New Delhi (AsiaNews/Agencies) – Russian President Vladimir Putin began a two-day visit to India today. He will meet Indian Prime Minister Manmohan Singh and other leaders. In addition to arms and energy contracts, talks between the two sides should open new horizons for cooperation in every field between the two countries.

The two countries had close links during the Cold War and the heyday of the Non-Aligned movement, but with the end of the Soviet regime they lost their lustre and India pursued new ties with the United States and its former enemy China.

Currently, Indo-Russian trade is largely military. When Putin will attend the traditional Republic day celebrations, he’ll see weapons the Soviets sold at favourable prices in the 70s and 80s.

Two-way trade reached US$ 2.76 billion, a 41 per cent growth over the previous year, but the trade balance was largely dominated by Russian exports (US$ 2 billion). Indian exports to Russia actually fell over the past decade to US$ 740 million in 2005-06 from US$ 850 million in 1994-95. This year are projected to account for less than 0.7% of its total exports.

On the eve of the visit, the two countries signed two deals on the production and joint development of aircraft and fighter plane engines.

India is also evaluating an option to buy 126 fighter planes worth more than US$ 9 billion from Russia. Russian engineers meanwhile are building two reactors in India. And Russia’s Defence Minister Sergei Ivanov said that his government was prepared to build additional reactors in India.

India is especially interested in Russian energy supplies. An India-Russia joint-venture to explore for oil in Siberia in the Sakhalin-3 project is in the works. India's US$ 1 billion stake in an existing joint-venture project, Sakhalin 1, represents the country's largest foreign investment anywhere.

But New Delhi also wants easier oil shipments from Russia and the Mideast. In September 2000 Russia, Iran and India signed a trilateral agreement on the development of a north-south corridor through the Caspian Sea and Iran down to India’s north-western coast, but it was never implemented.

Russia has expressed interest in a natural gas pipeline from Iran through Pakistan to India, but the Bush administration has repeatedly expressed reservations about the project.

Expectations are great as much in Russia as in India, but no one so far has offered predictions.

“The two sides will review the whole array of bilateral relations—political, strategic, trade, investment, energy security, space, defence, high technologies, culture,” said Navtej Sarna, spokesman at India's foreign ministry. (PB)