Chennai: India and Russia are setting up a $1 billion fund to promote mutual investments in infrastructure and technology projects, commerce and industry minister Nirmala Sitharaman has said.

Both the countries would contribute $500 million to the fund, Sitharaman said while addressing India-Russia Business Forum at the ongoing International Engineering Sourcing Show (IESS) in Chennai on Thursday.

While the Russian funds would be channelled through Russian Direct Investment Fund (RDIF), Indian contribution will be accrued from National Investment and Infrastructure Fund (NIIF).

Sitharaman elaborated upon other measures being taken by Russia and India to scale up their economic engagement and to boost bilateral trade and investment. As part of these initiatives, the India-Russia CEO Forum will hold its meeting this year at a mutually convenient date.

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The forum was constituted in St Petersburg in June 2016. Foreign direct investment (FDI) from Russia is estimated at $1.2 billion till date while Indian investment in Russia is around $4.9 billion.

“There is tremendous potential for enhancing such investments," the minister said, adding that initiatives like Make-in-India would catalyse Russian investment in several Indian sectors including defence production.

“The Make-in-India initiative was launched by the government in order to encourage businesses to manufacture products in the country, creating additional jobs for the local population. This is a major drive to foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure," she said.

India and Russia are engaged in robust cooperation in the energy sector, including collaborations in civil nuclear energy, hydrocarbons and renewable energy.

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