India, Russia can share innovations and technologies: Envoy

As India turns 65, this country of 1.2 billion people is seen widely as a rising power and a magnet for foreign investment. The 65th anniversary of independence is also an occasion to reflect on India’s burgeoning partnership with Russia, a time-tested friend and strategic partner. In this exclusive interview with RIR, India’s ambassador to Russia Ajai Malhotra is upbeat about expanding bilateral cooperation in traditional domains like space, defence, nuclear energy and hydrocarbons and emerging areas like IT, biotechnology and nano-technology.

On Aug 15, India celebrates its 65thIndependence Day. What are your thoughts on this special day? What does it mean for the people of India?

 India’s Independence Day is an occasion to pay homage to those who selflessly and courageously fought for India’s freedom. It is a day for every Indian to remember with deep gratitude the brave guardians of India’s frontiers and our citizens who have over the years sacrificed their lives for our safety and security. It is also a time to re-dedicate ourselves to building a modern, vibrant India, and to serving our people and the larger cause of humanity.

Since its independence six and a half decades ago, India has secured a respected place in the community of nations as a country committed to justice, equality, and the rule of law. Indians are proud citizens of the largest, most diverse, and vibrant democracy in the world - a democracy buttressed by a free media, an independent judiciary, an active civil society, and inbuilt mechanisms for course correction and redressal. On our national holiday, it is deeply satisfying to see a country of 1.2 billion people, characterized by vast linguistic, religious, ethnic and cultural diversity, moving ahead so confidently as one country.


Relations between India and Russia are burgeoning. Which areas of bilateral cooperation hold the greatest potential in the next few years?


 The unique India-Russia partnership extends beyond close and regular political interaction at the summit and other levels to deep-seated, long-term cooperation in such key areas as space, defence, nuclear energy, and science & technology. We will continue to promote cooperation in these sectors as a matter of high importance. We will also seek to further expand trade and investment in priority sectors, such as oil & gas, pharmaceuticals and information technology, to better reflect our complementarities in those sectors and the size of our economies. Cooperation would also be enhanced in such fields as biotechnology, nanotechnology, medical sciences, agro-chemicals, and meteorology, for example. We will support initiatives that enhance people-to-people exchanges between our artistes, academics, entrepreneurs, journalists, parliamentarians, youth, and others.

The Indian economy has maintained one of the highest growth rates in the world in recent years. It is the fourth largest world economy in purchasing power parity terms and is set to expand to $2 trillion in 2013-2014. India produced a record 241 million tonnes of foodgrain in 2010-11 and its foreign exchange reserves are at a high of $319 billion. India has emerged as an anchor of global economic stability and is set to maintain 8-9% annual growth trajectory despite an uncertain global economic scenario. This will open up a great many sectors for India-Russia cooperation. We will encourage greater exposure to each other’s latest achievements, so that we are not bound by antiquated mindsets and stereotypes while exploring areas for future cooperation.


Which Indian companies are most prominent in the Russian market today? Could you give an example of effective investment of Indian business in the Russian economy?


 Amongst prominent Indian investments in Russia, ONGC Videsh Ltd has invested close to US$ 2.2 billion in the oil and gas sector in Sakhalin-I and US$ 2.1 billion in “Imperial Energy”. In the banking sector, the Commercial Bank of India Ltd., a joint venture of SBI and Canara Bank, has been established in Moscow, while ICICI Bank Eurasia has opened here as a subsidiary of ICICI Bank. Indian pharma companies, such as Dr. Reddy’s Laboratories, Cadila Pharmaceuticals, Torrent Pharmaceuticals, and Sun Pharmaceuticals, are in the Russian market, with a number of them exploring setting up joint ventures and manufacturing units in Russia as per the “Pharma 2020” strategy of the Russian government. Indian company J.V.Gokul has set up a state-of-the-art joint venture worth US$ 40 million, for processing, packaging and supply of tea. Indian company Carborundum Universal Ltd has acquired a US$ 40 million majority stake in “Volzhsky Abrasive”. India’s cumulative investments in the Russian economy amount to US$ 6.5 billion.

Our partnership in oil and gas has potential beyond the producer-consumer trading paradigm. During the India-Russia Summit held in December 2010, we signed an Intergovernmental Agreement for Enhancement of Cooperation in Oil & Gas, which underscores our natural mutual complementarities. Both countries believe there is vast scope to broaden our engagement in this sector. Separately, ONGC Videsh Ltd and Sistema have signed a Framework Agreement on cooperation in the hydrocarbon sector, under which envisages joint exploration and development of blocks in Russia, India and in third countries.


Long-term programme of Russia-India cooperation in the sphere of science and technology has been going on for more than 20 years. Which aspects of cooperation in science and technology you consider to be most promising? What can India offer Russia in the sphere of innovative technologies, and vice versa?

 The Working Group on Science and Technology under the India-Russia Inter-Governmental Commission on Technical and Economic Cooperation (IRIGC) and the India-Russia Integrated Long Term Programme (ILTP) of Cooperation in Science & Technology, are the main institutional mechanisms for India-Russia S&T cooperation. The working group focuses on cooperation in priority areas of biotechnology, building materials, industrial realisation of technologies, medical research, metrology & standardization, meteorology, oceanology and seismology. The ILTP is the most extensive scientific collaboration programme India has ever entered into. It focuses on cooperative research in basic sciences and on inter-academy exchanges. It facilitates bilateral cooperation between our scientific communities via joint research projects, bilateral workshops/seminars, focused exploratory visits of scientists and of thematic scientific and composite (scientific and industrial) delegations. The ILTP office of our Department of Science & Technology provides fifty fellowships annually to Russian scientists to pursue research in India.

