Russia and India Business Report by Russia Beyond

in.rbth.com

WEDNESDAY JUNE 3, 2015

Business Report RUSSIA&INDIA THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

NATION: Creating institutions of governance, economic system and multi-ethnic society key milestones

STATISTICS

25 years of post-Soviet Russia: Achievements and challenges

Ruble/Rupee Dollar rates

On June 12, Russia will celebrate the 25th anniversary of the Declaration of Sovereignty of the Russian Soviet Federative Socialist Republic, which initiated the complex process of creating post-Soviet Russian statehood ALEXEY TIMOFEYCHEV RIBR

Strong presidential power According to the analyst, though in the past 25 years, Russia has managed to create institutions of governance and civil society and establish an economic system, the Russian state during that time still did not acquire the necessary stability. According to Shmelev, this is largely due to the fact that Russia has not yet managed to build an effective democratic political system apart from strong presidential power. “What we have is a soft but nevertheless authoritarian regime, we have not developed a system of checks and balances, there is no stable party system, a lot of corruption,” the expert said in an interview with RIBR.

ALEXEY PAVLISHAK / TASS

ssessing the quarter-century-long construction of the Russian statehood, experts have concluded that it has passed the test of time. At the same time, many of them note its contradictory character and a number of challenges, which it has yet to face. Observers note that this is partly due to the ambiguity of the adoption of the document on the sovereignty of Russia in the framework of the Soviet Union, because the Russian Federation was the main supporting structure of the Union which ceased to exist in December 1991. According to Boris Shmelev, the head of the Center for Political Studies of the Institute of Economics, by initiating the collapse of the Soviet Union, the Russian nation actually renounced a part of itself since the Soviet Union also represented a great historical Russia.

Russia Day is celebrated on June 12 every year.

Birth of a new state On June 12, 1990, Russia formally declared its secession from the Soviet Union; the Russian Congress of People’s Deputies, which was then headed by Boris Yeltsin, adopted the Declaration of the State Sovereignty, giving birth to the Russian Federation as an independent state. The document stated the determination to create a democratic state of law within the renewed Soviet Union. The Declaration established the supremacy of the constitution.

Mikhail Remizov, the president of the National Strategy Institute, opined that such a system had its advantages in terms of consolidation of power and overcoming of crises. Noting the generally positive role of the institution of strong presidential power in Russia, the analyst called it the cornerstone that holds the national construction together. Multi-nationality and modernisation Noting the positive role of the Institute of strong presidential power, political scientists underline the weakness of other state institutions, including parliament. In addition, among the vulnerabilities of modern Russian statehood observers point

to ethno-territorial principle of the Russian Federation - the presence of the national republics in its framework. Remizov said that in this respect the course of the Soviet nation-building is continuing - instead of creating a nation as a single political entity, in Russia the multi-ethnic state is being built. “If we talk about the plurality of nations within the country, it means that the country is made up of entities entitled to self-determination, with the ensuing consequences,” the analyst says. In addition to the national structure of the country, another controversial feature connected with the Soviet past is being called. It is believed that the ideology of modern Russia is too focused on nostalgia for the Soviet times. According to Mikhail Vinogradov, the president of the St Petersburg Politics Foundation, it is as if Russia is embarrassed by its current state and tries to strengthen it by seccession from the USSR. “It is a serious risk, because, apart from the history of Rurik [the founder of the ancient Russian state], Russian Federation deprives itself of the feeling of the young country, the historical dynamics of the young country. Meanwhile, those post-Soviet countries, which consider themselves young, show better dynamics,” the expert told RIBR, referring to the success of Kazakhstan and Azerbaijan. At the same time, compared to other post-Soviet countries the Russian state generally looks good. According to Shmelev, the statehood of Russia is a real fact, unlike for example, other countries in the region - Ukraine, Moldova and Kyrgyzstan, whose prospects in this respect are unclear.

Stock Market Index

GDP Growth (annual %)

BRICS states: In Numbers

SECURITY: Enhanced intra-BRICS cooperation in combating terrorism and extremism

‘BRICS need to boost military cooperation’ National Security Advisors of BRICS countries discussed a host of global security threats in Moscow on May 26 YULIA PONOMAREVA RIBR

BRICS was playing an increasingly important role on the international political scene. “It was thanks to the principled stand of Russia and China in the UN Security Council supported by other members of “the five” that foreign military intervention in Syria was prevented, the Syrian chemical stockpiles were eliminated and thus prevented from falling into the hands of terrorists,” he added. According to Patrushev, cooperation within BRICS is aimed at building a multipolar system of international relations based on justice and equality. He added that the BRICS countries were interested in expanding their presence in those regions where integration processes were gaining momentum, where they “do not mix politics and economy and, alternatively, remove all barriers to trade, exchange of technologies and investment.”

ALYONA REPKINA

ussian President Vladimir Putin met the top security officials of the BRICS countries on May 26, and underlined that the meeting was an “important stage of preparation for the BRICS summit in Ufa in July 2015.

“Obviously, for our organisation, for BRICS, it’s an important sphere of activity, considering the challenges the entire international community and our countries have to face at present. It’s obvious that the fight against organised crime, terrorism, financial crime is certainly on the agenda of the international community,” Putin said.

