintain close co-ordination and uphold peace and stability in Northeast Asia and promote East Asia regional co-operation.

The basic content of the strategically and mutually beneficial relationship was further clearly outlined in the Japan-China Joint Press Statement signed on April 11. The eight-point Joint Statement emphasised on three broad issues - mutual exchanges, mutual co-operation, and regional and international co-operation. Mutual exchanges included the important area of defence, and the two sides decided to establish a communication mechanism between the two defence authorities in order to prevent the occurrence of unforeseen incidents at sea. Mutual co-operation included co-operation in energy and environmental protection and for the first time the two sides decided upon holding the First Energy Ministerial Policy Dialogue and the announcement of a joint statement concerning the enhancement of energy co-operation. On regional and international co-operation, both sides agreed to support United Nations reforms, co-operate on the Six-Party Talks and, most important of all, they decided to conduct joint development of East China Sea as a provisional framework until the final delimitation based on principles of mutual benefit are settled.

The joint statement however, did not lead to any concrete results on military and strategic issues. Though the proposal for joint handling of the East China Sea dispute was a welcome and significant step forward, it did not settle the row over drilling rights for natural gas deposits. Further, the statement did not spell out China's position on the crucial issue of Japan's Security Council membership and, therefore, the former's opposition to the latter's permanent membership will remain a thorny element in bilateral relations. Japan also remains apprehensive on the issue of Beijing's military build-up and lack of transparency on military spending. For its part, China is concerned about Japan's robust defence policy, deepening US-Japan alliance and growing Tokyo-Canberra military exchanges. More importantly, though the history question did not occupy the centre stage, it is far from resolved. There are significant sections in China who are not supportive of the moderate policies of Hu-Wen towards Japan and hold history to be the key issue between the two sides. In any future solution to the territorial disputes, the history factor is likely to emerge as a key contending area inhibiting improvement in bilateral relations.

Nonetheless, it appears from the Joint Statement that the key achievement of Wen's visit lay in the fact that history no longer occupies the key focus in Sino-Japanese relations. Economics have taken primacy over politics and, as hailed in the statement, stability and common development of the two countries are seen as prerequisites for both to rise peacefully. Further, co-operation on the East China Sea dispute and defence exchanges suggest upgradation of Sino-Japanese relations to the level of trust and mutual co-operation. All these indicate support for Wen Jiabao's exhortation that Sino-Japanese relations must be viewed from a strategic and long-term perspective.

The Ministry of Defence (Finance) organised a day-long seminar on March 24, 2007 on Outsourcing Possibilities in Defence. The seminar brought together a variety of perspectives – of the Services, the Ministry of Defence, industry, academia and think tanks. The March 24 event was a follow-up to the first-of-its-kind International Seminar on Defence Finance and Economics held in November 2006. Its importance lies in the fact that not long ago ‘defence’ was considered a ‘strategic’ affair and thereby excluded from public scrutiny and economic analysis. The Ministry’s efforts to bring greater efficiency through outsourcing is indicative not only of budgetary constraints but also of the fact that defence business could be successfully run by adopting the best private business practices. The wider intention of the seminar was to explore ways for indigenisation and self-reliance in the field of defence production and military technology by means of outsourcing defence activities to efficient and reliable private partners who could offer services in a cost-competitive, time-bound manner and remain trustworthy in the long run. The various perspectives discussed in the seminar are highlighted in the succeeding paragraphs.

From a theoretical perspective, there are four compelling factors - cost minimisation/value maximisation, resource access, superior resource leverage, and risk diversification - that drive an organisation to opt for outsourcing. The outsourcing decision is based on 'core' and 'non-core' activities that determine which activities need to be retained in-house and which are to be purchased from the market. However, in the extremely competitive global market, there exists a very thin demarcation line defining 'core' and 'non-core' activities. Also, the outsourcing decision taken by the authorities of an organisation is based on estimation of economic costs and benefits and on the assumption that transactions are carried out to the optimum ability of the organisation in drawing and enforcing proper contracts - the last being susceptible to ignorance of market-player behaviour, thus becoming the key determining element for the success of any decision.

