Russia-India bilateral relations – exclusive interview with Indian Ambassador Ajai Malhotra
Your Excellency Ambassador, we are meeting in early 2013 ahead of India’s Republic Day. Please, accept our heartiest congratulations upon your national holiday from the Voice of Russia, which is doing its best to widely cover Russian-Indian cooperation.
Ambassador: Thank you so much for your greetings Natasha! Also, thank you for your efforts in promoting friendship and goodwill between India and Russia.
Q.: One of the most important events in bilateral relation in last year was the visit to India of Russian President Vladimir Putin in December. Could you please, comment on the most important outcome of the visit and its specifics?
Ambassador: We were delighted to welcome President Putin to New Delhi for the 13th India-Russia Annual Summit on December 24. It was the crowning event of our bilateral interaction during 2012. The talks between Prime Minister Manmohan Singh and President Putin took place in the extremely warm and very friendly atmosphere you would expect when two close friends meet. The Summit was very productive. Both sides were pleased with its results and by the considerable advance made on the entire range of India-Russia issues.
Besides issuing a Joint Statement, documents on foreign office consultations, a cultural exchange programme, science, technology and innovation, cooperation in telecom, a fund for investment in projects in both countries, etc., were signed at the Summit.
Q.: Can you give more details of the agreements that you regard as being of special significance?
Ambassador: Well, the MoU between SBI and Russian Direct Investments Fund is particularly relevant as it envisages a US$ 2 billion fund to facilitate investments in long-term projects in both countries.
Two significant private sector joint venture agreements were also signed. One is for a joint venture between Elcom Systems Private Ltd. of SUN Group and Russian Helicopters, for manufacturing Kamov and Mil brand helicopters in India. Another joint venture, between Elder Pharmaceuticals Ltd., Mumbai, and PharmEco of Russia, envisages a US $100 million plus investment for manufacturing and marketing Indian pharmaceuticals in Russia.
Of significance too is the MoU between NIS-GLONASS of Russia, and Bharat Sanchar Nigam Ltd. & Mahanagar Telephone Nigam Ltd., for a pilot project to assess the Russian GLONASS system. Its success would open the way for the application of GLONASS in sectors like disaster management, intelligent transportation, telephony and long-distance communications. NIS-GLONASS also signed a Strategic Cooperation Agreement with Tata Consultancy Services for technology partnerships covering software development, systems integration and product engineering.
Another important document signed was the MoU on Science, Technology and Innovation. It will encourage our scientists to conduct fundamental and applied research to create new technologies, equipment and materials. Your listeners would recall that in 2012 we also operationalised India-Russia Science & Technology Centres in Moscow and Delhi-NCR to commercially harness new and innovative technologies.
We have also drawn up a lengthy calendar of foreign office consultations as well as an extensive Cultural Exchange Programme for 2013-2015.
Q.: What about defence? We heard some defence deals were also signed?
Ambassador: Yes, we signed two defence contracts worth about US$ 4 billion on the Summit day. They concern the delivery by Russia to India of 71 MI-17 V5 helicopters and 42 SU-30MKI fighter kits.
Q.: Nuclear energy has been an important area in cooperation between Russia and India in the past years. However, we all remember the protest campaign launched by local people against the construction of the Kudankulam nuclear power plant. Reportedly, India is considering building other plants using Russian technology. Is this so?
Ambassador: Let me say that our cooperation in civilian nuclear energy is proceeding well and has good prospects. Kudankulam Unit 1 has been completed. It will be commissioned next month. The completion and commissioning of the second 1000 MW unit at Kudankulam is also being expedited. We expect Unit 2 to be ready this year. Meanwhile, we have been moving ahead with Kudankulam Units 3 & 4. The Protocol for state credits for the construction of Kudankulam Units 3 & 4 was signed in July 2012. Both sides have also agreed to swiftly conclude negotiations on the Techno-Commercial Offer for those two units.
We are committed to implementing the 2008 India-Russia agreement on nuclear power cooperation and the 2010 Road Map on construction of Russian designed nuclear power plants in India. We will incorporate the best technology in our nuclear power plants and maintain the highest safety standards.
Q.: There are a lot of reports by the Indian press that Russia is giving up its position as a weapon supplier to India. But there is less information about the activities of the Russian-Indian joint venture “Brahmos” that produces advanced weapons and that recently carried out successful tests in India. Do you think whether this reflects new situation and trends in India’s military and technical cooperation with Russia?
Ambassador: Natasha, defence has long been an important pillar of our strategic partnership. The stiff competition that Russian arms manufacturers face from arms producers of other countries on the Indian market has been around for decades, and our defence ties with Russia have grown nonetheless. Russian arms manufacturers have not succeeded in some of our recent defense acquisition programs, but that too is not unusual. Equally, there are many instances when Russian companies have proved competitive and emerged as valued partners in meeting our defence requirements.
