Looking to deepen economic and trade ties, India and Russia today agreed to jointly explore for oil and gas, build petrochem plants, lay pipelines and cooperate in infrastructure development and smart cities to treble bilateral trade to USD 30 billion by 2025.
Russian President Vladimir Putin and Prime Minister Narendra Modi envisage broader collaboration between hydrocarbon companies in oil and gas exploration and production as well as in LNG projects and supplies.
“It is expected that Indian companies will strongly participate in projects related to new oil and gas fields in the territory of the Russian Federation. The sides will study the possibilities of building a hydrocarbon pipeline system, connecting the Russian Federation with India.
“They will also examine avenues for participation in petrochemical projects in each other’s country and in third countries,” a joint statement said.
The leaders have encouraged Indian and Russian companies to pursue greater participation in each other’s power generation projects, as also in supply of equipment, technology for enhanced oil recoveries and extraction of coal, including coking coal.
Recognising the enormous untapped potential in bilateral trade, investment and economic cooperation, the two leaders encouraged businesses to explore opportunities arising from increasing national focus on infrastructure development and expanding the manufacturing sector.
It is expected that Russian companies will utilize the opportunities in a wide range of Indian sectors and will ‘Make in India’, it said.
The two sides agreed to step up efforts for enhancing bilateral trade in goods and services and set a target of USD 30 billion by 2025, it said adding “it is expected that the level of mutual investments by then will be over USD 15 billion each way.”
It also said that an emphasis will be laid on promoting Russian investments in India in major infrastructure projects like DMIC, smart cities and freight corridors, telecom, power and roads.
“In Russia, Indian participation in Industrial Parks and technology platforms, in sectors like pharmaceuticals, fertilizers, coal and energy will be encouraged,” it said, adding that the two sides would encourage specialized investment funds to invest in these sectors and in the joint manufacturing of high technology products.
“In this context, they welcome the initiative of a direct investment fund of USD 2 billion between Rosnano and suitable Indian investment partners for implementation of high-tech projects. They will protect the legitimate interests of investing companies,” it added.
In particular, it said, both the sides will enter into discussions to renegotiate the existing bilateral agreement for protection and promotion of investments, initially agreed on 23 December 1994, to provide for the protection of foreign investments in each others’ territory.
The two leaders will encourage payments in national currencies for bilateral trade.
“The Working Group established for this purpose will make recommendations on eliminating the existing barriers and stimulating transactions in national currencies,” the joint statement said.
The leaders agreed that the initiative launched by India and the Eurasian Economic Commission for a Joint Study Group (JSG) to explore the feasibility of a comprehensive economic cooperation agreement covering trade in goods, services, investment cooperation, movement of natural persons and mutual recognition of standards, is of great importance for bilateral economic cooperation.
“The Russian side will support the productive work of the JSG so that this Group completes its study within an optimal timeframe,” it said adding “the leaders noted that the International North-South Transport Corridor can vastly improve the efficiency of bilateral trade by significantly reducing transit time and freight costs”.
India and Russia would work together to conclude the necessary multilateral arrangements and outreach to step up the use of this corridor at the earliest.
The leaders also noted that the governments of the two countries and their industry representatives should join hands to disseminate information about business opportunities in each other’s countries.
“The sides also agreed on mutual trade facilitation measures, particularly with regards to simplified customs procedures. In this context, they agreed to finalize shortly a protocol on a “Green Corridor project,” it said.
Both the leaders invited companies to realize the substantial opportunities in engineering, pharmaceuticals, information and communication technology, chemicals, fertilizers, metallurgy, agro and animal products and transport.
Further they agreed to encourage linkages between other regions and cities of the two countries with a view to enhance trade and investment, tourism, cultural and people-to-people contacts.
“The leaders expressed confidence that a web of linkages between these and other regions and cities will bring substantial benefits to these regions and cities and bolster India-Russia partnership further,” it added.
Noting the synergies between national efforts to develop a knowledge-economy powered by technology and innovation, India and Russia will increase collaboration in joint design, development, manufacturing and marketing of technology-driven products and scientific interaction between the countries.
HIGHLIGHTS
(Reuters) Prime Minister Narendra Modi and Russian President Vladimir Putin got straight down to talks on Thursday on boosting nuclear and defence cooperation at a summit aimed at reviving an old friendship that has faded over the years.
Putin’s one-day visit to India, at which a raft of agreements were signed, comes at a time when Russia is at odds with the West over Ukraine, and its economy is stalling as oil prices tumble to their lowest in five years.
Here are some of the key announcements:
ENERGY
* Russia’s state-owned Rosatom will supply 12 nuclear energy reactors to India over 20 years, under an agreement aimed at boosting nuclear energy ties between the two countries.
* India’s Essar Group signed a deal with Russian oil producer Rosneft to import oil.
* Russian bank VTB will open a $1 billion credit line to Essar Group, chief executive Andrei Kostin said.
* The Russian Direct Investment Fund and India’s IDFC agreed to invest up to $1 billion in Indian infrastructure projects including in ports, toll roads and hydropower.
* India’s Tata Power signed a pact with the Russian Direct Investment Fund to increase energy investment between the two countries.
DEFENCE
* Russia, which is India’s top defence supplier, offered to manufacture the Ka-226T – an advanced multi-role helicopter – in India.
* The two countries agreed to produce 400 of the helicopters a year in India, the Russian deputy Prime Minister said.
* The helicoper, which could be used for both military and civilian use, could also be exported from India, Modi said.
* India has proposed that Russia also manufacture spares and components for its defence equipment in India, Modi said.
MINING
* Russia’s state-controlled diamond monopoly Alrosa will increase direct deliveries of the gemstones to India.
* Modi said he wanted Alrosa to have more direct long-term partners in India, and that special notified zones would boost India-Russia ties and the diamond industry.
* India’s top iron ore miner NMDC signed a memorandum of understanding with Akron to buy a stake in a potash mine in Russia.
Russian, Indian funds to invest $1 billion in infrastructure
(Reuters) The Russian Direct Investment Fund will team up with an Indian partner to invest $1 billion in infrastructure and hydroelectric projects in Asia’s third-largest economy, the head of the Russian state fund told Reuters on Wednesday.
The RDIF and India’s IDFC, a leading infrastructure investor, will each commit $500 million to projects under a deal to be signed on Thursday during Russian President Vladimir Putin’s visit to India.
Prime Minister Narendra Modi wants to overcome India’s chronic power shortages, and the country has vast untapped hydroelectric potential in its northern Himalayan belt.
RDIF head Kirill Dmitriev told Reuters the investments would back projects involving a large Russian hydro-power company but he declined to name the company.
The only large Russian player in this area is state-controlled Rushydro. Rushydro’s spokeswoman Yelena Vishnyakova could not immediately be reached by for comment.
IDFC, which is 16 percent state owned, confirmed it would sign a partnership with RDIF but declined to comment on the details.
The Russian fund was set up in 2011 with $10 billion in state funds. It can back investments as long as its partners match it at least dollar for dollar. Dmitriev said he expected to commit funds to the Indian projects next year.
The RDIF has so far invested $1.3 billion of its own money along with $6 billion by outside investors, mainly sovereign wealth funds from the Middle East and Asia.
Dmitriev said the RDIF had managed to turn profits on investments in a Russian telecoms company and the Moscow stock exchange despite Western sanctions, a slowing economy and sliding oil prices.