Russian National Security Adviser and Secretary of Russia’s Security Council Nikolai Patrushev hosted the delegates from the five BRICS countries. He stressed that was necessary to build cooperation in the military and technical field and in the fight against terrorism within the BRICS countries. “I am convinced there is a need for increased cooperation between our countries in such areas as military and technical cooperation, joint struggle against terrorism, extremism, separatism, cross-border crime as well as in countering new challenges and threats,” he told the annual meeting. Patrushev noted that BRICS had managed to carve a niche as a reputed international association. Back in 2011, many sceptics “predicted it [“the five”] would be short-lived”, but “the real results of our work have proved to be more convincing than any criticism,” he said. He added that

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Mapping future of US-Russia relations

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FYODOR LUKYANOV Foreign policy analyst

n the wake of US Secretary of State John Kerry’s talks with Russian President Vladimir Putin and Foreign Minister Sergei Lavrov in Sochi and Assistant Secretary Victoria Nuland’s recent trip to Moscow, observers have once again started talking about US-Russian relations, which they had previously all but given up on. But does this really represent a turning point in the strained relationship between Moscow and Washington? First and foremost, we have to remember something that was almost forgotten: Communication between nations is not necessarily about negotiating deals. During the Cold War, the US and the USSR made an effort to maintain contact - but the purpose was not primarily to conclude agreements or resolve specific issues.

There was another, much more vital concern - both parties needed to understand the logic and, if possible, the intentions of the other. From the start of the 1990s, the danger of war was no longer perceived as real, and negotiations were henceforth supposed to deliver tangible results. Nevertheless, the political changes of 2014 and 2015 have proven that the habits and customs of the Cold War era are back. But this time there are no instruments for keeping these in check. The US policy on Russia since Crimea’s absorption into the Russian Federation can be summed up thus: We minimise all communication until the Kremlin changes its behaviour. This policy has not produced any results. The US’ expectations that Russia would change its stance on Ukraine were left unfulfilled. On the other

hand, it became clear that Moscow cannot count on sufficient stability returning to Ukraine against the will of and without the participation of the US. Finally, general tensions began to rise, manifesting themselves in all sorts of unpleasant incidents with Russian and NATO warships and planes. That said, a full-scale Cold War is out of the question: There are still “common challenges” and they are here to stay. For instance, Russia and the US may have different views on the events that are unfolding in the Middle East, but they still agree that ISIS is a menace for both Russians and Americans. US President Barack Obama is entering the final stage of his term, which is the time when presidents tend to mostly think about their legacy. Obama became president in a difficult period in which the deconstruction of the world order was accelerating. Of course, he has not managed to avoid making some mistakes. In this context, it is all the more important for him to focus on those areas in which history can be made. For Obama, this is mostly Iran, and probably Cuba. The completion of the Iranian saga will necessitate hard work on all fronts – the consensus about to be achieved will be fragile, so maximum cooperation is needed from all sides – including Russia. More broadly, President Obama will undoubtedly not want to leave the Middle East in its current chaotic state – and for that he will also need coop-

eration, or at least non-interference, from Russia. Ukraine, on the contrary, does not bode well for his legacy, and Obama understands there will be no rapid advances there. This is why the new stage of U.S.Russia relations (up until 2017) will probably look like this: The parties will establish communication between officials charged with political and military security, to minimise the risk of accidental collisions; they will also exchange views on the situation in the Middle East and elaborate possible common steps. There will be no consensus, but there will also be no explicit confrontation. In Iran, the countries may even work together, and they will not take any drastic measures in Syria. The competing stances on Ukraine will remain the same, but it’s highly likely the parties will try to avoid escalation. The modus vivendi described here does not imply that the rhetoric will become less harsh; rather, the actual reduction of tensions will probably have to be compensated by even more bellicose statements. But overall, this situation may continue until the end of Obama’s presidency. Later on, the situation will depend on many factors, not least of all on the relations of both countries with China.

Read more author’s views at in.rbth.com/opinion

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

E |C |O |N |O |M |Y WEDNESDAY JUNE 03, 2015

ECONOMY: Upswing in retail sales, growth in GDP of around 0.5-1.5 per cent expected in the fourth quarter

NEWS

Autumn lift for economic revival

Russia, India to hold joint naval exercises ‘Indra Navy-2015

VIKTOR ASTAFIEV RIBR

PhosAgro, Indian Potash Ltd sign 1.35 million MT MoU

VADIM ZHERNOV / TASS

Russian fertiliser producer PhosAgro signed a three-year MoU with Indian Potash Ltd for the supply of 1.35 mn tonnes of phosphoric fertiliser over the course of three years, from 2015 to 2018. PhosAgro expects a further increase in the cost of fertilisers in the Indian market from the current level of $485 per tonne. The company expects that this year India will increase its imports by more than 60% to 6.5-7 mn tonnes. RIA Novosti

