Russia and India Business Report by Russia Beyond

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WEDNESDAY NOVEMBER 12, 2014

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

DIPLOMACY: Boost for Make in India initiative as Russian companies plan joint manfucturing of aircraft, helicopters

Agenda set for ﬁrst Putin-Modi summit, economic pacts likely

STATISTICS Ruble/Rupee dollar rates

India’s External Affairs Minister Sushma Swaraj and Russia’s Deputy PM Dmitry Rogozin held preparatory talks in New Delhi to firm up an ambitious multi-pronged agenda for the annual Indo-Russian summit in December. AJAY KAMALAKARAN

from Russia to India. “My colleagues and I have agreed that we would take the final step in creating a working group to study the possibility of supplying hydrocarbons overland from Russia through Central Asia to India,” Russian Deputy Energy Minister Yuri Sentyurin told RIBR. “This is a fundamental and very important decision – the concept of the future,” he added.

RIBR

AFP/EASTNEWS

slew of bilateral economic agreements should be ready when Russian President Vladimir Putin visits India in early December for the 15th annual IndiaRussia bilateral summit. On November 5, Indian External Affairs Minister Sushma Swaraj and Russian Deputy Prime Minister Dmitry Rogozin co-chaired the Indo-Russian Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) meeting, which oversees 20 working groups. At the meeting, the two sides agreed to create a joint study group for the proposed Free Trade Agreement between India and the Customs Union of Russia, Belarus and Kazakhstan, which would cover goods, services and investments. Two of India’s Prime Minister Narendra Modi’s pet projects are also likely to see Russian participation. Sistema is keen on establishing a ‘Smart City’ in India and Russia’s state-run enterprises are likely to be involved in joint manufacturing of aircraft and helicopters in India, under the ‘Make in India’ initiative. The meeting also moved ahead proposals on the manufacture of lighting equipment for general and special purpose in Karnataka by Russia’s MGK Lighting technologie, and joint cooperation between India’s National Mineral Development Corporation (NMDC) and the Russian company ACRON for the development of potassium and magnesium deposits in Russia.

Russian President Vladimir Putin will visit India next month for the 15th annual bilateral summit, held for the first time with new Indian Prime-Minister Narendra Modi.

Neither side revealed whether any progress was made on the revision of the 20year old Indo-Russian Bilateral Investment Promotion and Protection Agreement. Russia wants the agreement to be suitably amended with unambiguous safeguards to

protect its large scale investments, particularly in the telecom sector, in India. Ahead of the IRIGC-TEC meeting, the Indo-Russian Working Group on Energy and Energy Efficiency met and discussed the construction of oil and gas pipelines

Trade and Investment Forum Rogozin also co-chaired the eighth IndiaRussia Forum for Trade and Investments, with India’s Minister of State for Commerce and Industries Nirmala Sitharaman. Inviting Russian companies to participate in the ‘Make in India’ initiative, Sitharaman said manufacturing will be “the next buzz” in India. Coupling the technology that Russia can offer and blending that with Indian entrepreneurship, along with the new government’s business-friendly policies, would prove to be mutually beneficial, she added. The interactions, India’s external affairs ministry said, served to review the preparations for the forthcoming visit of Russian President Putin to India for the 15th IndiaRussia annual summit. Rogozin also met India’s Prime Minister Narendra Modi, with the latter conveying that his country attaches very high importance to the special strategic partnership with Russia. Russian Foreign Minister Sergey Lavrov is expected in India before the summit to firm up common positions on international issues, including the crisis in Ukraine and the subsequent East-West standoff.

Stock Market Index

Oil price and dollar to ruble exchange rates

FIGURE IT OUT:: Why is the rouble value falling?

Weak rouble, falling oil price: Will it work? The depreciating rouble helps Russian exporters, but it’s bad news for people as they pay more for food. MARIA KARNAUKH, ALEXEI LOSSAN RIBR

nother record fall in oil prices hits the Russian budget. The situation is ameliorated only by the fast-dropping value of the rouble, which is boosting export revenues. Experts believe that in the worst case, the Russian currency could fall further. Oil prices continue to drop. On October 16, Brent crude, on which the price of Russian Urals export oil depends, fell on international markets to below $83 a barrel. In the past three months, the price has fallen 24 percent from $108.77 a barrel. It is the sharpest drop since the 2008 crisis, when oil prices shrunk to a record low of $38.40 a

barrel. This time, according to estimates, the price could go as low as $80-$72 a barrel. Mikhail Krutikhin, a partner at RusEnergy Consulting, believes that if the government lowers taxes on mineral extraction, oil companies will be able to make profits even with lower oil prices. He is also sceptical about oil prices fallling below $80. The devaluation of the rouble can partly compensate for the fall in oil prices. Since the beginning of 2014, the rouble has dropped by 25 percent against the dollar, and 11 percent against the euro. “A one-dollar decline in oil prices results in a drop of 70 billion roubles in revenue for the Russian budget, while a one rouble fall in the exchange rate adds a total of 180-200 billion roubles,” says Russian Finance Minister Anton Siluanov.