From the perspective of industry, the Indian private sector is suitably placed to work closely with their defence public sector counterparts. Private industry strongly feels that so far its prowess has not been optimally harnessed for domestic defence requirements, while in the global front it has been successful in providing services to large multinational companies like Boeing, Airbus, Lockheed Martin, etc. While the benefits of defence outsourcing to the private sector is endless and includes import independence, technological self reliance, faster and cheaper supply of logistics, the areas where they can play a meaningful role is virtually exhaustive. However, not so long ago, the private sector’s role in defence was confined merely to providing raw materials, semi-finished products and parts and components to Ordnance Factories and Defence Public Sector Units. But, with the government allowing private participation including foreign direct investment, the private sector has been able to produce high-end defence products, demonstrating its effectiveness in translating its civil prowess into defence business. With the rising profile of Indian private industries on the global scene backed by competitiveness, quality standards and efficiency there is enough confidence among the private enterprises to delve into hardcore development and production of hi-tech defence equipment. To accommodate private industry, in recent years the government has initiated policy measures like for instance the Defence Procurement Policy, 2006 to boost greater private participation. But what is needed is that along with policy measures, there should be a concerted effort to encourage public private partnership (PPP) and greater outsourcing to the private sector. Some of the items that could be easily outsourced to the private sector include land systems, vehicles, engineering equipment, marine systems, aviation systems, arms and ammunitions, UAVs, surveillance systems, IT and communication radars and radio sets. Besides, private industry feels that the existing Defence Supply and Storage Network, vast Defence Estates, Armed Forces Medical Services and Defence Personnel Recruitment could be outsourced to private players for better management, speedy and quality services and for revenue generation. Similarly, the government should address the concern of the private players arising out of the discriminatory benefits enjoyed by the public sector in producing equipment the prototypes of which are developed by private players.

The Indian Army views outsourcing as a form of privatisation wherein some or all of its logistics function is performed by an outside organisation. There is a degree of suspicion on the part of the Army vis-à-vis outsourcing and this suspicion arises out of security of supply and timely availability of required quantity and quality. While feeling the need for greater outsourcing, at the same time it does not want to relinquish control over its dedicated logistics units. However, it identifies three broad areas for possible outsourcing: ‘system support’ related to maintenance and repair of equipment; ‘services’ linked to transportation, medicare and security; ‘contingency and competitive’ related to services and civil contracts, etc. In its proposed methodology of outsourcing, the army divides logistics support into three levels: strategic, operational, and tactical or direct support. On analysing three levels of logistics, the Army does not recommend outsourcing of tactical logistics as it forms the first and second line of support to troops and provides them confidence during operations. The Army feels that due to inhospitable terrain and war-like circumstances, private operators may find it difficult to do business in some cases. So the army suggests categorising all functions into core and non-core functions. While the core functions are to be retained in-house because of their criticality during military missions, the non-core functions, which are non-operational in nature, could be outsourced.

Outsourcing in the Indian Air Force (IAF) goes back to as early as 1940 and the experience so far has been mixed. A number of activities like security of IAF installations, repair, overhaul and upgradation of various weapons systems and equipment and refuelling operations at various IAF bases have been outsourced at varying proportions. Further outsourcing is contingent upon the suppliers' flexibility and willingness to take up additional tasks. The experience that the IAF has gained relates to poor quality of the supplies and the prolonged time for corrective measures which are not to its satisfaction. In case of obsolescence of products, the IAF found that the outsourced agencies find it commercially unviable because of the changing situations with respect to design, development and cost escalation over a long period, resulting in low availability of product upgrades. Besides, a limited vendor base escalates repair costs and greater concentration on high-end products by original equipment manufactures (OEM) creates problems for product upgradations. Similarly, the IAF found lack of accountability among private suppliers.

Based on its experience, the IAF wants to tread the outsourcing path cautiously. It feels that outsourcing creates critical dependencies that do not bode well during crisis situations, since legally private contractors could not be compelled to go to war zones. The core functions of air warfare like self-sufficiency of combat units, operation of combat aircraft and first line maintenance are not to be outsourced. However, the IAF is in the process of drawing up an action plan to pursue outsourcing in the years ahead, and has set an immediate target of fifty per cent, which would be increased depending upon the satisfaction level.

The Indian Navy, by decentralising financial powers, has been able to outsource many activities for the purpose of inducting modern technology and increasing levels of synergy and co-ordination. At present, these areas broadly include: operational requirements like ship refit and overhaul, ship engineering, and engine overhaul; technical support related to maintenance of equipment, building conservancy, IT, and dredging of channels; administrative support for ferry service, etc. The three areas which the Navy wants exclusive control over and out of the ambit of outsourcing are: weapons and sensors; networking and communication; and basic ship design. The Navy contends that these need heavy doses of Research and Development costs or need to be under its control for operational security reasons. It has identified outsourcing and private participation as means of greater indigenisation and self-reliance. Towards this end, it has set up institutional mechanisms, the Directorate of Indigenisation and Local Units at the Command level to encourage Indian Industry to enter into collaborations/partnerships with their foreign counterparts and thus ensure the supply of latest technology to the force.

