BUSINESS

Russia eyeing opportunities in infrastructure

CHENNAI AUG. 26. Faced with near-stagnation in its trade with India, the Russian Federation is banking on participation in India's programmes of infrastructure development and disinvestment in the public sector to expand economic cooperation.

Bilateral trade, which has been fluctuating between $1.3 billion and $1.5 billion in the past five years, is forecast by Russian trade authorities to be in the region of $1.3 billion this calendar year and $1.4 billion in 2004. While recognising several constraints to expansion of bilateral trade and investment, especially on the Russian side, besides difficulties in repayment of India's rupee debt, Russian authorities are hopeful that new initiatives on the part of Russia would boost cooperation between the two countries.

Russia, as a nation with advanced levels of technology in core sectors such as power, mining, machinery, electronics, information technology and communications, sees immense opportunities for itself in India's ongoing programmes to expand oil and gas exploration and production, road building and port and railway development.

According to the Russian Consul General in Chennai, Mikhail M. Mgeladze, the Russian company, `Tsentrdorsroi' is participating in building two roads with 144 km length at a cost of $140 million. This, of course, is but a small fraction of the massive 13,000-km road construction project that India has undertaken. Though Russia is not participating in the building of Delhi's Metro, it is eager to assist in building metros in Mumbai, Bangalore, Hyderabad, Ahmedabad, Gandhinagar, Lucknow, Kochi and Thiruvananthapuram.

Vniias, a Russian company, which specialises in application of information technology to transportation and railway management, and Izhevsk Radio Factory making radio-space-electronic equipment, are seeking participation in the modernisation of Indian railways.

In the oil and gas sector, Gazprom is conducting exploration in Block 26 in the Bay of Bengal, and Strointransgaz is building water and gas pipelines in India. Zarubeneft, an overseas oil and gas exploration company of Russia, is exploring financial and technological cooperation with Oil India, Indian Oil Corporation and Reliance Petroleum, according to Russian sources. The state-owned Khrunichev plant is participating in a tender to build a desalination plant in Chennai. The Russian Aluminium Company is exploring the possibility of acquiring a substantial equity stake in the Orissa-based National Aluminium Company (whose disinvestment process has, however, been held up following protests by sections of stakeholders).

The flow of Indian investment to Russia has picked up momentum in recent times. ONGC Videsh has invested in the Sakhalin-I oilfield. J. K. Paper and Cosmos International of India have proposed to invest, respectively, in paper manufacturing and pharmaceutical production, in Russia. A joint venture has been planned in India for production of titanium dioxide for export to Russia.

With its accession to the World Trade Organisation (WTO) not far away, Russia is keen on tapping India's experience in multilateral trade negotiations.

Perceiving India as a "dependable partner with a dynamic and stable economy and a big market with a constantly growing demand for both raw materials and value added goods and services," Mr. Mgeladze hopes that the understandings and inter-government agreements reached during the exchange of visits by President Putin and Prime Minister Vajpayee in the past three years would be implemented.

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