he worst seems to be over for the Russian economy. Experts forecast brighter days ahead, but not before the autumn. “The acceleration in the decline in Russia’s GDP in March is related to high levels of inflationary pressure and expensive credit, which has a negative effect on the dynamics of the country’s economy,” says Alexei Kozlov, chief analyst at UFS IC. The figures published by Ministry of Economic Development in early May show that in the last year (up to March 2015), GDP fell by 3.4 per cent. Figures for February showed a rate of economic contraction threefold lower: 1.2 per cent year-on-year. The forecast for inflation in 2015 is 11.9 per cent, while the Central Bank’s key rate, which private banks use as a reference point, was 12.5 per cent at the beginning of May. Falling salaries The rate at which real salaries are falling continues to accelerate, ministry figures show. After a 7.4 per cent reduction in February they dropped by another 9.3 per cent in March. In construction, the volume of work in March 2015 fell by 6.7 per cent, which is the worst result since July 2014, according

to a ministry monitoring report. Earlier, the ministry had improved its economic outlook for 2015. Instead of a threepoint fall in GDP, now the economy is expected to shrink by 2.8 per cent. In response to the reduction of real salaries, people have actively begun saving money. According to the Russian Statistics Service, in the first quarter of 2015 Russians spent 78.1 per cent of their earnings on goods and services, while during the same period in 2014 the percentage was 82.3 per cent. Meanwhile, the purchasing of securities doubled in the first quarter of 2014, suggesting that Russians are thinking more about savings and future financial security.

SERGEY BOBYLEV / TASS

After the ruble’s winter fever, the Russian economy looks set for autumn sonata

Russia will hold naval exercises with its key partner in the Asian region – India this year, Colonel Alexander Gordeyev, representative of the Eastern Military District, said recently. “On June 1-4, we will be hosting the ﬁrst planning conference in Vladivostok, to prepare for the joint RussianIndian naval exercises – the Indra Navy-2015,” he said. RIA Novosti

Cyclical pattern Economists believe that the drop in GDP is also due to cyclical problems. “The recession in Russia as a whole resembles more the acceleration of the fall in the final phase of an economic cycle,” says Anton Soroko, an analyst at Finam Investment Holding. In his view, the economy is, firstly, affected by stagnation as a result of falling oil prices. Secondly, the decrease in investment activity is related to the growth of credit costs. Third, the growth of geopolitical risks and instability in the financial markets also influences companies’ investment activity.

After the rouble’s winter fever, the Russian economy may soon be restored to health Russia’s economic recovery will come, but not before the second half of 2015, says Soroko. Autumn upturn Many observers believe that Russia’s economy will continue to contract over the coming months. “The decline in GDP will continue, but not substantially,” says Boris Pivovar, a senior professor in the Department of Economy and Finance at the Russian Presidential Academy of National

the autumn and winter months, a traditional period for commercial revival. He predicts that Russia will see shortterm falls in the first, second and third quarters of 2015, followed by substantial growth in GDP of between 0.5-1.5 per cent in the fourth quarter. Kozlov says that as the ruble continues to stabilise, the spike in consumer prices will slow down and the cost of credit will drop, which will reduce pressure on the economy and bring the dynamics of GDP back into balance.

BUSINESS: Soaring inﬂation, steep rentals and declining purchasing power have impacted restaurant business

In tough times, owners of restaurants learn to reinvent the game LORI/VOSTOCK-PHOTO

The International Yoga Day celebrations will be held in Russia at Moscow’s Sokolniki park on June 21. “The celebration was announced by the UN on India’s initiative and will take place in many countries around the world, including in Russia. We will be holding a large event at Sokolniki park which will witness close to 2000 people,” said India’s Ambassador to Russia P.S. Raghavan during his meeting with Novosibirsk mayor Anatoly Lokot. The idea behind holding such celebrations , he said, was to educate people about the beneﬁts of yoga. RIBR

The economic crisis in Russia is testing survival skills of businessmen and entrepreneurs NIKOLAI GORSHKOV, ELENA KROVVIDI RIBR

nce an ephemeral threat, Russia’s economic crisis has become a serious challenge for small businessmen and entrepreneurs in Moscow over the past several months. Between February and March, Russia’s economy began to contract rapidly, according to numbers from the Ministry of Economic Development and Russian business newspaper RBK Daily. The Daily reported on April 30 that the volume of Russia’s GDP fell by 3.4 per cent year-on-year as of March 2015, compared to the 1.2 per cent the ministry had predicted in February. The ministry’s forecasts for inflation and GDP growth are also fluctuating

dramatically. At the moment, it is predicting 11.9 per cent for 2015. This is just the latest bad news for restaurant owners, who have taken blow after blow, including a ban on imports of food from many countries last August, rising prices demanded by suppliers nervous about entering the Russian market, and restrictions on credit and expensive domestic loans brought about by economic sanctions imposed on Russia by the West. “You have to work much harder now,” Alexei Gisak, co-founder of the pan-Asian fast-food chain Wokker in Moscow, told RIBR. Gisak is keenly feeling the effects of the economic crisis in his business, which is much less stable than it was, he said. Prices have gone up for just about everything, he said. In turn, the increase in sup-

