Russia & India Report by Russia Beyond

THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

WEDNESDAY, OCTOBER 10, 2012

NEWS IN BRIEF

DIPLOMACY: Pacts on Units III, IV of Kudankulam plant, scaling up trade, defence ties high on agenda

Putin power to light up India ties

Dock trials of Trikand frigate starts in Russia A Talwar class frigate being built for the Indian Navy at the Yantar Shipyard in Russia’s exclave of Kaliningrad has begun dock trials. The Trikand is the last in a series of three frigates built under a $1.6-billion contract with India. The ﬁrst frigate, the Teg, was delivered to India in April 2012, while the second, the Tarkash, has completed sea trials and will be delivered in November. The sea trials of the frigate will be held in the Baltic Sea and the warship is expected to be delivered to the Indian Navy in summer 2013. The new frigates are each armed with eight BrahMos cruise missiles. RIA Novosti

Putin’s visit will help iron out some recent irritants and set the stage for acceleration of bilateral ties in all areas SHWETA CHAND RIBR

ITAR-TASS

INS Vikramaditya to sail to India in July, 2013

The delay in the delivery of INS Vikramaditya, the refurbished aircraft carrier, will be discussed at a meeting of the Russian-Indian Intergovernmental Commission on Military and Technical Cooperation in Delhi on October 15. It will take four to ﬁve months to repair and replace the brickwork that fulﬁls the function of thermal insulation for the steam boilers on the INS Vikramaditya, Igor Leonov, the Sevmash engineer responsible for delivering this ship, told RIBR in an interview. The date for docking the aircraft carrier has been approved for April 25, 2013. According to Leonov, the dry dock inspections will take two months. The ship is set to sail on July 3, 2013. RIBR

AFP/EASTNEWS

mid the shifting regional geopolitics and Moscow’s declared turn to Asia, New Delhi is bracing to roll out the red carpet for Russian President Vladimir Putin, “a special friend of India” towards Octoberend. Putin’s first visit to India in his third presidential tenure is poised to reinvigorate the “special and privileged partnership” between India and Russia and will help iron out some recent irritants in the areas of civil nuclear cooperation, defence and investments. The agenda for the summit will be firmed up during the October 15 talks between External Affairs Minister S.M. Krishna and Russia’s Deputy Prime Minister Dmitry Rogozin who will co-chair the next session of the Indo-Russian Intergovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation. The meeting will ensure that there are no notes of dissonance when Putin sits down for talks with Indian Prime Minister Manmohan Singh in New Delhi on November 1. On top of the agenda will be fast-tracking civil nuclear cooperation, the showpiece of the rejuvenated India-Russia strategic partnership. There is good news on this front: after months of protests by anti-nuclear activists, Unit I of the Kudankulam Nuclear Power Plant (KNPP), with installed capacity of 1000 MW, is poised for operationalisation with the loading of the first fuel rods in the reactor. The summit talks will focus on finding a mutually acceptable deal on the units III and IV of the KNPP, which have become a point of contention, with differences in perception over India’s civil nuclear liability law. Given huge stakes of both countries in the nuclear cooperation, both sides will be looking for a mid-way compromise formula to address mutual concerns. In July, the nuclear officials of India and Russia in Moscow had signed a protocol for Russian funding for units III and IV which envisages Russia extending export $3.4 billion credit. If the liability issues are resolved, a final agreement on Units III and IV could be signed during the visit. Stepping up trade and economic ties to $20 billion by 2015 will be high on the agenda. The two sides will also be looking

Russian President Vladimir Putin, the architect of the India-Russia partnership in the 21st century, is set to cement ties with India. to resolve the Sistema stalemate. Russia will seek concrete assurances over the security of Russian telecom giant Sistema’s $3.1 billion investment in a joint venture in India, which has got endangered by India’s Supreme Court’s order in February cancelling all 122 licences (including that of Sistema Shyam Teleservices) on allegations of bribery and corruption in the allocation of 2G spectrum. The defence ties, the bedrock of the IndiaRussia relationship – Moscow supplies over 60 per cent of India’s military hardware – are poised to get a boost, with the two countries planning to sign a mega deal on a futuristic stealth fifth-generation fighter. If all goes

well, the two sides will ink R&D phase contract for the Fifth Generation Fighter Aircraft project during the visit. Ahead of the summit talks, the defence ministers of the two countries are expected to resolve issues related to yet another delay in the delivery of the refurbished aircraft carrier Admiral Gorshkov, rechristened INS Vikramaditya by the Indian Navy. According to reports in sections of the Russian media, some problems in the boiler of the aircraft carrier have delayed the delivery, expected on Dec 4, to the fall of 2013. India will be pressing Russia to expedite the delivery by April next year. Again, a mid-way compromise will have to be found.

