Yaroslav Tarasyuk, Russian Trade Representative in India. Source: Courtesy Trade Mission of Russian Federation in India
Russia&India report: How do you assess the achievements of the new government of India in its first year? How are relations with Russia developing?
Yaroslav Tarasyuk: “The new government headed by Narendra Modi began implementing an ambitious package of measures and programmes aimed at stimulating economic development of the country. Ongoing measures involve streamlining public administration and improving the business and investment climate in the country.” (India ranks 142 in the World Bank’s Ease of Doing Business Report 2015. The government has set out to improve this rank by 50 spots).
“Under the government’s new major initiative – ‘Make in India’ – aimed at improving the productive capacity of the country, a new “single window” system has been introduced for the coordination of projects. Foreign investors are now able to invest in such important sectors of the Indian economy as the military-industrial complex, railways and insurance. Effective and transparent holding of auctions for the distribution of coalfields and mobile communications frequencies demonstrate the government’s constructive attitude when it comes to working with business. A very important achievement was an unprecedented increase in access to banking services for the poor people and the rural population. Serious measures have been taken to fight against money laundering and corruption.”
“I think that most important during the past year were the results achieved during the Russia-India Summit in December. The leaders of our countries, not only identified the main directions of work for the next decade in a joint “Friendship-Dosti” statement, but also set targets for mutual trade and investments. In addition, agreements reached between companies clearly show how we will achieve this multi-billion dollar growth in trade and investments. These are projects in the nuclear power industry, oil and gas, production of fertilizers, supply of rough diamonds, and what is especially important; cooperation in the manufacturing of products,” Tarasyuk said.
RIR: Is there interest in the ‘Make in India’ program on the part of Russia, in which sectors?
Y.T.: I must say that the ‘Make in India’ initiative is already quite well known in Russia. Companies that come to India always study prospects for the localization of production, understanding full well that the Indian market is huge, but at the same time, also very competitive. Of course, in first place comes localization of production of machinery, equipment, components, and accessories – tractors and bulldozers, railway equipment, agricultural machinery, power and mining equipment, aviation equipment, and medical equipment.
Such projects are considered within the framework of the Joint Working Group on Priority Investment Projects under the leadership of the Russian Deputy Minister of Economic Development, Alexey Likhachev and India’s Deputy Minister of Trade and Industry, Amitabh Kant. The list of approved projects now contains 21 joint ventures. Among them are the production assembly of tractors in India by the Tractor Plants Concern, the creation of a joint venture for the development of helicopters based on the Ka-226T helicopter model, being implemented by Helicopters of Russia OJSC, the creation of a joint venture for the production of transformer steel by Novolipetsk Steel (NLMK) and Indian Rastriya Ispat Nigam Ltd (RINL), and others.
RIR: Analyzing the experience of functioning projects, including a joint venture of SIBUR and Reliance Industries, production assembly of KAMAZ trucks, the project by Lighting Technologies and others, what are the problems that could arise for Russian investors in India?
Y.T.: I think all these projects are completely in line with the ‘Make in India’ programme, and these are also included in the list of Russia-India priority investment projects. The success of projects usually depends on several factors, including an understanding of the market conditions, the availability of finance and other resources, the selection of a reliable partner, the ability to anticipate and overcome problems. Attention must be paid to the need for careful consideration of issues involving labour legislation, taxation, land relations, and intellectual property rights.
RIR: In your opinion, how successful are the operations of Russian banks in India, do they have the capacity to support the necessary investments?
Y.T.: I think the capacity of Russian banks, given their partnership status with Indian banks, is sufficient to support the investment activities of Russian companies in India. Operating in India today are branches of the Sberbank of Russia and VTB, as well as representative offices of Vnesheconombank, Gazprombank and Promsvyazbank. Actively working with Indian partners are the Zenit Bank and the Otkritie Financial Corporation.
RIR: Russia and India have considerable cooperation at the regional level. What regions of Russia and India are most active?
Y.T.: This year, delegations from Stavropol and Astrakhan regions, headed by the governors, delegations of the Altai Territory, Khakassia, the Khanty-Mansi Autonomous Area, headed by vice-governors, and a delegation from the Tomsk Chamber of Commerce, all visited India. At the end of the year the delegation from Vladimir region is expected to visit. Moscow, St. Petersburg and Tatarstan are also actively working with India. Among the most important regional projects recently, I would like to mention the investment project of India's second largest producer of paints, Berger Paints, in the Stavropol region. It's about building a plant to produce 3,000 tons of paint per year with an investment of $5 million.
Read the full interview at Russia&India Report.
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