Diplomatist Magazine Diplomatist October 2019 | Page 8

SPECIAL REPORT
A necessity to develop Far Eastern regions
of Russia makes it search for new partners in
Asia. Russia invites more Indian businesses
to invest in its Far East. The fi rst investments
that came from India were intended to develop
diamond carving and polishing factories
in Vladivostok, where reportedly Indian
employees already work.
Russia very rapidly rose in the World
Bank’s Ease of Doing Business Ranking to 31st
position out of 190 countries. It ‘has created a
competitive investment space in its Far East,
with 18 advanced special economic zones with
one of the lowest tax rates in the Asia-Pacifi c
region.’ Russia’s Far East Investment and
Export Agency provides assistance to foreign
investors.
Russia highly appreciates the pledge of
Prime Minister Narendra Modi that he made
at EEF to provide 1bln USD credit line to help
develop Russian Far East. It seems to be a clear
sign of India’s interest in the region.
For quite a long time Russia enjoyed a
privileged position on India`s arms market. It
is hardly a huge exaggeration to say that India`s
purchases of armaments from Russia were
the main issue of strategic partnership. Today,
India’s arms market is more competitive, and
8 • Extraordinary and Plenipotentiary Diplomatist • Vol 7 • Issue 10 • October 2019, Noida
New Delhi is interested in localization of
production and technology transfer as part of
‘Make in India’ initiative. Russia announced
that it would provide components for its T-90
MS tanks to be assembled in India. Russian
Kalashnikov rifl es will be produced there as
well. Moscow also is interested in cooperation
with India in submarine production.
Russia and India concluded the contract for
the supply of the S-400 Long Range Surface
to Air Missile System, despite the pressure
from the United States. The two countries
announced at the EEF that they would carry
out settlements in national currencies when
concluding arms supply transactions.
As for military cooperation, India and
Russia regularly conduct joint INDRA
exercises, the fi rst exercise of this kind took
place in 2003. This year, for the fi rst time the
contest of international reconnaissance army
teams was held in India as a part of annual
International Army Games.
As in 2018, Indian investments in the
Russian economy amounted to more than 8
bln dollars and were concentrated primarily
in oil and gas and pharmaceutical industries.
However, Indian companies are exploring
other economic niches. Tata Power Co.
Ltd. signed an agreement on fi nancing the
development of Krutogorovsky coalfield
in Kamchatka. Welspun Group, a leading
producer of home textiles, is also interested
in the Russian market. Those are just a few
recent examples.
As for Russia, it is very much interested
in developing cooperation with India
whose economy – world’s third-largest in
purchasing parity terms - is facing a period
of unprecedented opportunity and predicted
annual growth exceeding 7 percent for the
next several years. It will require energy for
its development. In 2018, Russia’s Gazprom
started to sell LNG to India as a part under a
long term deal at a very competitive for local
market price. At the EEF, Russian Novatek and
Indian Petronet LNG signed a memorandum
of understanding. Rosatom plans to develop
cooperation with India to implement new
nuclear plant projects; the corresponding
agreement was signed with the Indian side
in 2018.