At the BRICS summit in Goa, India, Russia and India said they had finalized a number of energy and defense deals that have been in the works for much of the year. The size and scope of the deals announced pushes Russia’s overall annual investment far past where it has been in previous years, especially recently. According to IntelTrak’s “Quick Facts,” this year has already seen a 23% increase in the value of active transactions compared to last year, which exceeds the already high 20% annual growth seen over each of the previous two years. Most of the increase can be attributed to Russia’s investments in India’s energy and power industries, especially Rosneft’s acquisition of a controlling stake in Essar Oil.
Rosneft’s acquisition of a 49% stake in India’s Essar Oil, providing the energy major access to the company’s 400,000 barrel per day refinery and port complex at Vadinar, is the largest foreign direct investment ever made by a Russian company. Together, Trafigura and United Capital Partners (UCP) also acquired 49% in the Indian energy company. The deal was reportedly structured in a way to minimize the risk of sanctions on Russia, due to existing financial sanctions on Rosneft. The $12.9 billion deal may still face scrutiny, as Essar had been previously informed by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) that Rosneft’s involvement could expose the company to scrutiny. Rosneft and its subsidiaries were sanctioned by the office under the Sectoral Sanctions Identification List.
Three other defense deals were signed between the two sides. The largest was a $4.5 billion agreement to acquire Russia’s new S‑400 Triumf anti-aircraft missile system. Once delivered, India will only be the second country outside Russia to operate the system — after China. Agreements for four stealth frigates and localized production of at least 200 Kamov 226T helicopters were also finalized at the meeting, according to both sides. All this said, these types of large-scale announcements made during heads of state visits (this one coming in the context of a broader BRICS Summit) often do not play out exactly as described.