Besides bilateral issues, there will be a cluster of regional and global issues like Afghanistan on the table when Putin meets Manmohan Singh in New Delhi. With the Asia-Pacific region emerging as a new zone of competition among major powers, Putin may announce Russia’s backing for India’s bid to join the Asia Pacific Economic Cooperation (APEC) forum. In the end, Putin, the original architect of the India-Russia strategic partnership in the 21st century, looks set to clear the air on contentious issues and set the stage for an allround acceleration of India-Russia relations in the next few years.

Foreign companies may get Arctic oil licence pie Russia is considering allowing foreign oil companies not only to operate on its Arctic shelf, but also to own licences for exploration in the country’s Arctic waters. The proposal was being discussed in Russia’s Energy Ministry, although no final decision had been taken, citing the country’s Energy Minister Alexander Novak. He stressed that only technologically advanced companies with secure environment-friendly operations, would be allowed to obtain licenses. Earlier this month, the gas major Gazprom delayed the start of production at its Prirazlomnoye field, the first Russian Arctic offshore oil deposit. Itar-Tass

Gazprom, GAIL ink mega Finally, Kudankulam Unit 1 poised LNG contract ENERGY: Fuel rods loaded into the reactor, criticality takes 52 days

Atomic Energy Commission chairman R.K. Sinha is hopeful that the second unit will be operational by first half of 2013, Russian experts see no delays ALEKSANDER YEMELYANENKOV RIBR

he long-awaited step towards operationalising the first reactor of the Russian-designed nuclear power station in Tamil Nadu finally began early morning on September 19 with the loading of the first fuel rods. With this, the landmark atomic energy project, a showpiece of India-Russia bilateral ties, has entered the home stretch. Russia’s Rosatom has played a key role in the construction of Kudankulam Atomic Power Plant. The atomic plant flows from the agreement between the former USSR and India in November 1988 on cooperation in peaceful uses of atomic energy. The Nuclear Power Corporation of India, acting as the customer, was cleared by the national Atomic Energy Regulatory Board in August 2012 for first criticality at unit No.1, incorporating the delivery of fresh nuclear fuel to the reactor. The loading of the first fuel assembly is both significant and symbolic, because starting from this moment, the energy unit acquires the status of a nuclear power plant with all the consequences that come with it,

Kudankulam plant in Tamil Nadu. including the IAEA-defined guarantees and commitments. Once the reactor core has been filled with the required amount of fuel assembly, it will be hermetically sealed, and the reactor control and protection system gear will be installed, that is, the reactor assembly will be complete. Following a series of physical experiments, the reactor will approach the

minimum controlled power level. “A first criticality programme typically takes 52 days,” according to Russian experts, who have been involved in many first launches. “This time is required to check and validate the design characteristics of the active zone. After that, the final phase of the launch process starts – the energy startup.” Atomic Energy Commission chairman R. K. Sinha said recently in Mumbai that he was optimistic that the first unit of KNPP should be operational by the end of the calender year. “The ongoing protests have not stopped the completion of the second unit of 1,000 Mw, which I expect to be operational by the first half of the next year,” he said. The design capacity of the Kudankulam power unit will be actualised only in 2013 because of the suspensions in start-up operations due to protest rallies in and around the site. As for the second energy unit, at the same site, Russian specialists believe that there will be no delays.

Full version at www.indrus.in

Deal worth $1.6-1.8 bn per year, delivery starts in 2019

A ‘super-holding’ ﬁrm for hypersonic missile tech

OLGA MORDYUSHENKO Kommersant

ussian gas giant Gazprom’s subsidiary Gazprom Marketing & Trading (GM&T) has signed one of the biggest LNG supply contracts in its history with India’s Gas Authority of India Limited (GAIL), for 2.5 mtpa (3.5 bn cubic metres annually). The deliveries under the 20-year contract will begin in 2019. At current prices, the contract is valued at $1.6-1.8 bn annually. Gazprom currently has no available LNG volumes but, by the time deliveries are scheduled to start, the monopoly hopes to have at least one of two projects in the Far East up and running – expansion of Sakhalin-2 or construction of a new plant in Vladivostok. In 2011, GM&T signed successive MOUs with four Indian companies for supply of 2.5 mtpa LNG to each of them. Besides GAIL, these included Gujarat State Petroleum Company, Petronet LNG Limited, and Indian Oil Corporation Limited. But the current deal with GAIL is the first hard contract. In 2009 and 2011, Gazprom supplied 650,000 LNG tns to India.