SHUTTERSTOCK/LEGION-MEDIA

International Yoga Day set to attract at least 2000 Russians

Pradyot Mukherjee, owner of “Talk of the Town” has coped with the 1998 and 2008 economic recessions and isn’t intimidated by the current crisis plier prices has forced businesses to choose between absorbing the losses, and raising their own product prices, he said. “We haven’t raised our prices, because purchasing capacity has not increased – it’s dropped,” Gisak said. One of the most painful issues for business owners has been the steep increase in rental rates, which are in some cases directly linked to the dollar exchange rate, and which few business

owners will be able to afford for long at the market value. After entering the market during the previous crisis in 2008, the Wokker chain has thrived, and now operates 23 restaurants in Moscow and eight in other regions. These crises actually prove easier for newcomers to weather, Gisak said. Pradyot Mukherjee, director of Avantage, an Indian pharmaceutical company and owner of “Talk of

INTERVIEW

EXPERT

Symbolism & substance: Why BRICS is important for Russia ALEXANDER GABUEV Senior associate, Carnegie Moscow

Economy and Economics. Oil and gas exports are usually lower in the summer than in the winter months, while current political conditions make it unlikely there will be a surge in sales and contracts, he adds. “The negative trend will change in the autumn and winter, when gas exports will pick up, especially to Ukraine, and construction projects will have finished after the summer season,” Pivovar says. He is also upbeat about retail sales, which traditionally see an upswing in

he BRICS Summit that Russia will be hosting on July 8-10 in Ufa will be the seventh meeting for the organisation since its establishment and the fifth since the four BRIC countries were joined by South Africa. Until recently, the BRIC countries were united only in the fantasy of Goldman Sachs chief Jim O’Neill, who created the acronym in 2001 to define the fastest developing economies in the world and also to offer his clients new investment opportunities. Russia has special relations with BRIC. In 2006, at the initiative of President Vladimir Putin, the first ministerial meeting of the BRIC countries was held in New York. Then, in May 2009, in Yekaterinburg, Putin’s successor Dmitry Medvedev hosted the bloc’s

first summit. This had an important propaganda effect for Russia: relations with the West at the time were at a low and Moscow demonstrated to the US and the EU that it also has other influential partners. For now, BRICS is most famous for its attempt to create an alternative to the Bretton Woods international finance architecture, which is dominated by the West. The countries actively coordinate their positions on these issues in the G20. In 2014, when it finally became clear that the US Congress blocked the IMF reforms approved by the G20 concerning the redistribution of votes in favour of developing countries, BRICS participants agreed to create their own bank and a pool of national currencies. In the future, this

should help reduce the dependence of international finance on the dollar and euro’s duopoly. So far, these have been the BRICS’s main achievements. BRICS is perhaps the only association in which the leaders’ summits do not represent the crowning of the presidency, but rather its beginning. Thus, one country prepares the agenda throughout the year, while another country makes the decisions. Due to the lack of synchronisation many initiatives remained poorly developed. Russia decided to put an end to this. Russia’s presidency formally began in May, that is, the summit will be a threemonth job. China is even luckier: the 2016 summit in China will be the result of a full-fledged year long presidency. Already, Russia is trying to maximally expand the agenda. The Kremlin asked Russia’s federal organs to present their proposals concerning cooperation in the BRICS -- the agenda of the Ufa summit now consists of 130 points! Moreover, as in 2009, in the current international situation it is the symbolism, and not the pragmatism that is

important for Russia. After the annexation of Crimea and the start of the war in eastern Ukraine, the West actively tried to isolate Russia. Sanctions were introduced, Moscow was formally excluded from the Big 8 and leaders from the US, EU and their ally countries tried to avoid personal contact with Vladimir Putin during all international events (in 2014 the Russian president left the G20 Summit in Australia ahead of schedule). The May 9 Victory Day Parade on Red Square became another important symbol of Russia’s international isolation. Now in Ufa the Russian administration will have an opportunity to present the country as a leader of the non-western world. The presidency of the BRICS will allow Moscow to position itself as a participant in an association that is an alternative to the global world order. In the company of the largest economy of the world (by purchasing power parity) and the dynamic leaders of South Asia, Latin America and Africa, Moscow can confidently say that it does not intend to return to the Big 8, even if it is suddenly invited back. Therefore, any practical result at the summit in Ufa will be less significant than the symbolic meaning of the event, since the creation of new ideas has for now been the only field where the BRICS was able to prove itself.

the Town,” an Indian restaurant in Moscow, chose to see an opportunity in this crisis. He said that when the crisis struck Russia, the Indian market in general gained a chance to develop. Because of the currency devaluation, the price for the European products went up significantly. So many preferred to convert to some Indian brands. He admitted that his company had to go through a difficult period of time due to the currency devaluation. He pointed out that since the buying capacity of Russians has gone down, Avantage faced a fall in sales in the first quarter of this year. In March the situation began to stabilise, he pointed out. With the restaurant, Mukherjee said that he didn’t raise prices as the incomes were stagnating. In the end, he had to choose between the two ways to handle a recession: to minimise expenditure or earn more. He chose the second option - to expand his business, even though it is a riskier path in a crisis situation. Mukherjee added that the crisis has actually prompted him to diversify his business and to open new avenues, which he hasn’t specified yet.The crisis has also made investing in property an attractive option as property prices have gone down in Russia.

