India Russia Webinar

Wednesday, May 27, 2020

Defining a new paradigm in India Russia Relations in the era of COVID-19

Introduction
The India Russia Webinar was held on May 27, 2020with focus on defining a new paradigm in India Russia Relations during the era of COVID-19.
 
The ASSOCHAM Webinar Series focuses on generating a dialogue with relevant industry and Government of India stakeholders for ensuring business continuity of bilateral commercial, trade & investment, engagement with India’s leading trading partners in a post-COVID-19 world.
 
Key Deliberations at the Webinar:
H.E. Shri D B Venkatesh Varma, Ambassador of India to the Russian Federation
Mr.  Deepak Sood, Secretary General, ASSOCHAM

Panellists were:
·        Mr.  Manish Prabhat, Joint Secretary, Eurasia, Ministry of External Affairs, Government of India
·        Dr Alexander LeonidovichRybas, Trade Commissioner, Trade Representation of Russia to India
·        Mr. Nandan Unnikrishnan, Distinguished Fellow, Observer Research Foundation (ORF)
·        Mr. Andrey Terebenin, Senior Partner, Sistema Asia Fund
·        Mr. Anup Vikal, Chief Financial Officer, Nayara Energy
·        Mr. Nikita Mazein, Business Development & International Commerce Executive, Rosatom
·        Dr Ashwin Johar, India Russia Bilateral Council at NITI Aayog
·        Ms.Olga Kulikova, Member of General council of All Russia public organization Business Russia, Business Ambassador to India
 
The Webinar was moderated by Mr. Abhishek Gupta, Partner, Government and Transaction Advisory Services, EY LLP
 
Summary of deliberations
Welcoming the panellists and industry participants to the Indian Japan Webinar the Mr. Deepak Sood, the Secretary General, ASSOCHAMsaid the following:
·        Localisation of products, disruptions in supply chain
·        He mentioned the5 pillars of the Self-Reliant India (Atmanirbhar Bharat) set out by our Hon’ble Prime Minister, Shri Narendra Modi.
·        Mr. Sood also talked about the various sectors/areas which can be focus areas going forward: IT,ITes, Pharma, Agriculture.
·        He stated that contributions of various sectors to the Indian GDP: Agriculture:  generates 49 percent of jobs. Services which has a share of 60 percent and 25 percent share of manufacturing in the Indian economy, in which 85 percent is MSMEs.
·        In conclusion: He opined that the Indian economy will reboot our robust Agriculture sector, and Services sector being a major contributor in our GDP. He stated that demand will revive and this will provide necessary internal fillip to the Indian Economy.
 
The keynote remarks were given by the Ambassador of India to Russia, Mr.  D B Venkatesh Varma
 
