Salman Khurshid, an Indian politician, presently the Cabinet Minister of the Ministry of External Affairs and the Chair of Indo-Russian Inter-Governmental Commission (IRIGC) on trade, economic, scientific, technological, and cultural cooperation.
Investment in Russia a 'high priority' for India - Salman Khurshid
Today, during the intergovernmental commission both sides spoke about significant projects for India and for Russia. From those, what are the most important from the Indian point of view? And are the North-South corridor, Delhi-Mumbai corridor and GLONASS among those projects?
I think the important thing is that this is intergovernmental commission is actually a joint commission and the approach that we have is a collective approach. We look at something that will multiply the impact on both sides. Of course, we may have something to contribute or an opportunity to offer. Russia may have something to contribute in terms technology, in terms of experience or the natural resources.
So, what we’ve looked at is a variety of options and some that will benefit India directly, but obviously will bring benefit for Russia in terms of expansion of its trade and opportunities for its business people. Similarly, we are offering things on which we have made advancement and that could be an important dimension in terms of the living standards in Russia. For instance, pharmaceuticals is an area of strength that we want to offer in both ways, in terms of investments in pharmaceuticals in Russia, joint ventures in Russia and, indeed, export of pharmaceuticals which in terms of labour costs and in terms of a total cost of import provide a competitive advantage in the Russian market. So, that’s one very critical factor.
As far as the industrial corridors are concerned, the Delhi-Mumbai industrial corridor, here Russia has an opportunity to come and establish a full industrial townships that come with a lot of preprogramming and all necessary approvals have already been got by these special purpose vehicles. So, you have a fast track opportunity to establish projects in India that have been selected and in which Russia would have an interest. And, therefore, you would have an integrated industrial township in which it will be easy for people to go from here and establish a footprint. And that is something of interest to us.
What is of interest to us and equally to Russia is our collaboration in peaceful use of nuclear energy, because India has a tremendous appetite interest for energy. One thing is to import that energy, hydrocarbons. And the other one is to find the alternative sources of energy. In terms of our planning we have agreed that we need a higher content of energy that is sourced from nuclear plants. And you know that we have the oldest collaboration with Russia as far as civil nuclear energy is concerned.
Kudankulam Plant, which is the latest, the first reactor has been made critical and very soon it will start producing electricity and go up all the way to 1000 megawatts. The second will go critical in the next six months or so. And then, there is the third and the fourth in the series which we’ve been discussing and we want to move forward now to get into a commercial agreement on the third and the fourth. And of course, the overall issues that need to be discussed every time you move forward, they are fresh issues and part of the experience of the past collaboration that is put into whatever the new arrangement is.
Then, of course, the telecom. We have welcomed the investment made in the Indian telecom sector. There was a little setback and the slowdown in our mobile telecom sector, but Sistema is a very important contribution that has been made to the expansion of telecom. I think we have some other issues which we are addressing. There is also an offer which we would seriously look at, which is a civilian use of an alternative GPS system - GLONASS system. This system is offered to us. There is already an examination of possibilities of collaboration and cooperation in the GLONASS system.
In what way it may be used in India?
It is already featured for the military purposes, but for the civilian purposes – expanding the network of telecommunications and communication technology is where this will come handy. So, we are very seriously looking at this as well.
What about the North-South corridor?
You see, the North-South corridor, in terms of the future of our trade is essential. It is essential for the purposes of cutting down on the time it takes to transport manufactured products from here to India, also the cost of going by a much longer route etc. So, the North-South corridor is in fact both an imperative and it is a great opportunity for times to come. All we need is of course the other countries involved in it. So, what we need is to get them onboard and provide such assistance and persuasion that is called for, because this is a win-win for everyone. This isn’t just for Russia or for India, this is for everybody who participates, including Iran where a segment of 164 kilometers has to be linked and then their port will be used. So, it is a win-win situation for everybody.
We are also hoping, and Russia has indicated its interest in participating in that very ambitious pipeline project called the TAPI project, starting from Turkmenistan and going all the way via Afghanistan and Pakistan to India. This is going to change the landscape of our entire region. And it is absolutely wonderful that Russia has shown an interest of wanting to talk to all the partners of the TAPI project. And in many ways Russia can be a major contributor, whether it is in the building of the pipeline or it is in upstream supplement of the gas that will come from Turkmenistan to India, or indeed in any other way.
Some press agencies reported that Pakistan would not like to participate in TAPI project.
I’ve seen that. I think Pakistan is just as serious as any other partner, because if the pipeline becomes a reality – Pakistan gains enormously. Any pipeline going only up to Pakistan puts the entire cost on Pakistan and there are no other parties to differ the cost or to guarantee the overall viability. If the pipeline comes to India, then obviously you see economies of scale in India’s participation. So, Pakistan has nothing to lose at all. And I think people who are giving out these stories that Pakistan will not be interested are not being fair to anyone, including Pakistan.
Can the route of that pipeline be changed without Pakistan?
This pipeline route can’t be changed, it has to go through Pakistan. And I see no reason why Pakistan would want the pipeline to go through. And perhaps with the pipeline going through Afghanistan and Pakistan there will be much greater economic interdependence between our countries and that perhaps is the best guarantee. Any other pipeline that comes from Oman or an undersea pipeline, or a deep sea pipeline that comes from Iran to India – those are completely different projects far more expensive and difficult to put together. I think the best possibility still remains something like the TAPI pipeline.
Is India optimistic about it?
We are committed. We know that some security issues need to be addressed in Afghanistan and of course we need to have Pakistan on board. But we see no reason why this will not be possible.
What investment from Russia does India expect?
We would be more than willing for any investment that comes from anywhere. I think the modern area, so that it is easy to put a financial project on a project.
And what investment plan is India planning to pursue in Russia?
For India, as I said, this is a high priority. And although there would be a high cost involved in laying of the pipeline, but we will be able to recover that cost very quickly because right now we have to import energy from very distant places and it has to come by ship, there has to be gasification and regasification etc. There are all kinds of costs, visible and invisible, that go into the supply of energy. And of course this will probably be the most cost effective and the most convenient way of getting a permanent source of energy.
As far as TAPI is concerned, what do you expect from Russia?
We are happy to entertain Russia in any way. Interests owned by Russia are extremely welcome. As I said, it can either be an investment on which there would obviously be a return, it could be participation in one way or the other and ultimately this pipeline could go well extend into Russia, because the gas is all in this region.
The Russian gas is all going to Europe. Why should it not come down to the South Asia? And there is always going to be a growing demand for gas. So, why should that gas go only to Europe? Why should it not come to South Asia?
For several years the negotiations on LNG supplies have been taking place between Russia and India. How is that going?
We discussed LNG, it is a positive approach of Russia. And so long as the costing works out, we will be more than happy to receive LNG from Russia.
And the very last question. For many years both India and Russia are speaking about the desire to enlarge the volume of trade and a lot is done. Why it is increasing but slowly? And what is to be done and what is planned to be done?
Unfortunately, the global downturn hit all of us, including Russia and ourselves in the last two years. But our impression and certainly Russia’s impression is that the worst is maybe over and the worldwide economies are now turning. We certainly see that happening as far as India is concerned. And therefore, we can look at more trade now and in the future. I think we’ve had an improved profile of trade despite the downturn in the economies, but nothing like what we deserve and nothing like what we want.
And therefore, both our need and our desire must be reflected over the next few years. And therefore, I believe that the governmental commission that met this year has a very-very important role to play. We worked very hard on various propositions and I hope that they will be given the final stamp of approval by the summit meeting that takes place now a couple of weeks away.
Thank you very much.