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Interview of Ambassador of India with Ms. Polina Chernitsa, Special Correspondent RIA Novosti

Question 1: When can the meeting of Indian and Russian leaders be held? The Kremlin has earlier stated that it might be shifted from December to autumn; apart from this a diplomatic source from Delhi has earlier stated to RIA Novosti that Mr. Modi’s visit may take place at the end of November. Can you confirm this? 

Answer: We expect the Summit meeting between the leaders of India and Russia to be held later in the year.  The dates are still being worked out through mutual consultations. A number of bilateral meetings are scheduled to be held in Russia, leading up to the Summit meeting. The two major meetings are those of the India-Russia Intergovernmental Commission for Trade and Economic Cooperation (IRIGC-TEC) which is co-chaired by our External Affairs Minister and the Russian Deputy Prime Minister, and the India-Russia Intergovernmental Commission for Military Technical Cooperation (IRIGC-MTC) chaired by the Defence Ministers of the two countries.  Both these meetings are expected to be held sometime in the autumn.  A number of working group and sub group meetings will be held in the run up to these IRIGC meetings. We therefore have a busy schedule of bilateral meetings over the next few months.

Question 2: When can the agreement on free trade between India and the EAEC be signed? Could this happen before the end of the year? 

Answer: We believe that a closer engagement between India and the Eurasian Economic Union will be mutually beneficial and will engineer a quantum jump in our economic cooperation. We have already commenced a dialogue to look at all aspects of this engagement. A Joint Study Group meeting on the proposed India-EaEU Free Trade Agreement (FTA) was held in Moscow on July 31, 2015 and the talks focused on areas and sectors to be covered in the FTA and timeline for finalization of a joint report, containing recommendations to the governments of India and EaEU countries. It is too early at this stage to say when a FTA can be expected, but I believe both sides are keen for an early conclusion. 

Question 3: What agricultural products that are not currently shipped, may be potentially interesting for India's to be imported to Russia? 

Answer: Agriculture sector is one of the important areas for bilateral trade between India and Russia. Recently, four Indian companies received permission for export of buffalo meat to Russia and the first consignment arrived in Russia in April 2015. One Indian company has also received permission to export egg powder to Russia, while the export of dairy products is under negotiation. Besides, tea, coffee, spices, fruits and vegetables are other items that are regularly exported from India to Russia. 

We are now completing negotiations with Rosselkhoznadzor on (dairy) products certification. Several Indian companies have been selected and they are in the short-list. And there are a number of requirements they must fulfill in order to start deliveries. Now we are finalizing these details and after that the agreement will be signed. We are also interested in expanding exports, the supply of sugar, for example. If there is such demand from the Russian side we would like to ship it. The same is true for the export of tobacco; we would like to increase its exports to Russia. The export can commence only after negotiations are held and agreements arrived on the cost aspects. 

Question 4: At the end of last year the Federation of Indian Export Organisations expressed hope that due to the embargo export of Indian goods to Russia will almost double by 2018 - to $ 4 billion from 2.12 billion in 2014. For what goods shipped to Russia do you see growth potential? (Agribusiness, automotive components, equipment?) Are there any specific agreements? 

Answer: There is considerable untapped potential for export of agriculture products, machinery, automobile components, pharmaceuticals, etc from India to Russia. Our effort is to bring together the potential business partners from both sides to promote trade in these commodities. We see increased interest, as evidenced by participation in trade fairs. The results will only become evident in a few months. 

This is a part of commercial negotiations. Yet the demand is still there. The other aspect of the issue is the shipping time. We need to look for shorter routes, especially when we deal with agricultural products. In this context we must understand how important the “North-South” transport corridor project is. We have intensified our efforts to launch this project, as this will reduce the shipping time and transport cost. 

Question 5: And by when can the project going to be completed? 

Answer: Now it is not possible to answer to this question, as many issues remain to be coordinated. Still there is progress in the project. The head of Federal Customs Service, Mr. Belyaninov has earlier stated that he plans to meet with his colleagues from India, Iran and Azerbaijan soon to discuss how customs clearance procedures can be harmonized within the framework of this project. I would like to add that this meeting, taking place in New Delhi from August 19 to August 21, will host not four but eight countries that are implementing the project, and these discussions are to facilitate the work 

Question 6: Is it planned to make the Russian plane Sukhoi Superjet a part of the program "Make in India"?

