Key conclusions
Wide-ranging prospects for cooperation between Russia and India
“Today, the Russian Far East is actively canvassing Indian investments. The priority sectors are machine-building, oil and gas, fisheries, agriculture, metals and mining, diamonds, timber, transportation, logistics and tourism. All these areas are of great interest to India,” said Sushma Swaraj, Minister of External Affairs of the Republic of India.
“India is an advanced country in the field of digital technologies. We discovered we had two identical projects in digital railway. Therefore, we believe this area holds great promise,” said Alexander Misharin, First Vice President, Russian Railways.
Joint Russian-Indian ventures on the rise
“We’ve made serious mutual investments in each other’s country. We invested $5.5 bln in the Russian oil and gas sector. Russia set a record in making the largest foreign direct investment in India when Rosneft shelled out $12.9 bln to purchase Essar Oil.” Sushma Swaraj noted.
“A joint venture was set up between Royal Trans Holding and Jindal Limited. Its primary task is to localize the manufacture of railway and railtank cars and organize production of mining equipment on Indian soil. We managed to structure such a deal with the support of our EXIAR export agency. We hope Russian engineers will start assembling railcars in the State of Gujarat by next year,” said Sergei Cheryomin, Minister and Head of the Moscow City Government’s Department for Foreign Economic Activity and International Relations and Chairman of the Board of Business Council for Cooperation with India.
Challenges
Forex market volatility leads to major financial losses
“At present, practically all of our contracts are denominated in US dollars and companies lose huge amounts of money on cross-currency transactions and forex hedging, particularly under conditions of high forex volatility,” said Sergei Cheryomin.
More mutual investments needed
“I think many of our Russian friends, Russian Railways included, have already taken the first steps and quite successful first steps. Our political relationship is very strong and now the time is ripe to expand economic ties,” said Shiv Vikram Khemka, Vice Chairman of SUN Group.
“If we look at the amount of foreign direct investments from India, then figures actually could have been better. We note that our country has seen a total increase of $284 bln since 2010. Foreign investments from India accounted for less than 1%. This shows that we still need to consider opportunities for building new and more efficient mechanisms of interaction,” said Alexander Ivlev, EY’s Country Managing Partner for Russia.
Far Eastern ports’ deficient capacities
“Steam coal deliveries to India are unfeasible due to rather expensive freight costs <…> What we have in Russia now is not sufficient. Just a total of two ports on the Far East that are able to load such vessels,” said Anna Tsivileva, Chairman of the Management Board, Kolmar Sales and Logistics (KSL AG).
“We believe the main flow of goods to India will indeed go through the Far East. <…> Now the ports’ capacities very often leave much to be desired,” noted Borisbiy Zhangurazov, Senior Director for Foreign Projects, Summa Group.
Solutions
Information support for business and cultivation of bilateral ties
“Certainly, we believe information support is among the priorities for this purpose. This is not the website alone. We regularly publish the ‘Russia – India’ magazine. <…> The Business Council has recently acted as a co-founder of the ‘Great Asia’ TV new channel, which will feature materials on our cooperation with India in particular. These will be news feeds, political events and coverage of India's culture and national traditions,” said Sergei Cheryomin.
BRICS bank partaking in investment cooperation between Russia and India
“The need to expedite transition to settlements in national currencies as much as possible is among messages that we always communicated to our leaders. I am glad that the setup of relevant funds was announced as one of the top priorities just recently, at the BRICS leaders’ summit session the day before yesterday. I hope our banks will pay more attention to this aspect,” Sergei Cheryomin noted.
“A new idea I would like to suggest is to basically think about creating an Indian-Russian rewards assessor. <…> This is one idea, which we can do. However, what we need to do is that there should be some kind of leveraging from a financing perspective. <…> The BRICS Bank have been set up. We should also look at the BRICS Bank to come in and finance such projects,” said Pankaj Patel, President, Federation of Indian Chambers of Commerce and Industry.
Simplifying the pharmaceuticals registration process
“What we need is a more predictable and stable policy, a mutual recognition for product approvals. <…> We need to really streamline, create some kind of a mutual recognition system through which we can actually attract investments in India and if India is capable to supply pharmaceuticals to the world, why not to Russia,” Pankaj Patel added.