ILTP has set up joint centres of excellence to promote research in fields such as powder metallurgy, vaccine development, supercomputing, biotechnology, biomedicine, gas hydrate studies and earthquake research, to name a few. It has also yielded joint design development of a civilian aircraft, India’s first indigenous polio vaccine manufacturing plant, the Indus I synchrotron, sensitized Indian medical experts to therapy for TB and burn patients, integration of seismic sensor recorders, development of accelerators, laser equipment, high speed x-ray cameras, boron nitride cutting tools, porous silicon luminescent devices, super-plastic materials, cold coating technologies, and so on.

An “Indo-Russian Science and Technology Centre”, with branches in India and Russia, is being set up to facilitate commercialization of the outcome of jointly developed research and of Indian/Russian technologies in each other’s country. While extending the ILTP in December 2010 it was given the added objective of fostering innovation-led technology development with dedicated funding from both sides.

Matching capabilities in India and Russia, we have taken steps to initiate co-funded mega projects in areas such as sustainable energy, particularly solar, civil aviation, nanotechnology, and healthcare, which are capable of making major societal and economic impact. Furthermore, India has proven strengths in IT and biotechnology, whereas Russia is strong in material sciences, silicon production, space and nuclear technologies. We could offer innovative technological solutions to each other in these areas of our respective strength.

What could you say about possible changes in the commodity composition of trade between India and Russia? In particular, how do you assess the role of Russia in meeting India’s demand for liquefied natural gas?

 Diversifying and expanding the commodity basket of India-Russia trade is one of the keys to boosting our trade. At present exports from India to Russia are primarily pharmaceuticals, electrical machinery and equipment, coffee, tea & spices, and mechanical appliances, while from the Russian side it is in the nuclear energy sector, fertilisers, iron & steel and electrical machinery & equipment. There is considerable untapped potential and much work to be done in promoting trade and economic engagement. Our countries are comprehensively engaging under the IRIGC, to diversify our trade basket. Work being done under the IRIGC and the India-Russia Trade and Investment Forum (via a number of Joint Working Groups across sectors, a CEOs Council, a Business Forum, etc) is showing results. Russian companies are making forays in India in the telecom, steel, coal and hydrocarbon sectors. Apart from space and nuclear energy, sectors like information technology, pharmaceuticals and biotechnology, metals and minerals, fertilizers, food processing, construction and engineering services, financial services, telemedicine and hydrocarbon, have good potential. To give an example of our synergy, Russia is the largest source of diamonds and India imports about 60% of the output as it has core expertise in finished and polished diamonds and jewellery. Similarly, a JV, “Mechel Somani Carbon”, has just been set up between Somani Group and Russian firm Mechel to cater from Mechel's mines in Russia to India’s growing coal demand.

Under the Intergovernmental Agreement on Cooperation in Oil & Gas, both parties recognise that the socio-economic development and energy security of our countries is linked to the availability, accessibility and affordability of oil and natural gas. Both sides are engaging at governmental and private levels to cement this partnership. With respect to LNG, we are in constructive talks with our friends to concretize sub-sector specific modalities of cooperation. Apart from this, Gazprom Global LNG Ltd. has recently concluded Framework Sales-Purchase Agreement/MoUs for LNG spot operations with Indian companies Indianoil, Gail, Petronet and GSPC.


Are you planning to involve Russian business in the development of the railway network and oil pipelines in India?

 India is an attractive business and investment destination, given its large middle class, abundant scientific and technical manpower, innovative entrepreneurs, diversified industrial base, and plentiful raw materials. India is one of a few countries where substantial growth is occurring at present and where profits are being made. It has one of the most liberal and transparent FDI policies among emerging economies and many recent studies rate India as one of the world’s most attractive FDI destinations. India also welcomes portfolio investment in company equity by qualified institutional investors.

India is investing in a major way in power, roads, ports, airports, irrigation, and telecommunications, seeking to remove infrastructure bottlenecks. Our next five-year plan, starting in 2013, assigns US $1 trillion for infrastructure development, with half of it likely to come from private funds. Easy entry procedures have created a favourable climate for foreign investment in India. It is timely for Russian business to seriously explore investing in our energy, infrastructure, and other sectors. We would welcome participation by Russian investors and stakeholders in developing India’s infrastructure, including our railway network and oil pipelines.


How do you look at prospects of joint projects and economic integration among BRICS countries?

 The BRICS countries are increasingly becoming the chief drivers of world economic growth. An ambitious Action Plan was sketched out at the BRICS Summit held recently in Sanya, China. Our five countries have joined hands for a peaceful and orderly transformation of the world order to one that better reflects contemporary and emerging global realities. This is relevant not just for political and security governance structures, but also for global financial, monetary and trade systems, which need to be reformed to enable the world to better address economic crises like we witnessed in 2008-09.  We hope through cooperation among BRICS will contribute to an external environment for our countries that complements our task of nation building.

The Sanya Action Plan aims to consolidate our cooperation in areas such as finance, science & technology, statistics, agriculture, health, business, competition policies, culture, sports, clean energy development, education and skill-development, and disaster relief management. We have also agreed to work even more closely to tackle terrorism, extremism and intolerance, besides drug trafficking, piracy and organized crime.

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