Russia is changing. On the basis of a broad consensus, the choice is for a "liberal, democratic, federal polity". Power and influence are slowly shifting from the old elite (party nomenclature, security services and military brass) to the new elite (oligarchy groups/monopolies, a small growing middle class and liberal intelligentsia). The old elite is still important and presidential power will continue to have a decisive influence.

Under Vladimir Putin there has been a pragmatic definition of Russia's place in the changing world. There is a willingness to scale down the country's needs from those previously defined, with a keener appreciation of the limits of its capabilities. At the same time, Russia is regaining its ability to influence external developments. This it was unable to do in the early 1990s. It is also developing new vectors of power. The export of hydrocarbon resources and capabilities in residual science and technology are gradually emerging as Russia's foreign policy tools.

Among the major powers, Russia has historically shown great sensitivity and understanding of India's national objectives. It has not considered the inevitability of our growth as a threat. The framework for bilateral cooperation for combating international terrorism has been established. The working group on Afghanistan and the two joint coordination groups on terrorism have produced practical results. India and Russia have supported each other on vital issues. India strongly condemned the Moscow theatre hostage takeover by Chechen terrorists. Russia has supported the Indian stand on cross-border terrorism. Only last week, Russia condemned the attack on Jammu's Raghunath temple and has asked Pakistan to dismantle all terrorist camps in the country.

Indo-Russian relations are time tested and multi-faceted. The Declaration on Strategic Partnership lays down broad contours of bilateral relations in the 21st century. Both countries have maintained close dialogue on issues related to strategic stability. Russia has supported our claim for a permanent membership in the UN Security Council. The military-technical pact is long-standing and substantial with cooperation in the vital space and nuclear sectors of mutual benefit. The GSLV launch in April 2001 used Russian cryogenic stage. The MoU on peaceful uses of nuclear energy was signed during Putin's previous trip to India. During his visit to BARC, the first by any g-8 leader in many years, Putin said the Indo-Russian nuclear pact remained one of the prospective areas of bilateral cooperation. The successful work on the Kundankulam Nuclear Power Plant is an example of this mutually beneficial arrangement.

One of the most significant developments was the agreement, signed on February 10, 2001, resulting in the stake of ONGC Videsh Ltd in the development of Sakhalin-I. The investment of $1.7 billion (Rs 8,000 crore) is the largest Indian investment abroad. The oil security loan from this project in the first six years will be roughly one-sixth of India's domestic production.

Our political relations have matured. The future tasks are to maintain momentum and facilitate a corresponding economic relationship. Currently, there is a growing mismatch despite agreements like Sakhalin-I. This contradicts the requirements of both India and Russia. Neither does it appeal to the new elites of Russia nor to corporate India. On present course, the declaration will lose its meaning if economic content is lacking. We need to take measures to change the situation. These could include the establishment of an Indo-Russian economic forum of businessmen to facilitate high level private-sector contacts and a mechanism to underwrite risks to fill the void after the debt repayment route becomes a trickle after 2005. In any case, debt repayment has not helped our trade. The Russians should use the balance for investment in India. It will yield handsome dividends. Other measures could be more emphasis on tourism, films, science and technology and a formalised energy cooperation through an energy security dialogue with the objective of concluding a long-term energy charter treaty which could even be multilateralised at a later stage. We could establish an Indo-Russian centre for energy studies and cooperation.

The unique strength of the Indo-Russian relation is that there is a national consensus in both countries on a strong and stable relationship. Annual summits stipulated in the declaration have become a reality. Putin's visit to India next week will be the third summit between the two countries in 26 months. Hopefully, in addition to the pending issues of defence cooperation it will also address the economic content of our bilateral relations. There is a new reality in India and Russia. Both need to keep in step.

The author is a former Indian ambassador to Russia.