PM Modi's Russia visit to focus beyond defence ties; to seek investments for infrastructure fund

NEW DELHI: India and Russia are keen to utilise PM Narendra Modi’s upcoming visit to Moscow to strengthen ties beyond defence with creation of a joint innovation fund, besides prospective investments from Russia in National Infrastructure Fund as well as expanding bilateral trade basket beyond diamonds and pharmacy. Officials said a joint $3-billion fund to promote startups in the nanotechnology field, with applications from defence to aerospace and manufacturing, could be concretised during the PM’s visit. Russia had earlier expressed its keenness to participate in Modi’s ‘Make in India’ initiative.

The proposal to set up a joint innovation fund has been in the pipeline for over a year. RUSNAN, a state-run Russian firm which is working on commercialising nanotechnology, has put forward a proposal that India and Russia equally contribute to the fund that will select and nurture companies working in the field, officials said.

India is also seeking Russian investments in the National Infrastructure Fund and this could gather momentum during the PM’s trip, according to officials. The two countries are also exploring various other sectors to expand the trade basket. Modi and Russian president Vladimir Putin are expected to deliberate on this issue during the annual summit in Moscow, where a number of Indian businessmen are expected to be present.

The Western sanctions owing to Ukraine crisis followed by the recent downslide in Russian-Turkish relations (after a Russian fighter jet was shot down by Turkey) have compelled Russia to look towards old partners such as India as investment destinations, people familiar with the matter indicated. Russia has cancelled a number of joint projects that it was undertaking with Turkey in retaliation to downing of its fighter jet. Russia needs India as a major trade and economic partner, Deputy PM Dmitry Rogozin told TASS after his last week’s visit to India to prepare for Modi’s trip.

“In conditions of sectoral sanctions, which have been imposed on Russia, we still need a big partner that can fill the vacuum that appeared after our retaliatory measures,” Rogozin said. “I am confident that this should and can be filled with Indian manufacturers.” Rogozin said further, “Previously, we were focused on military-technological cooperation. It is no longer so. We need India as a major trade and economic partner in the first place in conditions when we can no longer maintain economic interaction with partners like Turkey because they have indeed been treacherous and cunning and have committed something, which is going to throw our relations far back.”

ET view: More From Moscow

It is welcome that India’s engagement will go beyond military matters during PM Modi’s Russia trip next week. There is a need to deepen the economic facets of the strategic ties between India and Russia. The levels of bilateral trade now must get a leg-up, given the scope for trade is significant in many spheres including energy and IT, besides diamond and pharmacy. Joint funding of startups a good idea. Ditto for infrastructure investments. This will be complemented by the endeavour of BRICS to boost economic integration