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to be operational by 2012-end

Russia will set up an aerospace ‘super-holding’ company consisting of missile makers NPO Mashinostroyenie and Tactical Missiles Corporation to develop hypersonic weapon technology, Deputy Prime Minister Dmitry Rogozin said last week. “Initially, we are talking about a big ‘superholding’ based on Tactical Missiles Corporation and NPO Mashinostroyenie,” said Rogozin, who oversees Russia’s military-industrial complex. Discussions on the creation of such a super-holding have been underway at least six months, he said. NPO Mashinostroyenie is the Russian partner in the Indo-Russian joint venture Brahmos. RIA Novosti

WEDNESDAY OCTOBER 10, 2012

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PERSPECTIVE

TRENDS: Russia is now a middle-income country with a fast-growing per capital income

Why Pakistan raked up Kashmir at UN

The big shopping surge Oil windfall: The making of Europe’s largest consumer market in everything from cars to diapers BEN ARIS Special to RIBR

CORBIS/FOTO SA

ussia became the biggest market in continental Europe for milk and children’s toys in 2011, with sales estimated to be around $22.7 billion. Next year it’s on course to become the biggest market in Europe for clothes, footwear, accessories and advertising worth $76.8 billion in sales. Russia’s consumer market has reached critical mass and, thanks to steadily rising incomes, the country is poised to become the biggest consumer market for a wide range of products, sometime between now and 2018 when it will simply become the biggest consumer market. “Rising wealth levels over the last decade have turned Russia into a middle-class country for arguably the first time in its history,” says Citigroup’s chief Russian strategist Kingsmill Bond. Russian incomes have gone up 16-fold over the last decade, from an average monthly income of about $50 under Boris Yeltsin to just under $800 under President Vladimir Putin. This figure puts the country into the middle income bracket, according to the last U.N. Development Agency report. If George W. Bush had delivered the same sort of economic surge during his eight years as president, then the US average per capita income would have increased from $35,082 in 2000 to $561,312 by the start of this year. “In 2004, the government made the principle decision to hike taxes on energy and slash them on everything else. Today, Russians enjoy some of the lowest income and corporate taxes in Europe,” says Clemens Grafe, manag-

Shoppers in Moscow ranked 41 globally by a UBS survey. ing director of new market economics for Goldman Sachs in Moscow. Grafe says focusing on the price of oil, which has risen from about $20 in 2007 to close to $100 today is a red herring. The state is using its oil and gas windfall to subsidise the real economy, which

has fuelled a decade-long shopping spree as Russians start to buy all those knick-knacks that simply didn’t exist in the Soviet system. Already the 11th largest consumer market in the world, according to Euromonitor International and in the top two or three for most

sectors in Europe, Russia continues to climb the rankings. GDP will expand by about 3.5% to 4% this year, according to the World Bank. The flood of petrodollars primed the pump and ironically the state’s big presence in the economy provides a very effective “trickle down” mechanism. Russia’s per capita income is the fastest growing of any major emerging market in the world over the last few years. It reached about $21,358 last year (on a purchasing power parity basis) according to the World Bank, well ahead of Brazil ($11,719), China ($8,442) and India ($3,650). The Boston Consulting Group found in its annual wealth report that counting the number of families with assets over $100 million, Russia is already the fourth richest country in the world after the U.S., U.K. and Germany. Estimates of the size of middle class vary widely from 38 million to 86 million, but even with the lower estimates, the number of shoppers is already larger than most Western European countries. Reformed sectors like mobile telephony have exploded, while others that are dominated by a few monopolistic cartels or stymied by regulations trail the rest of Europe badly. Russia has been the biggest market for vodka since they invented the stuff in the ninth century, but the slow progress of financial sector reforms means that it still punches way below its weight for things like insurance, mortgages and pension funds. Shoppers in Moscow were ranked 41st globally in terms of purchasing power, based on a survey by UBS.

M.K. BHADRAKUMAR Foreign policy analyst

A glittering game-changer Super-hard diamonds in Siberia can revolutionise tool-making, drilling ANASTASIYA VEDENEEVA Kommersant

applications, but the thing is that successful crystal synthesis experiments resulted in the appearance of numerous synthetic diamonds with tailor-made properties,” says Goryainov. “When you extract natural diamonds, you can never be sure about the exact properties. The share of natural diamonds in the market for industrial crystals is currently quite insignificant.” Despite the overall industry preference for synthetic diamonds, a few big corporations have expressed an interest in the rediscovered deposit, says Nikolai Pokhilenko, director of the Novosibirsk Institute of Geology and Mineralogy. “They have peculiar properties. They are harder than the ordinary diamonds we all know. They can revolutionise the tool-making industry, drilling, processing, because they are the hardest natural material known. They can

Impact diamonds next big thing? be applied in high-tech industries: electronics, optics, production of highprecision lenses,” adds Pokhilenko. “We see excellent prospects — and some big corporations, such as De Beers and some Chinese companies, have already shown interest.”

