Russia eyes presence in India’s financial markets

Moscow and New Delhi have an opportunity for an “extended presence” in each other’s financial markets, Russian ambassador to India Denis Alipov said in an interview

Shashank Mattoo
Updated22 May 2023, 11:02 PM IST
Russian ambassador to India Denis Alipov
Russian ambassador to India Denis Alipov

New Delhi: The Russian Federation sees the present conditions as an opportunity for Moscow and New Delhi to have “extended presence” in each other’s financial markets, Russian ambassador to India Denis Alipov said in an interview. His remarks assume significance amid the Western sanctions on Russia for invading Ukraine. Alipov also called for the two nations to set up joint ventures in petrochemicals, mining, heavy engineering, metallurgy and railways in the backdrop of the Make in India push. Edited excerpts from emailed interview:

The imbalance in bilateral trade and certain barriers Indian exporters face remain major issues. How do both sides intend to address these challenges?

Russia-India trade has touched $44 billion mostly due to the growing supplies of energy resources, fertilizers and other materials from Russia and so addressing the trade imbalance is a priority issue indeed. Both sides are working towards capitalising on the momentum and diversifying trade ties. It is important to engage the private sector in trade and investments in a big way as we register an unprecedented increase of Russian interest in the Indian market lately. It’s an opportune moment for the Indian businesses to do the same. Last month, we organized three business fora in New Delhi and hosted a 50-members strong FIEO delegation in Russia. Since 2022, there has been an unprecedented surge in the number of business and regional missions exploring new opportunities both ways. We are optimistic about larger Indian exports to Russia in such sectors like engineering, machinery, automobile, pharma, textile and food. It is also an opportune moment for extended presence in financial markets of the both. We see a positive momentum in establishing joint ventures in the petrochemicals, mining, heavy engineering, metallurgy and railways sectors, notably in the framework of Make in India initiative. Among the recent examples is a new transformer steel plant in Maharashtra. We are purposefully committed to make trade flows smooth and seamless by removing trade barriers and liberalizing the customs regime. In this regard, we also focus our dialogue on the improvement of payments and logistics systems as well as an early launch of EEU-India FTA negotiations.

ONGC Videsh has taken a 20% stake in Sakhalin-1 project. Are more Indian companies in talks to pick up stake in Russian oil/gas projects?

The mutual desire to expand investments in the promising Russian and Indian energy markets is evident. Along with the ONGC Videsh participation in the Sakhalin-1 project, OIL, IOC and Bharat PetroResources possess stakes in various Russian projects, including Vankorneft and Taas-Yuriakh. Indian companies are exploring opportunities offered by the Vostok Oil cluster as well as LNG projects on Russia’s Arctic shelf. More options for the Indian partners are there with the recent launch of the Ust-Luga LNG production plant and its gas transportation initiatives. In India, a huge interest is there to expand the Russian presence in petrochemicals as well as exploration and extraction projects.

What role do you see Russia playing in India’s plans for nuclear power plants as it aims to turn net zero?

Russia remains the only country that implements agreements with India in the nuclear power area contributing in a big way to the development of the Indian low carbon energy security. The Kudankulam NPP (nuclear power plant) project is the flagship initiative in the bilateral trade and economic cooperation, which involves the construction of six 1000 MW power units equipped with VVER-1000 light water reactors. Russia is designing the plant, supplying and supervising the installation of equipment and training the personnel. Units 1 and 2 are currently operating at 100% capacity since 2014. The construction of the second stage (units 3-4) and the third stage (units 5-6) is underway. Looking ahead, our agenda includes the construction of a new state-of-the-art VVER-1200 unit under the gen 3+ technology based on water-cooled and water-moderated energy solutions. This technology combines successful experience in NPP operation with cutting-edge safety standards. Dedicated discussion is going on with respect to the cooperation on a low-power nuclear power plant, nuclear fuel cycle, land-based and floating SMRs, nuclear science and medicine, etc. Importantly, we have accumulated considerable experience to be utilized on a new site for Russian-designed reactors in India, and expect relevant decisions to be taken soon.

Russia is designing the plant, supplying and supervising the installation of equipment and training the personnel. Units 1 and 2 are currently operating at 100% capacity since 2014. The construction of the second stage (units 3-4) and the third stage (units 5-6) is underway.

Looking ahead, our agenda includes the construction of a new state-of-the-art VVER-1200 units under the gen 3+ technology based on water cooled and water moderated energy solutions. This technology combines successful experience in NPP operation with cutting-edge safety standards. Dedicated discussion is going on with respect to the cooperation on a low-power nuclear power plant, nuclear fuel cycle, land-based and floating SMRs, nuclear science and medicine, etc. Importantly, we have accumulated considerable experience to be utilized on a new site for the Russian-designed reactors in India, and expect relevant decisions to be taken soon.

India and Russia have enjoyed a strong defence partnership. Some concerns has been voiced that the war in Ukraine and high technology sanctions on Russia will make it harder for both countries to cooperate. Is this a concern for you?

Against the backdrop of how the US goes out of its way to derail Russia-India defence ties one should be more concerned with what it would do to India-US cooperation if it wanted to pressure India. It will be a snap of a finger exercise.

In stark contrast to that, Russia and India have over the decades created deep-rooted trust in each other. One cannot win such confidence overnight, certainly not with the arrogant self-serving attitude the US has been notorious for no matter how deeply one embed itself in value added chains. One has to be politically compliant with the US.

Russia has never bound defence partnership with political demands, and offers the fullest possible transfer of advanced technologies. The licensed production in India of T-90 tanks, Su-30MKI fighters, AK-203 assault rifles as well as other armaments and components fully complies with the requirements of the state programs “Make in India” and “Self-reliant India”. A highly successful supersonic cruise missiles “BrahMos” joint venture is a role model of successful bilateral engagement. Russia and India are committed to implement all agreements including the contract for the supply of advanced S-400 Triumph air defence systems. Recently, we decided to upgrade the 2019 agreement on spare parts joint production focusing on private sector involvement to ensure our partnership to remain robust and reflect on new realities.

As regards the sanctions, don’t buy the narrative of Russia’s high technology dependence in military production on anyone. Russia’s weapons are well known as one of the world’s best and we’ve been self-reliant in their production since the very start.

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First Published:22 May 2023, 11:02 PM IST
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