India and Russia on Monday moved to strengthen their economic ties by inking a pact on a Kremlin-backed $2 billion investment fund and agreeing to open talks on a Comprehensive Economic Partnership Agreement that will also involve Belarus and Kazakhstan.

After talks between Prime Minister Manmohan Singh and Vladimir Putin at the twelfth straight annual summit, the two countries finalised 10 agreements. Among them were two military contracts, worth about Rs. 20,000 crore that had been in the works for some time.

However, there was no substantial progress on issues of discord — delay in commissioning aircraft carrier Gorshkov, stalemate on clinical trials in Russia, applicability of the Nuclear Limited Liability Act on six new reactors to be put up by Russia at Kudankulam, inability of Russian companies Sistema and Severstal to move ahead with their investment plans in India and the tax imposed on Imperial Energy, an Indian company operating in Russia.

On the positive side, despite the setback suffered after the Supreme Court cancelled all 2G licences, Sistema indicated its faith in the country with Glonass, its sister company, signing two agreements in the satellite segment. India has already signed the military side of the contract with Glonass, a constellation of 34 satellites, last year.

India and Russia also agreed to take the first steps towards operating a “ranging station” that will help accurately fix the location of satellites. A military side agreement on receiving precision signals from Glonass was signed last year, following active interest shown by National Security Advisor Shiv Shankar Menon.

Russia and India also resolved to further extend their partnership in the energy sector, which has moved beyond investment (Sakhalin-I) to direct trade (Gazprom-Gail) and is now seemingly set for joint investment in downstream and upstream sectors. India put its interest areas on the table — equity participation through ONGC-OVL in existing and new projects in Siberia, Russia’s Far East and the Arctic Shelf besides interest in acquiring equity stake in discovered or producing assets and in proposed Liquefied Natural Gas (LNG) projects in Russia.

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