·        Mr.  Varma stated that India and Russia are strategic and longstanding partners.
·        He thankedASSOCHAM for organising the webinar and all stakeholders and strong supporters of India-Russia relations for their participation.
·        Ambassador Varma said that amidst this global challenge of a century, the inherent and essential strengths of the India Russia friendship are a great advantage and that the sense of trust, quick solidarity and willingness to look to each other for opportunities and projects for cooperation that underline the India Russia friendship will help us to together tide over the present disruptions and difficulties unleashed by the COVID-19 outbreak.
·        He further gave the account of outstanding personal relationship between Prime Minister Narendra Modi and President Vladimir Putin and how India laid out a new vision for the India-Russia relationship during Prime Minister Modi’s September 2019 visit to Russia for the 20th.India Russia Annual Summit and as Chief Guest at the 5th Eastern Economic Forum in Vladivostok.
·        Ambassador Varma further assured that strong fundamentals, prudent steps taken by both Indian and Russian governments in handling of the COVID-19 outbreak in the respective countries, political strength and the economic muscle that both countries retain inspire the confidence that both countries and the commercial and economic activities will rebound within a period of 6-8 months. Going further, he mentioned foreign exchange reserves, limited and manageable deficits, and more specifically a coherent vision of both leaders and expressed confidence that these will prove to be advantageous for both India and Russia to emerge as stronger nations and partners.
·        Pandemic proof Sectors:Ambassador Varma next addressed certain specific sectors of commercial and economic cooperation, and listed a few sectors that he considers are nearly “pandemic proof”. These include:
o   Defence: longstanding defence cooperation and partnership where no impact of the pandemic could be seen in the broader vision over the next decade. The defence cooperation is bound to strengthen further in the future keeping in mind the recent finetuning of the Make in India program by Prime Minister Modi’s government.  Ambassador Varma called upon the Russian defence industry to view the additional incentives announced as part of the Make in India programme as a complementary aspect to the existing defence cooperation partnership, considering Russia was one of the first Indian partners to implement the Make in India programme.
o   Energy: Referring to the energy partnership, Ambassador Varma added that during the 2019 meeting in Vladivostok, both sides had agreed to work towards greater energy cooperation and committed to make the Russian Far East as an energy bridge between India and Russia. This energy cooperation based will go beyond consumer-supplier needs and mutually enhance the economic strength and development of both sides.  “In addition to oil and gas, several new projects in LNG, cooking coal and other associated projects including ports and infrastructure are only bound to give an impetus to the energy partnership between India and Russia”, he further added.
o   Pharma and Healthcare: Moving further, he mentioned pharmaceutical and healthcare cooperation and said that the COVID-19 pandemic has shed new light on the significant and potential cooperation that lies ahead in this sector. Ambassador assured full help of the embassy to industry stakeholders on both sides looking to explore new opportunities in the pharmaceutical and healthcare sectors encompassing a vast gamut of products and services including medicines, vaccines, therapeutics, medical devices, telemedicine, hospital infrastructure, etc.
o   Other sectors:Ambassador Varma also highlighted multiple opportunities in the telecom, agro and agriculture products, textiles and apparel sectors, and emphasised that supply chain diversification is a must in order to reduce overdependence on one or two major suppliers.
o   Diamond Sector: He also talked about the diamond industry and how it became one of the worst affected sectors on both sides. Both governments must handhold the diamond industry during this plunge so that they are able to bounce back and once activities in investments, technologies and companies pick up within a year’s time, Ambassador Varma recommended.
·        Ambassador Varma recommended that all stakeholders on both sides should pay special attention to this and examine how this skill labour and migrants issue can be managed in a systematic way to leverage stronger India-Russia ties.
  
Panel Discussion
The panel Discussion was moderated by Abhishek Gupta from EY LLC
 
Panel discussion started with Mr. Manish Prabhat, Joint Secretary, Eurasia, Ministry of External Affairs, Government of India, where he highlighted the high degree of importance that is given to the strong relations between India and Russia and the goals that have been set up by the leaders of our country, about making the bilateral trade to USD 30 billion by 2025.
 
Mr. Manish talked about the regular interaction between India and Russia through Inter - Governmental Commission which is chaired by External Affairs Minister from our side and the deputy Prime Minister from the Russian side, which will be happening soon.
 
We also have the Strategic Economic Dialogue which is going between NITI Aayog and the Russian side in which we look at the key sectors for cooperation. He also talked about the USD 1 billion line of credit which is being negotiated for the Russian Far East and the strong business delegation that have been to Russian Far East last year, led by Commerce & Industry Minister.
The Joint Secretary Eurasia at MEA emphasized three things which we everyone should pay attention to:
1.    Eurasian Economic Union- we should look at the Eurasian Economic Union market as well which includes, Russia, Kazakhstan, Armenia, Belarus, Kyrgyzstan. India and Eurasian Economic Union have agreed to start the negotiations on a trading agreement, therefore we would also request the Indian Industry to come forward with their views on this to Ministry of Commerce & Industry regarding what could be the possible opportunities/ sectors for engagement.
2.    Greater usage of INSTC- INSTC is a cheaper way in terms of money as well as time, than what was being used earlier. It was founded by 3 members and now there are 14 members in it. We are trying to make this route more popular and I think ASSOCHAM should also think of something to make this route more popular among the industry.
3.    Rupee - Ruble Trade: Rather than dealing in hard currency, can we do something where our mutual exchange and settlement are in Rupee and Ruble, which would give a greater independence to our bilateral trade. Would ask ASSOCHAM to lead this and get industry view on this.
 
Further, Dr Alexander LeonidovichRybas, Trade Commissioner, Trade Representation of Russia to India,briefly talked about the strong relations that exist between India and Russia, and how things are going to change post COVID-19, considering the international conferences, meetings and exhibitions. He talked about using the digital options available to conduct the B2B Interactions, Conferences, meetings between Governmental Counterparts and exhibitions. Mentioning the India’s initiative about shifting the production/ manufacturing from other countries to India, Dr Alexander said that we support this initiative, India and Russia already has joint projects in different sectors such as, Chemical, Energy, coal, oil, Gad, Pharma etc. and we need to expand this, keeping in mind the goal that is set by the two leaders of our country, to expand the bilateral trade to USD 30 billion by 2025.
 
