Sanctions on countries such as Russia also impacted other countries as well as the global economy, Prime Minister Narendra Modi said on Thursday as he announced a $1 billion line of credit for the less developed but resource rich Russian Far East.
Modi backed Russian President Vladimir Putin’s blueprint for developing the sparsely populated region bordering China, which involves construction of housing facilities, improving connectivity, and the potential of enhancing eco-friendly tourism.
Indian companies had signed 50 agreements worth “billions of dollars" in investments during a visit to the region last month in areas such as energy, health, education, skill development, mining, and timber, the Prime Minister said at the plenary session of the 5th Eastern Economic Forum in Vladivostok.
“For the development of (Russia’s) Far East, India will give a line of credit worth $1 billion," Modi said. This is the first region-specific line of credit that India is extending to any country, he said.
“My government has actively engaged East Asia as part of its ‘Act East’ policy. I am confident that today’s announcement will be a take off point for (India’s) Act Far East (policy). This will also give a new dimension to our economic diplomacy," he said.
Usually, lines of credit extended by one country to another may be linked to some obligation of importing goods, services or technology from the offering country. This helps both countries to benefit from stronger trade and investment ties. India at present aims to promote exports as part of efforts to boost the economic growth rate.
Modi recalled India’s ties with Russia’s Far East in the days of the former Soviet Union and said India was the first country to open a consulate in Vladivostok. The Prime Minister said that Vladivostok was open to Indians even in those days, though there were restrictions on other people of other nations.
“Let us deepen the bond between India and Russia further... India is proud of the achievements of the Indian diaspora. I am sure here in the Russian Far East, too, the Indian diaspora will actively contribute to the region’s progress," Modi said.
Indian officials said that the export of manpower was one of the topics discussed by Modi and Putin on Wednesday during the 20th India-Russia annual summit. “There is an agreement in principle that India is a very attractive source of manpower exports to the Far East. Prime Minister (Modi) raised this and President Putin has supported this. We will work through this issue in terms of how we will facilitate visas, work permit visas, legal facilitation, and joint ventures between Indian and Russian companies in the Far East," foreign secretary Vijay Gokhale said on Wednesday.
Indian and Russian companies are investing reciprocally in the energy and defence sectors, Modi said on Thursday, when asked about the impact of sanctions on Russia by the US and other countries. “The world is debating how much effect sanctions have on countries that are sanctioned and because of those sanctions, on other countries and the overall global economy. There is a big debate on this," he said.
The sanctions imposed by the US on Russia had had no effect on India strengthening cooperation with Moscow in strategic sectors such as energy and defence, Modi said. Indian companies have invested in the Russian oil and gas sector and Russian firms have invested in energy, defence and technology transfer to India.
“(Sanctions) are no hindrance for the two countries," Modi said.