Rupee-rouble resources to be invested in JVs

Rupee-rouble resources to be invested in JVs
DH News Service New Delhi:
India’s debt to Russia will be converted into investments to be channelled into joint ventures to produce titanium and develop a multi-role transport plane.

India’s debt to Russia will be converted into investments to be channelled into joint ventures to produce titanium and develop a multi-role transport plane. Prime Minister Dr Manmohan Singh indicated this on Thursday at a press conference after three-hour long discussions with the visiting Russian President Vladimir Putin. Currently more than US $2 billion is lying unutilised under the Rupee-Rouble agreement between the two countries. Moscow wants this debt to be used for investments in joint ventures instead of supplying goods, as was the case earlier.


Dr Singh said they have agreed to use these financial resources to expand various areas of Russian-Indian cooperation, including to set up joint ventures to produce a multi-role transport plane and titanium dioxide. The two countries could set up a joint venture to produce titanium dioxide in Orissa with the participation of the Russian company Tekhnokhimholding. For his part, Mr Putin too indicated that his government was favourably disposed towards financing of investments by Russian companies in India by utilising the money under the rupee-rouble debt agreement. “We stand for liberalising these opportunities,” Mr Putin told Indian and Russian businessmen at an interactive session organised by CII, FICCI and ASSOCHAM on Thursday. “The restrictions imposed on the rupee debt repayment mean only one thing: certain companies, which are involved in traditional industries, will receive preferences, whereas other companies will have very limited opportunities, or none at all,” Mr Putin noted. “I cannot but agree to the proposal to expand opportunities for repayment of the rupee debt,” he added. He also indicated that Moscow and New Delhi would reach an agreement on this issue. “We are wholly on your side, we are your loyal allies,” the 55-year-old Russian President told the participants. The Federation of Indian Chambers of Commerce and Industry (FICCI) recently suggested a three-pronged strategy for giving a fillip to India-Russia trade and investment. The strategy involves establishing an institutional mechanism to examine and sort out the financing problems faced by exporters, using the unutilised money in the rupee-rouble debt agreement to fund investments in India and leveraging it to attract greater Russian participation and greater interface between Russian and Indian companies to facilitate the flow of information on the business opportunities available in the two countries. FICCI feels that these measures would go a long way in doubling India-Russian trade to US $5 billion. in the next five years from the trade turnover of US $2.72 billion recorded in 2005-06.