24 January 2014
“We hope to initiate work soon on a Comprehensive Economic Cooperation Agreement between India and the Customs Union”.
On the eve of the Republic Day the new Indian Ambassador to Moscow His Excellency P.S. Raghavan has this to say in an interview with the Voice of Russia correspondent Natalya Benyukh.
Question: You were in charge of economic cooperation at the Indian Foreign Ministry. What are the current trends and priorities in Indo-Russian relations? In your opinion, what steps should be taken by both sides to significantly promote Indo-Russian trade and economic ties?
Answer: Bilateral relations between our two countries have been close and friendly over the past many decades and span every field of human endeavour. The challenge for us is to ensure that the economic pillar of our bilateral relations strengthens at the same pace as the other pillars, exploiting the new opportunities constantly being provided by the dynamic developments in our economies and global economic trends.
Our bilateral trade in 2012 reached US$ 11 billion. Projections in 2013 show a marginally negative trend, primarily due to fall in Russian exports which have fallen globally in 2013; however, economic indicators are positive again for 2014. Investments are witnessing a healthy trend and have a huge prospect for growth between our two countries in areas such as pharmaceuticals, hydrocarbons, engineering, metallurgy, infrastructure, hi-technology, minerals and other sectors. Last year, we established a new Working Group on priority investments which will give impulse to realization of investment opportunities between our two countries.
In terms of further steps, we are engaged in providing further momentum to the existing mechanisms at the level of the two governments (such as Inter-Governmental Commission and Working Groups) and at the level of businesses (such as CEOs Council, Forum on Trade and Investment). We would also like better flow of information about each other’s business capabilities, achievements and opportunities. In 2014, we are planning to bring a large India Trade Show exhibition to Moscow. Outreach to regions is another priority for expanding economic ties. We hope to initiate work soon on a Comprehensive Economic Cooperation Agreement between India and the Customs Union of Belarus, Kazakhstan and Russia covering trade in goods, services and investments. Hydrocarbon sector remains one of the areas of priority. We are also examining the feasibility of a proposal for direct surface transportation of hydrocarbons from Russia to India.
We are constantly looking for new trade opportunities. To take the latest example, our companies are exploring the possibility of importing coking coal from Russia through the eastern sea route (Vladivostok to Vishakhapatnam) which might prove commercially more viable then our coal imports from some other countries.
Q.: Nuclear energy is one of the trends in the developing Russian-Indian cooperation. However, it’s well-known that there was a complicated situation before the launching of the first power unit at the Kudankulam nuclear power plant. What are the prospects for promoting cooperation between Russia and India in the nuclear energy sphere?
A.: We deeply value our bilateral cooperation in the field of nuclear energy. Nuclear energy is an important component of India’s energy security strategy. I am pleased that Kudankulam Nuclear Power Plant Unit 1 is already delivering power to our grid and Kudankulam Unit 2 is in the final phase of its construction and will be operationalized this year. Indian and Russian companies are at an advanced stage of negotiations for finalizing arrangements for Kudankulam nuclear power plant units 3 and 4, and I am confident that these contracts would be finalized shortly. We have already designated Haripur in West Bengal as another site to Kudankulam for constructing nuclear power plants in cooperation with Russia. As two countries possessing advanced nuclear technology, we are interested in taking forward scientific and technological cooperation in the peaceful uses of nuclear energy. I believe that cooperation in the area of production of nuclear energy between the two countries will continue to grow.
Q.: Military and technical cooperation have dominated bilateral cooperation between Russia and India for decades. Currently, the development of a fifth
generation fighter jet is among the key tasks. However, Indian press (Economic Times) reported quoting an Indian Air Force source that India is dissatisfied over how work is going on in the implementation of the project. What can you say about Indo-Russian military and technical cooperation?
A.: In recent years our defence ties have radically transformed from a buyer-seller relationship to one involving joint research, design, development, and production of advanced defence systems. The BrahMos supersonic missile project represents an early illustration of this fundamental shift. We are extending this collaboration as we have found it to be of considerable mutual benefit. The Fifth Generation Fighter Aircraft project and the Multi-role Transport Aircraft project are more recent examples of the transformation that has taken place. Both these projects are proceeding well and we look forward to advancing them into their next stages of development.
Recently we have inducted the aircraft carrier INS Vikramaditya into the Indian Navy which, I am confident will enhance the capabilities and reach of our Navy significantly. Over the last two years, there have been numerous collaboration projects and we have inducted four naval ships, upgraded Mig 29 aircraft and are producing SU-30MKI aircraft under license. Recently, the India-Russia military exercise INDRA-2013 took place at the Mahajan Firing Range in Rajasthan, India. We are also planning to continue joint military and naval exercises later this year. So, I am confident to say that Indo-Russian military and technical cooperation, which is a dynamic long-term partnership, is on the right track and will continue to grow in the coming years.
Q.: Russia prefers supplying weapons to India under intergovernmental agreements, while at present, India uses this mechanism with the US but not tenders which often involve manipulation. Why shouldn’t India implement this mechanism in military and technical cooperation with Russia?
A.: We already buy defence equipment from Russia under inter-governmental agreements such as the INS Vikramaditya, three frigates or the additional contracts for SU-30MKI aircraft a year back or ongoing FGFA and MTA. All our acquisitions are based on our defence procurement procedures.
I understand there is always competition for defence suppliers to the Indian market, but our defence ties with Russia have grown nonetheless. Russian companies have proved competitive and emerged as valued partners in meeting our defence requirements. Foreign arms manufacturers from several other countries have won some of our defense acquisition tenders over the past few decades, but it would be no exaggeration to say that Russia is our most important defence partner and this will remain the case in the foreseeable future.
Q.: Some time ago, India confirmed its interest in joining the SCO. Russia supports it. What opportunities would SCO open for India?
A.: SCO is an important regional mechanism for cooperation in the areas of economy, regional security, counter-terrorism, energy, transport connectivity, culture etc. India has been associated with the SCO as an observer since 2005. India is keen to play a larger role in the SCO as a full member, once the organization reaches consensus on its expansion process. Russia has voiced support for India’s full membership of the SCO, we really appreciate that.