GEORGY TOLORAYA

How BRICS will shape global system by 2025 The Ufa summit, in the midst of Moscow-West standoff, will bolster Russia’s global position NIKOLAY SURKOV RIBR

cademics from the five BRICS countries have agreed on a long-term strategy for the development of BRICS, which focuses on common positions on global financial architecture, peace and security, sustainable development. This document will be presented to the leaders in Ufa through Brazilian sherpa, said Georgy Toloraya, Executive Director of the Russian National Committee for BRICS Research, in an interview with RIBR. Taking into account the strengthening of the political component of BRICS activities, what can we expect in 2025? The Russian Sherpa - Deputy Foreign Minister Sergey Ryabkov - warned against perceiving the BRICS as an organisation. But the Russian experts believe that the BRICS should still move towards institutionalisation. The coor-

dinative component of this association should be stronger, because only this way we can solve problems, instead of just exchanging views.I think that by 2025, the BRICS will significantly increase its share in the world economy and trade. A new global financial system, compared with the current situation, will be created. Or maybe even its own financial system, allowing the economies to support each other. What is the importance of the upcoming summit in Ufa? For Russia, it is important because it takes place in the context of growing confrontation with the West. And the very fact of the meeting will strengthen our international position. It is important that the economic strategy will be agreed on, including the setting up of a new Development Bank, the currency pool, and the already created virtual secretariat, which initiates the institutionalisation of the BRICS.

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

D |E |F |E |N |C |E WEDNESDAY JUNE 3, 2015

DEFENCE: Kamov looks set to replace Cheetah and Chetak copters used by the Indian Army

SECURITY: Russia’s Malachite ready for partnership

Talks are continuing on manufacturing Ka-226T helicopters in India through a JV between Rosoboronexport, Russian Helicopters and HAL

under 100 per cent transfer of technology arrangement. Sources added that the Indian Navy’s plan to procure over 100 Naval Utility Helicopters is on track and is a separate process for which the Request for Proposal is in the last stage of finalisation. India has a fleet of Kamov Ka-28 anti-submarine warfare (ASW) helicopters and Ka-31 radar picket helicopters, but many of the former are in need of an upgrade. The INS Vikramaditya carries six Ka-28s and Ka-31s. When the aircraft carrier was handed over to the Indian Navy in November 2013, Russian Deputy Prime Minister Dmitry Rogozin first suggested that the two countries consider the possibility of setting up a joint venture to assemble Kamov helicopters in India. Rogozin said that initially, when India announced a tender for helicopters of this kind, the main competitor to the Russian helicopter was the ‘Eurocopter’. But the Ka-226T helicopter’s unique characteristics and particular Indian requirements forced the Indian defence ministry to cancel the tender and decide to produce the Russian copters in India. Kamov Chief Designer Sergei Mikheyev said the company is ready to jointly supply modern sea-borne helicopters for the Indian Navy on request. “Upon request from the Indian Navy, we are ready to supply jointly with Russian Helicopters the necessary number of seaborne helicopters and offer the latest technology to the Indian side, including the Ka-52K helicopters,” Mikheyev said. Andrey Frolov, chief editor of ‘Arms Export’ magazine, said India’s decision to purchase the ‘Kamov’ helicopters a landmark event. He noted that India is purchasing a small series product.

ALESSANDRO BELLI Specially for RIBR

PRESS PHOTO

The Ka-226T is a versatile helicopter which can be adapted to multiple uses. agreement is reached”. “HAL is the front-runner as of now. Talks would be held now to finalise the contract and work out the modalities,” the military source said.

Media reports said the helicopters would be manufactured in India under 100 percent transfer of technology arrangement The light multipurpose Ka-226T helicopter is equipped with two Arrius 2G1 engines made by the Turbomeca Company. The use of Ka-226T coaxial rotor and the original layout of the fuselage give it significant advantages

in capacity, simplicity and ease of piloting. As compared with the helicopters of a traditional single main rotor/tail rotor configuration, the Ka-226T helicopter has a number of advantages due to its coaxial configuration and specific layout. The passenger version of this aircraft can carry up to seven people, while the transport version can carry one tonne of cargo inside the fuselage or via an external sling. For transportation of oversized cargo, a high-capacity cargo platform can be installed instead of the regular transport cabin. This aircraft is scheduled to replace the Cheetah and Chetak helicopters currently being used by the Indian Army. Media reports also said the helicopters would be manufactured in India

JV planned for making nuclear submarines Indian, Russian companies explore tie-up to build nuclear submarines and invisible ships ANTON MARDASOV svpressa.ru

eliance Infrastructure is looking for a Russian partner to launch a joint venture for the construction of nuclear submarines and ships with stealth technology, says a report in an Indian business daily. According to the report published in the Economic Times on May 22, the company’s top managers have already met in Moscow with senior representatives of the Defence Ministry. The source close to the negotiations informed that they can visit and meet Defence Minister Sergey Shoigu and name a potential Russian partner, featuring the necessary technological expertise. According to portal Lenta.ru, the Russian design bureau “Malachite” (which built the new submarines under Project 885 Yasen) announced that with the approval of the government it was ready to participate in this project. “Our design bureau has all the necessary competences and resources. Our bureau designed the ship, which is currently leased by India,” the portal quoted the Malachite rep-