At present, the Indian Navy faces certain difficulties in its outsourcing efforts. Most DPSUs that cater to the Navy’s requirements of building warships either lack facilities close to naval bases or do not possess adequate capacity to handle the workload. However, in recent years the government has been encouraging private player participation and the result is visible with Larsen and Toubro building a huge shipyard at Hazira. Also, the Navy wants a strong defence industrial base at major naval bases – Mumbai, Visakhapatnam, Kochi, Port Blair and Karwar – as a major prerequisite to serve the outsourced activities of the Navy more efficiently. Another problem facing the Navy is the absence of firm guidelines, leading to uncertainty regarding the procedures to be followed for execution.

While the seminar was successful in bringing to the fore the perspectives of various stakeholders, concerted follow-up action at higher levels is needed to proceed along this path. So far, outsourcing activities of the Armed Forces have been left to the individual Services who perform this important activity on their own in varying proportions depending on their convenience and needs. Among the three Services, the Navy is more outsource-oriented than the others and has institutional mechanisms to promote this. While the Army and Air Force could learn from the Navy’s experiences and practices, there is an urgent need for an overarching mechanism to guide this important aspect in all the three Services. In this regard, the Ministry of Defence could take a cue from its British counterpart in formulating a policy paper on outsourcing. The UK MoD Policy Paper on Defence Acquisition, released in 2001, has clearly laid out principles which, besides promoting Public Private Partnership (PPP) and Private Finance Initiatives (PFI), identify potential areas that could best be served by private parties. Under this policy, only when the PFI has been found to be ‘unworkable, inappropriate or uneconomic’, can the Ministry use its own capital funds. The Ministry has no “dogmatic preference for private over public or vice versa.” This British initiative has not only transferred the Ministry’s risk but has also benefited it from savings in capital investment. The PFI initiative has saved up to ‘forty per cent in forecast costs compared with other (read government initiated) forms of procurement’. A number of contracts awarded to private players, including some in strategic areas, are testimony to both the competency level and trust in handling strategic matters by the private sector. A similar exercise in India will not only benefit the country’s security establishment in terms of savings in time and costs but also help in realising self-sufficiency in ‘defence production and military technology’, the cherished long-term objective of the Government of India.

On February 28, 2007, Finance Minister P. Chidambaram presented the Union Budget for the fiscal Year 2007-08 (April 1, 2007 - March 31, 2008). Out of a total budgeted expenditure of Rs. 6,80,521 crore, Rs. 96,000 crore was earmarked for national Defence, which includes allocations to the three Services - Army, Navy and Air Force - Defence Ordnance Factories, and the Defence Research and Development Organisation. This is besides the allocation of Rs. 16, 695.83 crore for Defence Civil Estimates, including Rs. 14,649 crore for Defence Pensions. Adding Defence Civil Estimates to the Defence budget, the total Indian military budget now stands at Rs. 1,12,695.8 crore. However, by convention, the Civil Estimates are not included in the calculations of the Defence budget in India.

In nominal terms, the Defence budget of Rs. 96,000 crore is an increase of 7.87 per cent over the budget estimates (Rs. 89,000 crore), and 11.63 per cent over the revised budget (Rs. 86,000 crore) for the year 2006-07. There is thus an immediate net loss of Rs. 3,000 crore (3.4 per cent of the original budget) to the Defence establishment, owing to the Services' inability to spend funds meant for capital expenditure during the previous financial year. The Services' inability to spend funds has probably cost them another Rs. 4,000 crore in the new budget, which could have taken the new budget to the figure of Rs. 100,000 crore. In the new budget, revenue expenditure accounts for 56.3 per cent (Rs. 54,078 crore), and capital expenditure accounts for 43.7 per cent (Rs. 41,922 crore) of the total budget. While the revenue budget has declined by 0.58 percentage points, that of capital expenditure has increased by 1.58 percentage points over the budgeted estimates for the previous year. Compared to the revised estimates for 2006-07, in the latest allocations, the share of revenue expenditure has decreased by 3.6 percentage points while that for capital expenditure has gone up by the same percentage points.

The recent trend of declining revenue allocations and rising capital allocations can be traced back to 2004-05, when the capital budget was suddenly increased by nearly one and a half times, while the revenue budget was cut by nearly 14 percentage points. In the revenue side of the budget, pay and allowances, including those of personnel, civilians and reservists account for the second largest expenditure (after Stores which receives Rs. 25,668.22 crore), at Rs. 21,020.81 crore, which is nearly 40 per cent of the revenue budget and 22 per cent of the total Defence budget. When the recommendations of the 6th Pay Commission get implemented, the revenue budget will inflate significantly. The 5th Pay Commission inflated the revenue budget by nearly 16 per cent. A similar situation this time will raise the revenue budget by at least eight to nine thousand crore, because of increases in just Pay and Allowances.