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deposit of super-hard diamonds located in an asteroid crater between the Krasnoyarsk Territory in Eastern Siberia and the Republic of Sakha (Yakutia) in the Russian Far East has finally been declassified. The deposit, known as the Popigai Astroblem, was discovered in the 1970s, but Soviet scientists decided to keep the find secret since; according to geologist Alexander Portnov, they did not know the best way to make use of the diamonds. Scientists say that the Popigai Astroblem has enough diamond reserves to meet the world’s industrial demand for the next 3,000 years. Typically, naturally occurring diamonds are not suitable for industrial use because of their unpredictable and non-standard characteristics. However,

experts agree that the unique properties of these diamonds make them suitable for use in high-tech optics and electronics. “Research into impact diamonds had been classified for a very long time, because the reserves are immense, but [Soviet] scientists did not believe they could be used in industry,” says Portnov. “The very possibility of their application in the manufacturing sector is a sensation.” Impact diamonds are created when an object such as a meteor hits an existing diamond deposit. They are known for their large grain size. Industrial use of diamonds amounts to approximately five billion carats, but most of these diamonds are produced artificially, said Sergei Goryainov, an observer at the Rough & Polished information and analysis agency. “Industrial diamonds have multiple

s the Kashmir issue back in the United Nations? The answer is “Yes” and “No”. It might come as a surprise, but last week, Pakistan President Asif Ali Zardari did raise the Kashmir issue in his address at the UN General Assembly. Equally, Indian External Affairs Minister S. M. Krishna responded in kind, but he spoke mildly and more for the purpose of record than taking umbrage at Zardari. Conceivably, Krishna could have added, if he wished to be combative, that the only unresolved issue is the Kashmir one. Or, he could have chided Pakistan to concentrate on the festering wounds in Baluchistan and its “lawless” tribal tracts, or, to train eyes on the recent Afghan demarche at the UN Security Council about its erratic conduct. But he didn’t. Later, Krishna further rounded off any residual cutting edges in his speech. All in all, the Indian response was a calibrated one, keeping in view Zardari’s acute political compulsions of grandstanding at a delicate juncture in Pakistan’s domestic politics when he is at odds with the “deep state” for a variety of reasons. The Pakistani move to rake up Kashmir issue doesn’t help create conducive setting for a visit by Indian Prime Minister Manmohan Singh to Pakistan, which it is apparently keen about. Is there going to be a prime ministerial visit from India in the near future? India’s Army Chief General Bikram Singh’s recent statement underlining the strategic imperative for India to keep its troop deployment on the Saltoro Ridge could have come as a reality check. At any rate, the focus of regional politics isn’t going to be on the Kashmir issue, no matter what Zardari said. Washington lost no time reaffirming its stance on the issue. At any rate, India’s own priorities lie elsewhere, as evident from the extraordinary meeting of the “militant” Kashmiri students and India’s most prominent corporate chieftains that Rahul Gandhi, the son of the ruling coalition chief’s chair Sonia Gandhi and former prime minister Rajiv Gandhi, brought to Srinagar. “What Gandhi has done is not open a window but open a door,” said Ratan Tata, summing up the essence of the new initiative. However, there is a plausible explanation for Zardari’s outburst. Consider the following. The emerging picture is that the US-India strategic partnership is all set for a big acceleration. Amongst other things, the US

has come to share the perception of Indian pundits that Pakistan isn’t going to give away its “strategic assets” in Afghanistan anytime soon. Surely, something has to give way. One possibility is that the NATO packs its bags and troops out of the Hindu Kush with bowed heads. But then, it will also mean the end of the western alliance. Clearly, it is not on the cards. Meanwhile, a strong case can be made that the US thinking is increasingly imbued with a sense of realism. The decision by the George W. Bush administration to participate in the internecine strife (“civil war”) in Afghanistan was a mistake. The Taliban as such never really posed a threat to the US’ national security and Washington acknowledges that it should be left to the Afghans to work out their future political dispensation. On the other hand, it is in the interests of the US and its allies that it remained committed to preventing Afghanistan from becoming a revolving door for international terrorism. For matching these aspirations, the US will strive for a deal with the Taliban as a legitimate Afghan group participating in the

The growing ties between Washington and New Delhi unnerves Pakistan and its ‘deep state’, controlled by the military stabilisation of that country. The fundamental mistake of the 1990s was that the US kept spurning the Taliban’s overtures for a normal relationship and thereby, pushed them into the alQaeda camp, whereas the imperative today is to bring the Taliban into the mainstream political life. Suffice to say, the present stalemate in Afghanistan is a deceptive phase. The move by the Pakistani “deep state” to bring up the Kashmir issue at the UN suggests a degree of nervousness deep down about the shape of things to come in regional security. Simply put, the growing understanding between Washington and New Delhi unnerves Pakistan. Significantly, Zardari’s outburst at the UN headquarters coincided with the 1st meeting of the newly formed USIndian-Afghan “trilateral” in the same city within a week. OPINIONS OF THE AUTHOR ONLY Read the author’s blog at indrus.in