resentative as saying. Till this date, Russia never sold nuclear submarines to India, but only gave the submarines on lease or for rent, said Alexander Khramchikhin, Deputy Director of the Institute of Political and Military Analysis. The K-152 submarine “Nerpa” of third-generation of Project 971 Schuka-B is now in service with the Indian Navy under the lease contract. In January 2015, the media reported that New Delhi would also lease the second nuclear submarine - the Project 971 ship K-322 Kashalot. “I do not think it will be a sensitive issue to us to transfer technology for the construction of submarines with nuclear propulsion. They build their nuclear submarines with SLBMs, such as, for instance, the INS Arihant type with missiles K-15 Sagarika. Therefore, one shouldn’t completely rule out the Russian-Indian arrangement in the field of submarines,” he said. We may be interested in building surface ships and submarines on the Indian shipyards, especially considering that the Indians build their own subs,” he said.

TECHNOLOGY: Around $700 million invested, plan to open 25 factories

Indo-Russian nuclear venture to help farmers Rosatom and Hindustan Agro have have forged joint venture for storage of agricultural products

REUTERS

he Ka-226T ‘Kamov’ helicopters could be manufactured in India through a joint-venture enterprise, owned by Rosoboronexport, Russian Helicopters, and Hindustan Aeronautics Limited (HAL). “We are talking here about the production of at least 400 helicopters over the next 10 years, including some for export to third countries,” an Indian military source told RIBR. According to PTI News Agency, in midMay the Indian government’s Defence Acquisition Council (DAC) has given an initial clearance for around 200 helicopters, and state-run HAL is a “frontrunner” for partnering with Russia. India’s Ambassador to Russia Pundi Srinivasan Raghavan confirmed that Russia and India are discussing the parameters of a project that will allow India to acquire 197 Russian Kamov Ka-226T helicopters. “I received a phone call from India and we discussed the negotiations that are being held as part of this project. We cannot say today when exactly this contract will be signed because the Russian side first needs to prepare a business plan and agree upon all technical parameters. But we know that it will be a bilateral Russian-Indian project,” the diplomat said at a press conference at the Interfax-Siberia press center on May 22. He added that negotiations are going on very well, but they are not over yet. The source declined to specify the cost per manufactured aircraft, saying “this will be determined when the final

Plan for Russia, India to produce Kamov copters

ANDREI RETINGER RIBR

Power of isotopes

Russian state nuclear corporation Rosatom and Hindustan Agro have established a joint enterprise for the production and storage of agricultural products irradiated by isotopes: vegetables, fruits, cereals, and legumes. Radiation technologies will help save crops even during periods of draught. The two sides have invested around Rs 40-45 billion rupees (approximately $700 million) in this joint venture. The companies plan to open 25 factories for the irradiation of food products with low doses of cobalt-60 over the next five years. It is planned to locate refrigeration capacity in India, Mauritius, the Near East, and Malaysia. According to Anil Kakodkar, the former head of the Atomic Energy Commission of India, isotope production essentially increases the shelf life of perishable food products, which makes it possible for farmers to enhance their presence in the market and balance out prices. “Such technologies

Isotope sterilisation technologies have been used for decades, not only in Russia, but also in another 40 countries. The Russian nuclear sector supplies international customers with isotope products that are used in such equipment. Russia also exports medical isotopes that are used for the early diagnosis of diseases in 30 countries, including the USA, Great Britain, Australia, China, South Africa, and Brazil. At the same time, it should be noted that competition in this market is quite strong – as many developed countries also have isotope production sectors. Gamma rays help not only to preserve food, but also ancient books and archival documents.

are especially needed in Indian horticulture where there are serious price spikes,” he said. Experts have found out that the isotope processing of agricultural produce significantly increases yields and

protects it from destruction. Isotope sterilisation technology has been used all over the world for dozens of years. Irradiated objects, including produce, do not become radioactive and they can be used immediately after the process. Usually, products that are grown are irradiated by isotope sources; for example, grains, spices, dried herbs, potatoes, and other root vegetables. After such treatment, the products can be stored for a very long time and do not spoil. At one time in Uruguay there were tests on isotope processing for potatoes that showed successful results. As an example, the installation for the radiation processing of products in local conditions is costeffective if it processes 25,000 tonnes of potatoes and 5,000 tonnes of garlic per year. In Italy, industrial installations have long been in operation for irradiating potatoes and garlic. Russian nuclear specialists supply isotope products for such installations for international clients, including in the US, Europe, and Latin America. “Produce and, above all, herbs simply must be processed because when they are collected, dried, and packed, the fact that dangerous bacteria or fungi can affect them is colossal,” says Alexei Chasovskikh, the head of the laboratory of the division of radiation technologies and equipment of NIITFA. In 2009, a project began in Russia to irradiate grain seeds with gamma rays. During the course of the experiment, 120 tonnes of seed material was irradiated, which after being planted yielded 20 per cent more than conventional seeds, and this is not even the limit. “This method, long applied in developing countries, can ensure a rich harvest even during abnormal draught,” says Aleksandr Uvarov, an independent expert. The expert also points out that that technology is absolutely safe, as it is approved by the World Health Organisation, the International Atomic nergy Agency, and the UNFAO.

