Saturday, May 25

Russia and India discussed prospects for investment co-operation

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Representatives of the business communities of Russia and India are interested in the implementation of joint projects and mutual investments. This was stated by Vladimir Ilyichev, Deputy Minister of Economic Development of Russia, during the plenary session of the first Russian-Indian Investment Forum. The main topic of the investment forum was the discussion of existing and prospective measures of state support for the growth of mutual investments.

India is one of Russia’s key trading partners. Mutual trade volumes have increased fivefold over the past five years. In 2023, India moved up to the second place and reached a share of 8 per cent in Russia’s total foreign trade. Last year alone, trade turnover between the two countries grew by 61 per cent – renewing a historic high. In 2024, the positive momentum continues, with trade turnover up 18% in the first 3 months of the year

‘Exports in 2023 grew by 66.1%, imports increased by 23%. The main share of Russian exports to India is still minerals, food and metals,’ Vladimir Ilyichev cited the data. – Imports of goods from India in 2023 showed steady growth in all commodity categories. The largest increase in imports from India was recorded in the supply of machinery and vehicles, chemical products and metals. Food alone was supplied from India for more than $1 billion’.

Russia and India, according to the deputy minister, are striving to achieve greater stability and predictability in bilateral trade. During the forum, the sides discussed steps to diversify the structure of trade flows and expand the range of products supplied.

‘Businesses of the two countries need to facilitate the search for new product niches and market entries. The growth of bilateral trade can be facilitated by an increase in investment activity of the parties and mutual penetration of the economies of Russia and India,’ commented Vladimir Ilyichev. Murat Kerefov, Deputy Minister of Economic Development of Russia, spoke about investment support mechanisms at the forum. Among the key instruments that form the basic conditions for investment, the Deputy Minister singled out the regional investment standard, which is aimed at creating a favourable administrative and legal environment through a unified system of investment attraction, elimination of typical barriers for investors. As well as agreements on the protection and promotion of capital investments (SPCP), which create predictable conditions for the realisation of large projects. ‘We see good statistics on the mechanism – starting from 2020, 68 CFPAs have already been concluded for a total investment amount of more than RUB 4 trillion,’ Murat Kerefov commented.

He added that investments in Russia last year reached Br34 trillion – the growth of 9.8% is a record compared to previous periods. Their peculiarity was the transition of initiative to private business and the growth of investments in machinery, equipment and intellectual property.

‘At the same time, foreign investors locating their production in Russia have access to the same support measures as Russian companies. The key condition is registration of a Russian legal entity,’ the deputy minister emphasised.

The parties agreed that under the current restrictive measures against Russia, special attention should be paid to the infrastructural issues of organising foreign economic activity – to develop joint financial and banking mechanisms, focusing on settlements for export-import operations, which will allow maintaining high rates of development of bilateral cooperation. One of the central topics of the India-Russia Investment Forum was the discussion of the possibility of resuming the Agreement on Encouragement and Mutual Protection of Capital Investments. The Russian side favoured a balanced agreement that would take into account the interests of all participants – both investors and the state.

‘On the one hand, the agreement should not give full freedom to investors, it is necessary to leave the state the right to apply legitimate regulatory measures,’ Vladimir Ilyichev noted. – On the other hand, the state should not be tempted to take arbitrary or unreasonable measures. An investor should have a clear set of rights and effective tools to protect them’.

Russia proposed to its Indian counterparts to consider reformatting the current negotiations into talks on an agreement on trade in services and investment that includes investor and investment protection. A different format of the agreement would allow the countries to adopt more flexible approaches during bilateral negotiations.



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