Dr Rybas’ comments were followed by Mr. Nandan Unnikrishnan, Distinguished Fellow, Observer Research Foundation (ORF),acknowledged array of important people participating at the Webinar and mentioned H.E. Ambassador Varma’s remarks and how most of the important aspects were covered by him.

He
also acknowledged remarks made by Mr. Alexander Rybas and reiterate that whether COVID situation changes or not, India- Russia relations will bring stability. People in Russia are keeping a track of the developments in India.
Andrey Terebenin, Senior Partner, Sistema Asia Fund, spoke on practical side of our relations, Digital Bridge and Russian Money in Digital Space in India.Major feedback coming from companies is that they are struggling while some are increasing the volume.He said that at Sistema are bringing more digital companies in our portfolio.
 
He also discussed how COVID-19 pandemic has shown a way ahead: Digitization will accelerate; telemedicine and use of AI based apps will increase.Localization will definitely go up but these digital products should be of global nature. He also insisted on making Joint India- Russia Fund of Venture capitalists as they have received interests from Indian giants including Tech Mahindra & Invest India.
 
Mr. Anup Vikal, Chief Financial Officer, Nayara Energyspoke next. He talked about Nayara Energy and how it was formed under the aegis of BRICS Summit 2016. He also mentioneddeal that was signed between Rosneft (Russia) and UCP Investment Group (Russia) to buy Oil assets of Essar Oil with a value of USD 12.9 Billion.
 
The largest deal from Russia to India.Rosneft has a major role in various transactions and MOUs between India and Russia and currently operates 5700 fuel stations twice as much as when they came on board.
 
Talking aboutNayara Energy further, he discusses how the company continued to work on various projects. In Vibrant Gujarat Summit, Hon’ble Prime Minister of India and representatives of Rosneft signed an MOU of USD 850 million to set up polypropylene project in the existing location; Vadinar.One of the key Geo-Political elements of the deal was company under the ownership of Essar had outstanding payments to NIOC (which is an Oil company of Iran) of USD 3.4 Billion, on acquisition the due was cleared. The company continued to stay committed to the communities of 15 villages in and around Gujarat and participate in lot of sustainability and social initiatives.
 
Mr. Nikita Mazein, Business Development & International Commerce Executive, Rosatom,started by highlightingIndia and Russia relationship that has stood the test of time, especially, sectors like Energy, Defence and Pharmaceuticals.He talked about identifying new ways of cooperation.
 
He urged the two Partners to develop new energy solutions, medical equipment and enhance in health care system, he added.
 
He also talked about how India and Russia should jointly proceed on Nuclear Sphere. Preparing in other business activity like carbon fiber, physical protection equipment, we should look forward various opportunities for expanding our operations, he added. He also discussed how thefuture cooperation will come upon nuclear power, joint development of engineering solutions. India’s competencies like Engineering, IT to be part of such solutions.
 
Dr Ashwin Johar, India-Russia Bilateral Commercial – NITI AAYOG, mentioned that India Russia bilateral relationships cannot be only measured on the terms of economic scale. Economic activities and partnerships have become the central point of developing any kind of relationships. Duringand Post COVID-19, healthcare is the sector which becomes focused on every kind of economic activity right now, he added. Moving ahead with his remarks, he said sharing the strength of both sides will be the ideal mantra for both of the countries to move forward in terms of developing economic relationship.  Russian technology will be helping to build technological infrastructure in India.
 
Ms. Olga Kulikova, All Russia Public Organization, Business Ambassador to India, highlighted the importance ofunderstanding what possibilities are there, what SMEs companies are looking for, what is the interest and what are the possible ways of cooperation.
 
Talking about SMEs sector, these companies really need support so that all the countries, association lead and understand that how important is to make them meet. She further added, “apart from big projects, it is very important to pay attention to SMEs because even during this COVID times, they are the one who suffer the most.  But with correct efforts and help, we wish from the Government that these sectors would be able to revive both the economies”.
 
Concluding her remarks, she said SMEs should meet together with the help of Associations and governmental bodies, because these companies could put their inputs to bilateral trade. Bilateral trade has increased by our mutual cooperation in the SMEs sector.
 
The concluding remarks were givens by Mr.  Deepak Sood the Secretary General of ASSOCHAM.
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