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

E |D |U |C |A |T |I |O |N WEDNESDAY JUNE 3, 2015

EDUCATION: Indian students ﬂock to Russia; diversify from medicine to IT, management, aircraft engineering, and oil and gas

Russia Opportunity for Indian students Specially for RIBR

ussia is re-emerging as a favourite destination for Indian students. Around 5,000 Indian students currently study in Russia. The number of students travelling to Russia for the first time comprises almost 2000 people, showing a growth of about 20 per cent. “This rate of growth is continuing and we are extremely satisfied”, said Sayed Kamruzzaman, Head of Rus Education (India), an organisation that sends Indian students to study in Russia. Traditionally, up to 90 per cent of Indian students go to Russia to study at medical institutions. This year has, however, revealed a surge in the popularity of other specialities. “These include IT, management, aircraft engineering, and oil and gas related fields”, he said. The most popular Russian university for Indian students has been the Tver State Medical Academy. Around 800 Indians study there; they have their own community and vegetarian café in the dormitory, and hold the largest festival of Indian culture in Russia. Kamruzzaman is convinced that Russian universities “are global leaders in terms of price and quality of education”. At the same time, Europe, in his opinion “as before, remains more popular from the point of view of students travelling there, expecting to find work and remaining there to live”. “Less than one per cent of graduates remain to live in Russia,” he adds. “In addition to salaries being lower than in Europe, Indians traditionally look for the presence of an Indian community in the area. There is no full-fledged Indian community in Russia, if you do not take into consideration the student community in Tver.” Accent on BRICS Viktor Katochkov, the pro-rector for international activities at South Ural State University, where 2,000 people out of the 50,000 students are foreigners, said he has plans to increase the number of foreign students gradually from five per cent to ten per cent. So far, the annual increase is around 500

foreign students. “At the moment we have students from 36 countries studying with us,” he said. “I believe that the BRICS (Brazil, Russia, India, China, South Africa) countries are very promising in terms of attracting students, and also, generally, the idea of establishing a Network University for this group, which will provide assistance from leading educational centres from Brazil, Russia, India, China and South Africa,” Katochkov said. A decision has already been made to establish a BRICS Universities League, which the top five universities of each country can join. Answering a question about advantages of Russia’s provinces in comparison with Moscow, Katochkov explained that, as was previously the case, they have lower educational fees associated with a lower level of salary, meaning that universities are unable to increase charges for education. “We have conducted a study and calculated that, as a whole, life and study in the provinces is 2.5 times cheaper for a student than in Moscow”, he said. These figures are also confirmed by representatives of the Ural Federal University, which is currently home to more than 30,000 students from 60

at the RIOU. “Our first graduate from India already works in New Delhi, and our student has already received a job offer from the United Kingdom”.

Awareness holds the key ELENA KROVVIDI

Destination: Provinces Twelve universities participated in the “It is Time to Study in Russia-2015” exhibition. These included the People’s Friendship University of Russia, Tver State Medical Academy, Volgograd State Medical University, Kazan State Medical University, Kazan Federal University, Russian International Olympic University, Ural Federal University, Far Eastern Federal University, South Ural State University, Bashkir State Medical University and Orenburg State Medical University. Besides Delhi, representatives from these universities travelled to Chennai, Mumbai, Ahmedabad, Kolkata and Imphal. The last city is the administrative centre of Manipur state, and is a new destination. Earlier, India’s northeast region had not received the attention of Russian universities. During the second phase of the exhibition, they might also visit Hyderabad and Bangalore.

Universities in Russian regions attract foreign students with their individual approach and lower education fees countries. Another advantage of the provinces is what experts call “the uniqueness of every foreign student, whom many lecturers treat, as in former times, as their own children”. The Russian International Olympic University (RIOU) is offering its new programme, Master of Sports Administration, which was launched in 2013. It already has one graduate and one student from India. “The programme is designed for 10 months,” said Iya Makharadze, a senior specialist

step to facilitate the greater student exchange between the countries. And last but not the least, publicity is essential to spread awareness for the Indian youth about the education opportunities in Russia. “When young Indians contemplate studying in Russia, they think of the problems of language, they don’t know the costs, they don’t understand that actually in terms of money it is quite competitive with Western countries. Advanced outreach publicity must be done to educate the Indian youth about opportunities,” said Unnikrishnan. Also, Unnikrishnan noted that even those who know look at it as their second option after the US, UK, Australia and New Zealand. And they do it not just because of language. Many Indian students study in Germany and France, where English is a problem also. That is unfortunately partly due to media perceptions that after the collapse of the Soviet Union, the education level in Russia sank.