On the capital side, this year's allocations for procurement purposes stands at nearly Rs. 27,000 crore, 3000 crore more than was allotted in the previous year. Though the major portion of the procurement budget will go towards meeting 'committed liabilities', the remainder could be utilised by the Services for a new set of modernisation programmes.

Service wise, the Army has the lead with a budget of Rs. 45,684.51 crore (47.59 per cent of total budget), followed by the Air Force at Rs. 27,021.74 crore (28.15 per cent) and the Navy bringing up the rear at Rs. 17,529.44 crores (18.25 per cent). Compared to the budgeted estimates for 2006-07, the Army's share has gone up by 0.1 percentage point, while those for the Air force and Navy have gone up by 0.2 percentage points each. The allocation for Defence Research and Development has gone up by Rs. 433.49 crore, and it now stands at Rs. 5887.22 crore, representing 6.13 per cent of the total budget. Though the present allocations reinforce the fact that the Indian military is Army-centric, yet, some components of the Army budget - National Cadet Corps (NCC) and Military Farms - need a revision in the budget making process to better reflect their true character and for easy understanding. Similarly, the Coast Guard and Jammu & Kashmir Light Infantry (JAKLI) are also excluded from the defence budget. This is done for the purpose of under-valuation, but it is unnecessary given that information in this regard is easily available in the public domain.

The Defence budget for 2007-08 is only 2.10 per cent of the expected GDP for the coming fiscal year, as against 2.17 per cent in the previous year. In the last four fiscal years since 2004-05, Defence expenditure as a percentage of GDP has been continuously declining. Similarly, Defence expenditure as a percentage of total Central government expenditure has this time around come down to 14.11 per cent from 14.79 per cent in the previous year. In the last four years, there has been a more than two percentage point decline on this front. These declining trends are in contrast to the commitment made by the Prime Minister to push the Defence budget towards the three per cent of GDP mark in the backdrop of strong economic growth. In nominal terms, though the economy is all set to grow by more than 45 per cent between 2004-05 and 2007-08, the Defence budget has actually gone up by only 26 per cent in the same period.

This mismatch between the growth of the economy and that of defence allocations raises the question as to whether it is the government that is not willing to provide sufficient funds to the armed forces, or whether the Armed Forces are unable to utilise allotted funds in a timely manner. A perusal of the Defence Services Estimates (DSE) reveals that the Armed Forces have surrendered nearly Rs, 40,000 crore in the past decade, forgetting the consequences of two important underlying principles of the Fiscal Responsibility and Budget Management Act (FRBM Act): each rupee surrendered from the present budget is one rupee lost in the next budget; and the more that is spent from the present budget, the more will be allotted in the next budget. As the Services' record of spending allotted funds is not displaying any improvement, the Ministry of Finance did not grant more funds, possibly because of the understanding that the surrendered funds could have earned better returns if they had been allocated for other productive purposes. Perhaps, this aspect is the most crucial factor that justifies the mismatch between robust economic growth and a relatively lower growth in the defence budget. In this regard, the demand for higher allocations from GDP or Central Government expenditure has to be compatible with the improved spending habits of the Services, which in turn depends on rational decision-making. At present, most of decisions pertaining to equipment or platforms do not conform to the simple economic principle of competition, leading to compromise on time, cost and quality. As long as these aspects are not taken care of, no amount of increased allocation would be adequate, considering that allotted funds will be used at a sub-optimal level

The recent meeting of the Indo-Russian Business Co-operation Council and the Trade and Investment Forum in New Delhi was significant, in that it took place after the recent summit-level talks between the two countries. This symbolises the fact that both countries assign considerable value to increasing bilateral trade and economic co-operation.

Fresh impetus was provided to the strategic partnership between India and Russia during President Putin's recent visit to India. His visit reinforced the interests of both states in maintaining their traditionally close and friendly relationship. But the question that still remains is, whether a similar impetus was provided to boost trade and economic co-operation between the two countries.

Bilateral trade between Russia and India was severely affected due to the disintegration of the Soviet Union. The break-up of the USSR in 1991 and India's economic liberalisation about the same time resulted in a drastic reduction in bilateral trade and economic co-operation. At present, the two economies display certain interesting similarities. Both economies are resurging and at the same time diversifying. They have achieved significant rates of economic growth over the last few years - seven per cent in the case of India and about 6.9 per cent in the case of Russia. This robust growth provides a strong base for expanding business contacts and promoting new projects.