Our defence cooperation with Russia is multifaceted. Thus, we manufacture T-90S tanks, SU-30MKI fighters, and other equipment in India. In August 2012 we signed a MoU for a Joint Venture to manufacture “SMERCH” rockets in India. We also conduct joint exercises. You would recall the 4th ‘INDRA’ exercise by our armies in Buryatia in August 2012. Also, the joint naval exercise ‘INDRA’ off the Mumbai coast in December 2012. We also induct Russian weapons and equipment. During 2012 this included the Mi-17 V5 helicopter into the Indian Air Force; also, INS Chakra and the frigates INS Teg and INS Tarkash were inducted into the Indian Navy. Incidentally, both these frigates have some India made equipment on board, besides being equipped with BrahMos missiles.
More importantly, in recent years our defence ties have transformed quite radically from a buyer-seller relationship to one involving joint research, design, development, and production of advanced defence systems. The BrahMos supersonic missile project was an early illustration of this fundamental shift and is a good example of our mutually beneficial defence cooperation. On December 21, 2012, we agreed to jointly develop an air launched version of the BrahMos cruise missile for the SU-30MKI. Once this happens, Brahmos would become the only such missile that can be launched from land, sea or air. BrahMos celebrates its 15th anniversary this year and it would be opportune for the media to highlight the successes of this India-Russia joint venture.
Let me also highlight the Fifth Generation Fighter Aircraft project and the Multi-role Transport Aircraft project. These are more recent examples of the fundamental shift in our military-technical cooperation. We signed the General Contract for the MTA in May 2012 and its Preliminary Design Phase Contract in October 2012. BrahMos, the FGFA and MTA projects are good examples of what we can do together. They provide compelling evidence that our mutually beneficial military-technical cooperation, based on trust and confidence, is progressing well. Overall, we have a dynamic and growing defense partnership, not a waning one.
Q.: An example of Russia’s successful investment cooperation with India had long been AFK “Sistema”. But the license of its Indian subdivision Sistema Shyam Teleservice Ltd that provides services under the MTS brand in more than 400 Indian cities was suspended last year. An Indian court postponed the suspension until the 14th of February. The biggest Russian investor in the Indian economy AFK “Sistema” has said more than once that the situation may prompt it to consider leaving the Indian market. KAMAZ and several other Russian companies are also experiencing problems in India. How do you assess real prospects of investment, economic and trade cooperation between Russia and India?
Ambassador: The court hearing on Sistema’s curative petition filed before the Supreme Court of India is due shortly so let us await it.
However, I would like to highlight that the agreements signed during the 13th Summit demonstrate the positive sentiments in Russia for investing in India and vice versa. They include documents for setting up a $2 billion investment fund for investing in India and Russia.
Also, major investments are envisaged, for example, in joint ventures to manufacture Russian helicopters in India and Indian pharmaceuticals in Russia. More so, NIS-GLONASS, a company that is itself 70% owned by Sistema, signed two forward looking documents during the 13th Summit, reflecting a long-term desire to be present and active in India.
Looking ahead, we also agreed at the Annual Summit last month to work out a list of priority investment projects and a road map for their implementation. So, overall, the prospects of Russian investments into India and vice versa look very good.
Q.: What about trade prospects?
Ambassador: Well, as regards our trade we have been constantly looking for new ways and opportunities to boost it. Our bilateral trade was US$ 7.5 billion in 2009, US$ 8.5 billion in 2010 and US$ 8.9 billion in 2011. Our two-way trade has grown by an impressive 32.5% during January-November 2012, compared to the identical period in 2011. This substantial growth has been a result of concerted efforts. We participated with a high-level delegation in the St. Petersburg International Economic Forum in June 2012. The 3rd India-Russia Business Dialogue was convened on its margins. Numerous Indian trade promotion councils, commodity boards and other delegations participated in trade shows in Russia last autumn. The 4th India-Russia Business Dialogue was organized in Moscow in October 2012. Deputy PM Rogozin led a large business delegation to the 18th India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation in New Delhi in October 2012. The 6th India-Russia Trade and Investment Forum was held on its sidelines. Special efforts were made to develop ties between India and Russia’s regions. Places I visited in 2012 in this regard included Bashkortostan, Irkutsk, Kursk, Tatarstan, Leningrad and Sverdlovsk Regions, Primorskiy Krai, and Chuvash Republic.
The healthy growth in our trade in 2012 offers solid grounds for optimism. Data for December 2012 is still awaited. However, India-Russia trade for the entire year 2012 will definitely cross the US$10 billion mark and I expect it would reach US$11 billion. This would represent the fastest growth in our trade with Russia in recent years. It is especially commendable given the global economic slowdown and the marginal decline in India’s overall trade during 2012. If this year’s quick pace in trade growth is maintained till 2015, then the ambitious US$ 20 billion target that we set for 2015 would be achieved.
Q.: And one more time, I would like to congratulate Your Excellency ambassador on India’s Republic Day and express hope for successful promotion of Indian-Russian ties. We wish the people of India happiness and prosperity.
Ambassador: Thank you Natasha. Your kind words and good wishes on our Republic Day are deeply appreciated. My greetings to your listeners and best wishes for a healthy, happy and prosperous 2013.