RIBR

t the 7th BRICS Academic forum held in Moscow on May 21-23, the issue of IndoRussian cooperation in the sphere of education was an important question on the agenda. Nandan Unnikrishnan, VicePresident of Observer Research Foundation (ORF), underlined that bilateral exchange in this domain is definitely well below its potential. Introducing courses conducted in English is an important initiative that the Russian colleges should take if they are interested in increasing the flow of students from India. Creating a larger number of scholarships would also help to attract more Indian students to Russia since higher education is no longer free of charge for foreigners as it used to be in the USSR. Mutual recognition of university certificates is another

ARTS:She was gifted with passion DPA/VOSTOCK-PHOTO

Maya: Timeless dance of Russian prima ballerina RIBR

aya Plisetskaya, the Soviet ballet’s legend who died in Munich aged 89, captivated generations with her stunning leaps and much celebrated style. The news of her death, which came from Germany, where Plisetskaya had gone to for medical treatment, was like a bombshell. Plisetskaya was unique and inimitable on stage and that was the way she remained till her last public appearance. Maya decided to become a ballet dancer when she was a little girl. Her father served as the Soviet consul general in Spitsbergen, which made systematic training difficult. Yet, despite her family’s travels and later political reprisals (Maya’s father was executed during Stalin’s purges), she managed to train as a ballet dancer, with the final years of

her training during World War II. During the war years of hunger and deprivation, ballet lovers were prepared to pay their last remaining money for a ticket to “Don Quixote” in which the 17-year-old Plisetskaya had a minute-long variation at the end of the four-hour-long ballet. And she captivated the audience by her powerful leaps, which made it look as if she was flying above the stage. Unusually tall by the ballet standards of the time (165 cm) and with a perfectly proportioned body, Plisetskaya had a unique set of qualities: excellent coordination, extraordinary leaps, dynamic turns and gigantic steps. And yet, the most important thing was that Plisetskaya, who was the niece of Bolshoi ballet stars Asaf and Sulamith Messerer, had the main principle of Moscow ballet school in her blood: dancing, as well as leaps, were born not in muscles, not out of physical characteristics but out of one’s char-

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Ruble devaluation has made tours to Russia more affordable; strict visa policy still a stumbling block RIBR

ANNA GALAYDA

acter and spirit. It was her character that was Maya’s main gift and allowed Maya to establish herself and to stand her ground in Bolshoi Theater. Her very first trip to the West, the Bolshoi tour of the USA in 1959, propelled her to stardom. Outside the stage, contemporaries were astonished by her openness and recklessness. . The director of the Paris Opera Ballet, Serge Lifar, who belonged to the Russian and French cultural traditions at the same time, wrote: “Maya is a wonderful daughter of Terpsichore. I am enchanted by her art, by her unforgettable performance of ‘The

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Dying Swan’.” Plisetskaya’s character ensured not only that she was able to get to know Western ballet but also that she managed to obtain permission to perform ballets choreographed by Maurice Béjart, which were not in favour in the USSR. Till her dying day, she continued to perform on the stage: for Plisetskaya, dancing was not an occupation, it was a state of her soul, which her body always enabled her to express. That is why those who have seen Plisetskaya perform and those who have only heard of her will forever think of her as dancing on stage.

“This is particularly true in modern areas like computer science and engineering,” Unnikrishnan emphasised. “No one associates Russia with those areas, only the West. That’s why it’s important to publicise this information so that the Indian youth know that Russian education is good and that it’s available.“ Unnikrishnan also stressed that there are still stereotypes about Russia like political problems and instability that need to be challenged. “Russia is a different country,” he added.

Russia ranks 45th in global tourism report DMITRY LATOVKIN

Maya Plisetskaya learnt ballet as a little girl, and performed till 83

REUTERS

ALESSANDRO BELLI

PRESS PHOTO

“It is time to study in Russia” is the new mantra for Indian students looking for new options

ussia has been ranked 45th in the 2015 edition of the biennial Travel & Tourism Competitiveness Report, improving its performance by 18 points from its 2013 ranking of 63rd. The report, which features the latest iteration of the Travel & Tourism Competitiveness Index (TTCI), was published on May 6. The ranking, which includes 141 countries, is compiled by the World Economic Forum and Strategy Partners Group. It assesses “the set of factors and policies that enable the sustainable development of the travel & tourism (T&T) sector, which in turn, contributes to the development and competitiveness of a country.” Tours to Russia have become more affordable following the recent devaluation of the ruble – the value of the national currency against the US dollar has fallen by 44 per cent since May 2014. As a result, accommodation in hotels has become markedly cheaper. One of the major drawbacks is the strict visa requirements for foreign-

MISSION BRAHMOS: HOW INDIA GOT THE WORLD’S MOST POWERFUL CRUISE MISSILE IN.RBTH.COM/ DEFENCE-AND-SECURITY

ers (120th), trailing behind the likes of Vietnam (115th) and Suriname (119th). The ranking’s compilers were also disturbed by Russia’s poor business climate; in this area, the country ranked 109th. “The potential impact of current macro-economic and geopolitical factors can be assessed only on the results of the next ranking and the position of Russia,” Strategy Partners Group partner Alexei Prazdnichnykh said. According to WEF estimates, 28.4 million international arrivals were registered in Russia in 2013. Each visitor spent an average of $423 in Russia, contributing around $11.98 billion. According to the Federal Agency for Tourism, in 2014, the number of inbound trips to Russia amounted to 25.4 million (10 per cent less than in 2013). However, the total number of foreign tourists arriving in Russia amounted to just 2.6 million (the number of tourist visas issued), which is three per cent less than in 2013. Tour operators began to register a sharp drop in interest in travelling to Russia among foreigners at the end of 2014. But market participants are now giving more optimistic forecasts.

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