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INNOVATION: To unveil expansion plans on October 15 at India-Russia meeting

GLONASS upbeat about India, opens showroom in Mumbai Russian navigation services provider will explore setting up of emergency response system in India

More Russians are using credit cards. Experts fear this trend may drag clients into a debt trap. ALEXEI KISELYOV Kommersant FM n overwhelming majority of Russians use plastic cards, according to a recent survey by MasterCard. Experts forecast that this trend of using plastic cards will become more widespread in days to come. At the same time, they have apprehensions that the mass use of credit cards may affect payment discipline among clients. Bank cards are not used by a quarter of all Russians, according to the survey. 83% of Russians among them receive their salaries through direct deposit, which must be withdrawn with an A.T.M. card. Additionally, 16% hold credit cards, and 12% of those polled said they had store-specific discount cards. The number of Russians holding bank cards rose by 11% from 2010. They are also becoming more active in their use of debit and credit cards. This year’s poll found that 40% of respondents paid for purchases with plastic cards, as compared to 27% the previous year. When asked why they prefer to pay by bank card, 60% of respondents mentioned convenience, 58% said they liked the security and speed of credit purchases, and 34% cited the advantage of being able to shop for goods and services online. The popularity of bank cards in general bodes well for the future of credit cards in Russia, says Olga Bakhtina, Sberbank’s director of client relations. “A credit card allows a person to proceed without a moment’s hesitation,

AJAY KAMALAKARAN Specially for RIBR

PRESS PHOTO

hen some of the guests invited for NIS GLONASS’ showroom inauguration in the Mumbai suburb of Bandra turned up late due to traffic snarls and non-familiarity with the area, the Russian navigation service provider’s Deputy Chief Designer Igor Kuznetsov joked that it was time for India’s financial capital to start using GLONASS technology. It would be a tall order for the Russian company to fix the traffic woes in Mumbai, but the company has longterm plans in India, a country it identifies as a core market along with Brazil and several African countries. “We have a huge market here, both in terms of commercial markets, individuals and the government,” said Kuznetsov. NIS GLONASS works on every vertical in Russia and would like to have a similar structure in India. “We would like to have our partner-companies, our subsidiaries in each state in India, since each state has a different culture and needs a (partner) company that should be able to provide specialised service there,” Kuznetsov said, adding that local partners would be more adept at solving local problems. NIS GLONASS will be presenting its expansion plans in India at the meeting of the Indo-Russian InterGovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) in New Delhi on Oct 15. The meeting is co-chaired by External Affairs Minister S. M. Krishna and Russian Deputy Prime Minister Dmitry Rogozin. While the main focus for NIS GLONASS would be commercial projects, Kuznetsov said the company was preparing some proposals related to the social sector for the Indian government. The company is also looking to implement a system in India similar to the ERA-GLONASS project in Russia, an accident and emergency response system. Under the project, new motor vehicles sold in Russia will have GLONASS satellite navigation communication terminals. In event of a serious accident, the terminal would automatically be activated and transmit the vehicle’s exact coordinates and other data to an emergency response centre. The public safety answering point operator would then attempt to contact the occupants of the vehicle through the terminal’s hands-free communication system, and proceed to dispatch emergency services. The ERA-GLONASS project is being

Forget cash, plastic is the new currency

A life-sized model of the Glonass-K satellite presented at the Krasnoyarsk Economic Forum.

$215

What’s next? Logistics, infrastructure... The Global Navigation Satellite System, which was officially launched in 1993, is a Russian counterpart to the U.S. Global Positioning System (GPS). It fixes the location and speed of surface, sea and air objects to within an accuracy of one meter. Russia and India have been cooperating on use of GLONASS for more than four years, but Russia has not previously offered equal joint participation in upgrading the system. Right now, the Indian government is quite active in the implementation of

developed on the same lines as the eCall initiative in the European Union. When asked whether it was possible to implement such a project in India, Kuznetsov said besides saving lives, the project would open up several avenues for Indian industry and high tech companies. “Once this project is implemented in Russia from 2014, we expect to save upto 4,000 lives a year,” he said, adding that the number would be higher in India. India is already a user of GLONASS due to a few high-value imports. “The

ITS, Intelligent Transport Systems, in various cities of India, including Delhi, Mumbai, Bangalore and Chandigarh. GLONASS is looking at working on the passenger transport system and passenger information system for buses, including inter-city buses. Another vertical is infrastructure development for companies that have heavy machineries outside cities in very remote areas, where the machinery needs to be managed properly. Another very big but unorganised sector is logistics companies.

billion may reach by 2020 the global GNSS market.