An analysis of bilateral trade shows that India's main exports to Russia are not growing at a consistent rate over the past few years, while Indian imports from Russia have remained almost static over the last decade and a half. There is a need to address specific areas to ensure greater trade flows and to reach the target set by the two governments of US $10 billion in total trade by 2010.

The greatest hindrance to trade between India and Russia is the lack of trade routes. There is need to optimise the shipping route because, until a viable and shorter route for trade is worked out, higher growth rates in trade of goods will continue to be hampered. The agreement on the new India-Russia Transport corridor may help in reducing transport costs. The present route, which passes through the Suez Canal and enters the Russian port of St. Petersburg via Kotka (Finland) and Rotterdam (Netherlands), is long and time consuming. The new route - Mumbai-Bandar Abbas-Astrakhan - would comprise of sea and land links across India, Iran and Russia and will shorten travel time by as much as ten days. The North-South Corridor thus needs greater attention from both countries.

Despite the interest shown by both sides to increase bilateral flow of goods and services, there are still some trade barriers, non-tariff barriers for instance, that continue to plague bilateral trade. These too need to be identified and addressed, since they hinder market access.

Another issue that needs to be addressed seriously pertains to the remaining funds under the Rupee-Rouble debt agreement. Between 1953 and the collapse of the Soviet Union, bilateral trade was conducted through a specific system of trade and payment called the Rupee trade system based on annual plans. However, after the collapse of the Soviet Union, the Indian and Russian governments renegotiated the entire trading arrangement. After several rounds of discussions, an agreement was reached in 1993, under which rouble credit was denominated in Rupees and a repayment schedule was drawn up. The agreement provided for an annual repayment of about US $1 billion equivalent in Rupee to Russia over a period of 12 years starting from 1994, with smaller amounts for a further period of 33 years. The Rupee debt funds were to be used by the Russian side to import goods and trade related services from India. Since then, bilateral trade has been based on payments in freely convertible currencies. All Russian exports to India follow the new system. But in the last decade, about two-thirds of Indian exports were financed through the renegotiated rupee-debt repayment mechanism.

India and Russia also need to look at other relevant issues including the expansion of inter-banking co-operation and easing of visa regulations for Indian professionals for short as well as longer periods, including business travel. For investment purposes, at present the greatest promise lies in joint collaboration in the area of energy. Russia has the energy potential to satisfy India's growing energy needs. While public sector energy companies from India have already made large investments in Russia, private sector companies too now need to look at investments in downstream petroleum units in Russia in return for a stake in petroleum refineries there.

Despite economic policy changes in both countries, the Indo-Russian economic relationship is still dominated by defence/public sector transactions. The military industrial complex (MIC) still stands at the core of strong Indo-Russian economic linkages. India is further expected to continue importing defence equipment from Russia in the coming years.

Macro-economic stability and growth in the two economies continued mainly because of their intensive expansion of internal consumer and investment demand. Overall, the economic policies of both countries aimed at supporting macroeconomic equilibrium and stimulating growth. Today, Russia's ambition seems to be not just limited to becoming a prime supplier of energy to the world market but to eventually re-emerge as a great economic power using petrodollars. Similarly, today's India has a lot to offer to Russia. Sectors in which India has shown high export growth over the last few years are information and communication technology, professional services such as medical health (specifically dental), engineering, travel and tourism, as well as certain financial services. Russia, on the other hand, has demonstrated expertise in, apart from the energy sector, research and development in scientific and technological sectors, transport services, etc. The two countries could also consider building a strong platform for sharing views on innovation and research and development in the above mentioned areas so as to learn and benefit from each other's competence. Both countries could also roll out new initiatives to boost bilateral economic co-operation.

Russia's Economic Report of December 2006 states that it has been experiencing severe shortages of skilled labour due to demographic decline. This has had an adverse effect on its economic growth. In this context, it could be of mutual interest if professionals from India were to be hired to meet Russian requirements. This idea was discussed during Putin's January 2007 visit as well as during the recent visit of Russia's Minister of Economic Development & Trade. Now Russia is looking for alternatives in the form of expatriate labour from Central Asia and the Caucasus, mainly because of the latter's familiarity with and knowledge of the Russian language. If Indian job seekers were to learn the Russian language, it would boost employment opportunities for them in Russia. Chinese labourers have already started finding a foothold in Russia's Far East, and they might very soon spread to other parts of Russia as well. There is no doubt that Russia will prefer Indians rather than Chinese in this regard.

India and Russia have to exploit their comparative advantages in a globalising world if they wish to expand bilateral trade and deepen economic co-operation. This is imperative to add greater ballast to their strategic partnership in the 21st century.