Answer:This is a very complicated question. Russian side has expressed interest in technology transfer and joint production of Sukhoi Superjet in India under the Make in India programme. Some initial discussions have taken place. Recently, we have agreed to joint manufacture of helicopters in India which could possibly be the first India-Russia project under 'Make in India' initiative. We are discussing a number of other projects also under ‘Make in India’. 

It is all about the fact that Sukhoi Superjet is a commercial civil air-craft. And the project execution depends on whether we are able to find a suitable venture partner in India, who will not only have technical and financial recourses but also be able to get orders for production from Indian and foreign aviation companies. Because if we start producing Sukhoi Superjet in India, it is not likely to be sold only inside the country. And this cannot happen within one day. India is very much willing to implement this project though it takes time to do it. 

Question 7: Will it take several months or possibly a year? 

Answer: It depends on many circumstances. It is too early to discuss exact time frames.   

Question 8: And at what stage are the negotiations on joint production of helicopters? 

Answer: We have recently agreed on joint production of helicopters (Ка226-Т) in India and this is likely to become the first Russian-Indian project of this programme ((Make in India).  The process of creating joint production is not yet complete, though we are very close to the final stage. Now the detailed business plan is under discussion. “Rostek” (the head holding of “Russian Helicopters” company) already has a venture partner in India. Next step is to create the joint production. 

I should note that the armed forces of the Defense Ministry of India have already shown great interest in the project, especially because the helicopter has already passed technical tests in India. 

I hope that before the Russian-Indian Summit, before the meeting of Prime Ministerr Modi and President Putin, we will have a detailed road map and timeline. And as soon as we have this road map our partners will start implementing the project. 

Question 9: Earlier in the interview to RIA Novosti you have stated that till the end of 2015 India will create conditions for diamond sales auctions that are profitable for Russian company ALROSA. Is there any progress in this sphere? 

Answer:Last week I met with the president of ALROSA to discuss our cooperation in the future.We have already made some progress. The Government of India has created a Special Notified Zone (SNZ) in the Mumbai Diamond Exchange and further modalities are being worked out to create more conducive conditions for direct trade between India and diamond exporters like Alrosa. Though there stay other steps which are now being negotiated. They are mostly of technical nature. And I hope that some of them will be resolved during the next visit of the Prime Minister to Russia.

But we must not forget the effect of the crisis which has also affected the diamond industry: in the first place it has resulted in a fall of demand. Now, answering  your question: such conditions will be created for ALROSA and other diamond suppliers, when both issues are resolved, that is, to create conditions both in India and inside the industry on the whole. 

Question 10: According to your words a great number of contracts, announcements or decisions are being prepared for the next Summit? 

Answer: We would like to be able to do it. This testifies how important these yearly Summits are: such frameworks help to intensify working process, set up a certain tempo for it. As every Summit needs to bring results. 

Question 11: In January of this year, the trade representative of Russia in India claimed that the Indian State Trading Corporation (STC) is interested in long-term contracts for the supply of goods from Russia. At what stage are the negotiations now? When and for what products can the contract be made? With what Russian companies? 

Answer: The State Trading Corporation had expressed interest in long-term contracts for crude oil sourcing from Russian companies. We understand that direct contact has been established between the STC and major Russian oil and gas companies, who are now negotiating the terms and conditions of such contracts. 

Rosneft is the major partner of several Indian companies.   Besides, talks are going on between ONGC and Rosneft about several new projects.  They are holding negotiations about several oilfields and are very interested in it.  ONGC has a strong presence in Russia with investments in Shakhalin-I and Imperial Energy Nord in Tomsk.

Our gas company GAIL has already entered into contract with Gazprom for supply of LNG.   Gazpromneft Company is also negotiating with Indian companies on supply of oil. Thus we are conducting negotiations in many directions. And I think in the coming months we will have an understanding on how these contracts will work out. 

Question 12: Does Rosneft still remain the major partner?

