Russia–India

5 September 2019

Russia–India

Economic relations between Russia and India have great potential

“In 2018, the volume of trade between the Russian Far East and India amounted to 790 million US dollars. The basis of export is precious stones. Our countries have enormous investment potential, turnover can increase several times over,” Sergey Tyrtsev, First Deputy Minister for the Development of the Russian Far East and Arctic.

“Economic relations are estimated at USD 10 to 11 billion, and there is room for development. Our leaders have been setting the goal of 13 billion,” Shiv Vikram Khemka, Vice Chairman, SUN Group.

“Since 2017, we have been working on the development of Russian-Indian projects in order to achieve the goal of increasing the trade turnover to USD 30 billion by 2030,” Guruprasad Mohapatra, Secretary of the Department for the Development of Industry and Internal Trade, Ministry of Commerce and Industry of the Government of the Republic of India.

Development of the Russian Far East opens up new prospects for Russia–India cooperation

“Yesterday’s bilateral meeting of our leaders opened a new page in relations between Russia and India, shifting focus to the Far East,” Venkatesh Varma Datla Bala, Ambassador Extraordinary and Plenipotentiary of the Republic of India in the Russian Federation.

“The Far East is the most important region for enhancing cooperation not only with our traditional neighbours, but also for expanding the economic partnership with India,” Dmitry Kobylkin, Minister of Natural Resources and Environment of the Russian Federation.

“Russia is diversifying its economic ties with Asia in order to integrate its Eastern regions into the global and Asian markets. Ports are being modernized, passenger and cargo terminals are under construction, new regulations and legislative framework have been introduced. Indian industry must seize this opportunity,” Sandeep Somany, President, Federation of Indian Chambers of Commerce and Industry.

Russian and Indian business are interested in expanding relations

“We are interested in working with Indian companies; for us, India is a very important investment partner. We are ready to work with Indian partners on transit and low depth projects, <...> we are interested in Indian investments in exploration projects in Russia. We could expand our joint activities to other countries as well,” Sergey Gorkov, General Director, Chairman of the Management Board, Rosgeologia.

“We believe in the development of those deposits, on which we signed an agreement of intent with Rosgeologia’s Mr. Gorkov yesterday. We look forward to continued collaboration,” Sunil Kanoria, Vice Chairman of the Board of Directors, SREI Infrastructure Finance Limited.

“Russia is the largest producer of rough diamonds in the world, India is the largest processor. This is a strategic partnership, and it was bound to happen inevitably,” Rajesh Kothari, General Director, M. Suresh Vladivostok.

“We have been working in Russia for 12 years, we manufacture ceramics and abrasive materials for industrial purposes. We supply the markets of Europe and other countries with the products that we manufacture in Russia. This is our outlet,” M. M. Murugappan, Chairman, Carborundum Universal Ltd.

“We are looking at Russia with a lot of interest, in defence and aerospace. We are developing the engine for the battle tank in India, we are supplying bulldozers and dump trucks,” Deepak Hota, CEO, BML.

“By 2030, we plan to import 140 million tons (of coking coal – Ed.). We decided to acquire coking coal mining companies abroad, particularly in Russia. I hope all these deals will be made,” Anil Kumar Jha, Chairman of the Board of Directors, Managing Director, Coal India Limited.

Russian companies increase their presence in the Indian market

“Our company is Russia’s largest private investor in India. Over five years of work, we have become one of the significant players in the Indian venture market,” Vsevolod Rozanov, Managing Partner, Sistema.

“We successfully sell our products in the Asia-Pacific markets. For us, the Indian market is that of the highest interest and priority. Deliveries of psi-coal and anthracite to India are now underway, while the coking coal niche is virtually unoccupied,” Anna Tsivileva, Chairman of the Board of Directors, Kolmar Group.

“India is Russia’s important foreign trade partner in the petrochemical industry. In the composition of Russian exports to India, petrochemical products take up the fourth place. In addition, mutual direct investment and cooperation in high-tech industries have great potential <...> A good example is our joint project with Reliance on the construction of a butyl rubber and halobutyl rubber plant <...> As a result, the Indian site will produce 120,000 tons of finished products, which would allow it to fully substitute its import in India,” Aleksey Kozlov, Member of the Management Board, Managing Director, SIBUR.

PROBLEMS

Indian investors are not confident about projects in the Russian Far East

“There is a steady focus on the development of the Far East. We want to consider the possibility of gaining access to the oil and gas resources of the Far East. But there are certain concerns: if we do not make it through the government channel, how comfortable will the environment be for developing a private project from scratch?” Darshan Hiranandani, Managing Director, Chief Executive Officer, H-Energy Private.

Lack of support for high-tech projects

“We performed the transfer of high tech, we introduced the payment system on the Delhi-Mumbai highway. The question of further replication of this solution is under consideration. Our company creates high-tech jobs. But we faced the lack of interest in our business from banks and development institutions,” Anton Zamkov, General Director, RT-Invest Transport Systems; Director, Digital Transport and Logistics Association.

SOLUTIONS

Improving the conditions for investors

“A bill has been drafted for the second reading in the State Duma, giving the opportunity to grant the right to use subsoil to the only bidder, transforming tenders into electronic format and other tools for improving competitive procedures,” Dmitry Kobylkin, Minister of Natural Resources and Environment of the Russian Federation.

“In recent years, the Far East has created a system of tax incentives with the lowest taxation in the Asia-Pacific region <...> Today, 6 projects worth USD 1.8 billion are being implemented in the Far East with the participation of Indian capital; five of them are being implemented using preferential tax schemes,” Sergey Tyrtsev, First Deputy Minister for the Development of the Russian Far East and Arctic.

Comprehensive mutual support for the projects

“One of our goals is to facilitate the entry of Russian businesses into the Indian markets, and we are ready to support Indian companies in Russia too. Our ability to work as a bank in both countries allows us to support all these projects,” Kirill Tsarev, Vice President, Director of Engineering Customers Department, Sberbank.

“In 2017, we created a special group called Russia+ to coordinate any investments that come from Russia to India, and vice versa. We deal with 47 requests from Russia in 18 sectors; previously we cooperated in 8 or 9 sectors,” Shri Deepak Bagla, Managing Director, Chief Executive Officer, Invest India.

“We expect the launch of the Russia–India innovation bridge, which will help bring the start-ups from Russia and India together. Start-ups will submit their applications, and the winners will work together to transform them into real business opportunities,” Shri Deepak Bagla, Managing Director, Chief Executive Officer, Invest India.

“We are working with Skolkovo, helping Russian companies enter Indian markets. As a start-up platform, we are creating an incubator for 96 companies, and we provide the platform for Russian start-ups who want to take their place in the Indian market,” Rajendra Srivastava, Dean, Indian School of Business.

“We have already discussed the topics of socially significant infrastructure. We talked about cluster thinking, about the exchange of specialists between regions, in medicine, in particular. Without consolidation of shareholders from various regions and industries, without the support of the authorities, this would not have been possible,” Sunil Sachdeva, Co-founder, Medanta.

For more information, visit the Roscongress Foundation’s Information and Analytical System at www.roscongress.org

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