$3,2

without a worry, to have access to a credit account and know only two things: that the credit card bill must be paid on time and that nothing but the card need trouble you,” Bakhtina said. “The use of credit cards will soon overtake the use of debit cards because credit cards are more convenient. It’s my hope that, in two or three years, none of us will be carrying around more cash in our wallets than is necessary to buy lunch.” There is, however, a flip side to this credit cards’ surge. Consumers do not always realistically assess their ability to pay their credit card bill, says Pavel Samiev, deputy director of Expert RA rating agency. Over the past two years, the average sum of a bill paid by credit card has decreased from 2,500 rubles ($82) to 2,200 rubles ($72). “Of late, we’ve been hearing a lot of fairly alarmist forecasts concerning the fast growth of credit card volumes and of retail crediting in general,” said Samiev. “As a rule, retail is a hit with banks. It is the most interesting segment from the point of view of growth potential. But according to some prognoses, this may lead to an abrupt increase in delayed payments and to a substantial deterioration in payment discipline, thereby adding problems to those that still exist in the wake of the financial crisis.” Many experts have blamed the 2008 crisis to the mass issuing of credits and an inability on the part of clients to repay them. However, banks have significantly improved their system for assessing candidates for loans, experts say.

Growth in use of bank cards in Russia

billion worth demand for navigation services is expected in Russia by 2015.

$12

iPhone 4s supports GLONASS technology, so you already use GLONASS in India,” Kuznetsov said. “Every manufacturer of chip sets like Qualcomm, Broadcom, STMicroelectronics, use 2-system chipsets, using both GLONASS and GPS...They already have this in their product line,” according to Kuznetsov. Given the growing market for smartphones in the country, the number of people using GLONASS technology will be spiraling in the near future. The Russian navigation services provider, however, has a tougher task if it wants

billion will be spent by Russia on its Glonass system till 2020.

taxis and even auto rickshaws in Indian cities using its products. Vladimir Finov, who runs the company’s operations, is quick to point out that the very problems that others see in India are in fact opportunities for the Russian navigation services provider. NATALIA MIKHAYLENKO

ARCHITECTURE: Skolkovo’s ﬁrst completed building will wow the world with its use of sustainable technologies and innovative design

The Cube: Welcome to the hottest tech address in Russia M CHOBANOV, T TOROPOVA, A VOSTROV Special to RIBR

ust as the recent opening of the Shard in London triggered waves of excitement, a spanking new glass and concrete structure is set to create a similar sensation in Russia. Known as The Cube, it will be the first building that will be completed by autumn in the 400-acre Skolkovo Innovation Centre, Russia’s Silicon Valley. This eco-friendly high-tech building is a fantasy come true. Inspired by Andrzej Sekuła’s sci-fi thriller Hypercube, the architect Boris Bernaskoni has created a unique building, which epitomises a revolution in office space. There are seven floors, the first of which will feature the reception and cafés. The second floor will have the offices of key Skolkovo partners, which include IBM, Ericsson, Nokia, Intel and Cisco. The third floor will be given over to the companies working on innovation projects with Skolkovo support. The fourth will feature a vast

conference hall. Indeed, the building is intended to be the primary venue for the 2014 G8 summit in Russia. The remaining three floors will most likely accommodate more offices of companies dealing with Skolkovo startups (16 companies have been authorised to have their offices in the building). “The Cube will be of major importance to its tenants and their promotion, as it will essentially be one giant showroom for everyone working there,” says Maxim Kiselev, the chief development officer of the technopark. Eco-efficiency planning is the reigning mantra at Skolkovo. Transport will be dominated by bicycles and electric cars, while green alleys and walkways will be the main thoroughfares. Utilities will be regulated by a single electronic network – developed by Cisco – which is capable of monitoring energy consumption and altering traffic patterns to optimise usage. Jean Pistre, the chairman of the Skolkovo Fund’s construction com-

mittee, says that these innovative features will allow the new city to avoid common urban problems such as traffic congestion, overpopulation and inefficient grid patterns. On top of all this, there will be a single platform for ordering any kind of service or product – from pizza to a doctor’s visit. As the flagship building of Skolkovo, The Cube is suitably packed with ecofriendly, technological solutions with more than half of its energy needs coming from renewable sources. Externally, it is covered on all sides by solar panels, and a stainless-steel mesh front allows the building to be turned into a giant screen for displaying images and messages or advertising. The only external connection is the power line. Solar cell batteries are installed on one wall. Heating is provided by heat-pump units, which use ground energy. There are no ordinary radiators; split systems are installed on ceilings. The water supply is also unconventional: water is pumped

As the flagship building of the Skolkovo Innovation Centre nears completion, RIBR looks at its array of innovative and eco-friendly features.