Answer: It depends on how you look at it. Given that we have projects on LNG with Rosneft, Novatek and Gazprom. It depends also on who will be more attractive. 

Question 13: And Lukoil? 

Answer: In the past there were some negotiations by Indian companies with Lukoil, but presently I am not aware of any such contacts. 

Question 14: Earlier Ms. Sitharaman, Minister of Industry and Trade, stated that India needs $ 1 trillion investment to modernize infrastructure. Are there any negotiations with Russia on such investments under way? If so, with what foundations? And to what kind of projects? 

Answer: There are several projects under consideration under the Make in India programme, especially in sectors such as engineering, aviation, infrastructure, research and development etc. We have seen considerable Russian interest in projects like the Delhi-Mumbai Industrial Corridor. However, it will require time as many of the proposals are at the negotiation stage and will require time to fructify. 

Question 15: And at what stage are the negotiations on the participation of Russian companies in this project? 

Answer: This is very complex. We are not just talking about the corridor as such, but also about other projects related to it, hundreds of projects: railways, creating "smart" cities, creating infrastructure. There are a number of Russian companies who were interested in cooperation: for example (the company) “Systema”, has shown some interest in smart cities and which is also a part of the project. Many negotiations are going on at the moment.  And this is true for many aspects of Russian-Indian cooperation which were actively working on in the last 6-7 months. 

Here is an example that is not associated with the project of Delhi-Mumbai corridor. At the end of August Russia hosts the MAKS air show. Already 25 Indian companies have stated that they will take part in it. No such interest at this scale was seen in the recent past.  And I continue to receive letters with requests.  And as per my latest information, about 35 companies want to come to the show. And this represents a notable interest from Indian business. And by the way, now the Ministry of Industry and Trade wants to organize a trip for Russian companies to India, where they also want to discuss the possibility of taking part in Make in India program. These are the facts, not just words about the growing mutual economic interest. 

Question 16: When can such trip happen? 

Answer: Ministry of Commerce and Industry have indicated that they want to organize such trip for the Russian companies in September. 

Question 17: Do any Russian electricity companies, in addition to RusHydro, express the desire to participate in the development/construction of power facilities in India? If so, what are these companies? And what kinds of offers come. 

Answer: Companies directly pursue their commercial interests in India. There is considerable scope for new power projects in India, as well as for renovating and upgrading a number of Soviet era thermal power plants in India. 

Question 18: How do you assess the day of yoga that was for the first time celebrated in Russia and the rest of the world? 

Answer: We were overwhelmed by the tremendous response to the first International Day of Yoga event in Russia in terms of participation and enthusiasm. As per our estimates, over 45000 people participated in the celebrations in over 200 locations in 60 regions and across all the time zones of this vast country. I think it is a remarkable manifestation of the deep interest among the people of Russia in Yoga. We have also seen a similar enthusiastic response to this event in various other parts of the globe. 

Question 19: What is the role of the BRICS countries in Indian economic cooperation? What new projects does India plan to pursue in the framework of BRICS? What are the new projects India is planning in the framework of BRICS and SCO? How New Delhi is going to cooperate with Pakistan in the framework of SCO?

Answer: India has a significant level of bilateral trade with other members of BRICS. China is our largest trade partner. We would like to enhance our trade with Russia in various areas where there is a potential and both sides are working on it. There is immense potential for intra-BRICS cooperation as they constitute over 30% of the land area of the world, 42% of population and 21% of global GDP. India with other BRIC nations would like to explore possibilities and work towards further enhancing intra BRICS economic cooperation. At the BRICS Summit in Ufa, our Prime Minister outlined a number of new ideas for intra-BRICS cooperation. He also suggested that the first project to be funded by BRICS New Development Bank could be one for clean energy. 

Question 20: How does New Delhi want to cooperate with Islamabad in the framework of SCO? 

Answer: SCO is an important regional mechanism for cooperation in economy, regional security, counter-terrorism, energy, transport connectivity and culture. India has been associated with SCO as an observer since 2005 and at Ufa the process of induction of India as a full member commenced. India will participate in SCO initiatives and projects and make its contribution to its objectives. We will not bring bilateral issues into this multilateral organization. 

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