Office of the future: The Cube will serve as a model for building the Skoklovo ecosytem. from an artesian well and waste water is treated and then used for watering landscaped areas. The windows are huge, thus letting in as much natural light as possible. However, special heat convectors installed in the building create an air curtain that keeps the temperature in the building stable. Waste disposal is another smart solution: all waste is recycled in the building and is transformed into household gas. The interior will consist of easily adjustable panels. Says Anton Yakovenko, general director of the Skolkovo administration: “We have tried to keep it ascetic,

both inside and outside. It is split into clear sections; we decided against fancy finishing.” “It is The Cube that will welcome top-level delegations and individual visitors, including heads of state and representatives of the international investment community. It is an important factor for the residents, as they will be able to meet potential investors,” he says. “The Cube building and Skolkovo’s infrastructure are based on the innovative open space concept, and should become models for building up the Skolkovo ecosystem.”

JEAN PISTRE

Chairman of the Skolkovo fund’s construction panel committee

"Skolkovo will combine lecture halls, research centres and private companies in one place. This simple idea has not been entirely implemented anywhere in the world. It must be at the heart of the new city’s ideology.”

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STYLE: Valentin Yudashkin opened ﬁrst haute couture house in Russia in 1993, his ‘Faberge’ collection left Paris spellbound

An odyssey: Rise and rise of Russia’s famous fashion icon Yudashkin’s clothes are known for quality, original design and refined style, which is often referred to as the “Russian” subtlety. His collections include haute couture and prêt-a-porter garments. ELENA KROVVIDI RIBR

AFP/EASTNEWS

GETTY IMAGES/FOTOBANK

Russia’s iconic designer’s collection is taking the fashion industry by strom Yudashkin’s name became famous all over the world and his fashion shows became part of the annual Haute couture week in Paris. When Yudashkin took his baby steps in the fashion industry, there had

would have been no one to nurture him at that period. The hallmark of the Yudashkin clothes is quality, original design and refined style, which is often referred to as “Russian” subtlety because the couturier never forgets his roots and uses various adornments in his collections to remind of them. Thanks to Yudashkin’s creative approach, the garments adorned with sequins, spangles and beads are taken for “Russian style outfits”. Among Yudashkin’s brand collections, there are haute couture and prêta-porter garments. The latter include men’s and women’s collections as well as jeans and lingerie collections. Yudashkin has also unveiled different collections of jewellery, accessories, perfumes, sunglasses, spectacles, footwear. With such impressive achievements behind him, he celebrated his glittering career and hardwon rise to fame by publishing his own book in 2003. The book encapsulated 15 years of his creative work. He also

He plans to start the ﬁrst Fashion Academy in Russia where students can learn from famous designers. been virtually no practice of creating branded clothes in Russia. The whole notion of haute couture itself was alien to the country. He had to solve many organisational problems whereas in Europe in such situations specialists were invited to handle such issues. So Yudashkin had to constantly multitask while managing his house of fashion and not let this heavy workload take a toll on his creativity at the same time. Otherwise, in case of a crisis, there

Designed for fame, the Master’s ascent

Fashion sparkle at Moscow fest in Delhi

EDUCATION: In 1986, Yudashkin graduated from the Moscow Industrial College, majoring in clothes design and makeup. EXPERIENCE: Yudashkin’s first haute couture presentation was held in 1991. In 1993, Yudashkin opened his fashion house, the first one in Russia to be recognised as a haute couture house. Next year, he launched his prêt-a-porter line. In 1997, Yudahskin received an award

Valentin Yudashkin is going to hold a fashion show on October 28 at the shopping centre DLF EMPORIO in New Delhi during the “Days of Moscow in Delhi” festival, which will be held end of the month. The nuances of his new collection haven’t been revealed yet. But according to the traditions of the renowned couturier, his show is expected to bring a bit of Russia’s flavour to India’s capital. Yudashkin loves all the things Russian – the national dress and colours, history, culture and great personalities. He uses his collections to express that love and to show the world the vast and unexplored richness of his native country.

organised an exhibition where he presented about 200 garments, both Haute Couture and pret-a-porter. A lot of Russian celebrities prefer to buy clothes in Yudashkin’s shops. His brand boutiques are located not only in Moscow, but also in other fashion

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n the fashion world, if you haven’t heard of Valentin Yudashkin, you are not quite there. Known for dressing Raisa Gorbachev, Russia’s iconic designer has imparted a contemporary look to the international fashion world and is the only Russian designer to be honoured with membership in the Syndicate of High Fashion in Paris. The 49-year-old maestro paved the way for the Russian fashion industry when his fashion house was recognised as a House of haute couture in 1993, putting his name in the same league as Gianni Versace and Karl Lagerfeld. It all seems like a fantasy come true. In the early 1980s, Yudashkin couldn’t have even dreamt that he will soar so high in the fashion world. With the eternal deficit of goods in the Soviet era and the fashion business virtually non-existent, his dream of becoming a clothes designer seemed unreal to many. “There was no such specialisation as a fashion designer then but since my very childhood, I’ve enjoyed making costumes,” recalls Yudashkin. As a fresh graduate, Yudashkin inaugurated his own brand called “Vali – Fashion” in Moscow. And in four years’ time, he scaled a new peak in the industry and conquered the fashion capital – Paris. Yudashkin’s first Haute Couture collection called “Faberge” shone at the Paris runways, a spectacular show that instantly made him a global celebrity. As a memory of that milestone collection, one of Yudashkin’s dresses in the shape of a Faberge egg is exhibited in the Louvre. Yudashkin’s first haute couture presentation was held in the building of the Russian embassy in France, which was a risk on the part of the organisers of the show because that was the time of perestroika and hence, the political situation in the country was tense. But the show turned out to be an astonishing success. Yudashkin’s collection left the French connoisseurs of fashion spellbound. The young Russian designer even received congratulations from Pierre Cardin, the French guru in the world of fashion. After this,

for promotion of the Russian fashion at the festival “Master-class” in Saint Petersburg. capitals – New York, Paris and Milan. Apart from being a prolific couturier, Yudashkin dreams of initiating in Russia the first Fashion Academy, where students will have an opportunity to study from illustrious designers, couturiers and stylists.

MUSIC: Impact Fuze will be performing in the Fusion Carnival, a jazz festival, in Bangalore

Rhythms of Moscow create ripples in Delhi PRIYANKA GERA RIBR

lending rock and jazz is not easy, but Impact Fuze, a fantastic band comprising of two Russians and a Frenchman, is enthralling Russians, radiating the energy and intensity of Moscow in their title track. Anton Davidyants (the bassist), Feodor Dosumov (the guitarist) who is originally from Uzbekistan, and French Damien Schmitt (the drummer) vibe perfectly well and their music deftly incorporates “the energy, power and brutality of rock into the intelligence of jazz.” Recently, Sarthak Kaushik, a popular radio jockey of Delhi, discovered their music for his jazz special show on an English music channel. “They are a fantastic band. Their play is highly nuanced. Together, they create very powerful music,” says Sarthak. Impact Fuze will perform in a jazz festival, “The Fusion Carnival”, in

Bangalore next year. They are excited about touring with their music, which they describe as a puzzle of different music styles. Damien is aware of the niche following of jazz in India. “It is fantastic that Indian radio stations play such variety of music. In Europe or USA, our kind of music is not played much. It would be my first time in India and I am looking forward to a firsthand experience of Indian culture.” The album ‘Moscow’ showcases a dazzling variety. “There are up-tempo tracks like Moscow and Punisher as well as mellower ones like Song for Elena and Lost in Found,” says Sarthak. “They’ve straddled an entire progression.” For the title track, they have created a montage of time lapse videos of Moscow. Its skyscrapers and traffic create the feeling of a city constantly on the go. This vision developed when Feodor and Anton saw their own town from Damien’s viewpoint, as he was

PRESS PHOTO

An Indian radio jockey discovers a jazz-rock fusion band comprising of two Russians and a French drummer

‘Impact Fuze’ — a jazz-rock fusion band from Moscow wins the Indian audience.

in Russia for the first time. “Through Damien, we began to understand Moscow all over again. What does the city look like from another angle? What is covered up, what is revealed? Where does it take you by spinning in its circles and roundabouts?” The band quotes the 20th century Russian poet Sergei Yesenin as its credo – “Great things are better seen from a distance.” All it took was a message through Facebook to connect these musicians. Feodor and Anton’s earlier band Alkatrio disbanded in 2009 and they were looking for a new drummer. Anton’s interest in French jazz introduced him to Damien. “In the beginning, it was just an experiment,” recalls Feodor. “We invited Damien to tour with us because he is an exceptional drummer. We enjoyed ourselves so much on that tour that we decided to stick together.” Damien also regards Feodor and Anton highly, “they are one

of the best of the new generation.” The band debuted with a fusion album, knowing that their preferred music style is far from mainstream and rarely gets radio play in Russia. “While performing in Russia, I was surprised to see that the audience was very receptive and they could truly appreciate the music. We even found a producer for a second album. In today’s world people understand Lady Gaga more than Frank Zappa.” With their next album they plan to reach a wider audience. “People need simple and effective melodies with interesting arrangements so that it never becomes tiresome.” For now, Damien is busy with his own album of dubsteppop songs. Feodor is collaborating on this project.

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