A LOOK AT THE CHALLENGES FACING MOSCOW

“The weakening of the rouble is beneficial for the budget, since its main revenue source (52-55 percent, depending on the estimate) is export,” says Sergei Khestanov, head of Alor Brokerage. There is an increase in currency rescue, which improves exporters’ profitability and balances the budget. As a result, we see a surplus: budget revenues outweigh expenditures.” Although the government benefits from the rouble’s devaluation, the people generally do not. According to experts, about 3040 percent of the Russian consumer basket consists of imported goods. “A 20 percent devaluation of the rouble (in relation to the dollar) increases the cost of food by 30 percent,” explains Khestanov. Furthermore, the lower the level of income, the greater the proportion spent on food. But Russia’s middle classes are also beginning to feel the impact of the rouble’s decline.

So, is the worse yet to come? According to Alexei Kozlov, senior analyst of UFC IC, supporting the rouble is only possible by increasing the attractiveness of the Russian economy for investors, thereby reducing the high level of capital flight. “The Russian economy overwhelmingly depends on the price of oil, growth rates and inflation. If these factors are stabilised, the depreciation of the Russian currency will also be stabilised,” he says. Meanwhile, the Russian Central Bank believes oil prices will not drop below $80 per barrel up to 2017, the bank said in a statement Monday. The Bank’s base scenario suggests that oil prices will reach $95 per barrel in 2015 and will be corrected to $92 per barrel by 2017. “The Russian economy will be stable even if the price of oil remains at $80 per barrel throughout 2015-2017 and [western] sanctions are not reversed,” Central Bank First Deputy Chair Kseniya Yudayeva said.

Why Russia, NATO are always sparring

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NATALIA MIKHAYLENKO

THE BIG PICTURE

ANDREY SUSHENTSOV Foreign policy analyst

Now available on

POLL: Will further slide of rouble impact you?

he debate over European security turns on the different ways Russia and the West interpret the NATO’s expansion. These interpretations are rooted in the different ways they view the end of the Cold War. According to Russian leaders, the Cold War ended as a result of the joint efforts of the Soviet Union and the US in the late 1980s to move from a relationship based on confrontation to one focused on cooperation. The Russians expected the two sides would jointly determine the future of the areas where their interests overlapped, primarily European security. The main issue to be decided was the future of NATO, which had been established as a counterbalance to the Soviet Union. In the late 1980s, during talks on the future of Germany, the subject

of how the German reunification would affect the NATO was frequently discussed. The Soviet Union agreed not to oppose the German reunification and NATO member states agreed not to deploy the alliance’s military infrastructure in East Germany – an agreement they honour still. However, there was much debate as to whether the deal not to expand eastward would apply only to East Germany or to Eastern Europe. According to the personal notes of US Secretary of State James Baker, it was discussed in a conversation with Soviet leader Mikhail Gorbachev in Moscow in February 1990. But Baker’s notes are inconclusive as to how the parties left the issue. What can be said is that despite the fact that the USSR was clear in its adamant opposition to the NATO enlargement, no agreement guarantee-

ing that there would be no expansion was signed. During the discussions in 1989-1990, the issue did not come up because the Warsaw Pact was still in place. However, starting in 1991, the Soviet Union lost control over the events in Central and Eastern Europe. Communist governments fell, the Warsaw Pact dissolved, and the West had no impetus to engage in any negotiations or agreements with Moscow. Motivation to negotiate with Moscow further decreased with the breakup of the Soviet Union. Under Boris Yeltsin, Russia not only set aside Soviet demands for guarantees that the NATO would not expand, but even toyed with the idea of joining the alliance itself. For their part, NATO members perceived the situation as a clear victory. Russia lost its status as an equal partner and became, as far as the NATO was concerned, just another country that the alliance would deal with on its own terms. From these beginnings grew profound imbalances in European security, which caused disagreements between Russia and NATO starting from the mid-1990s. In effect, the West failed to create a coherent and purposeful policy for working with Russia. It was customary to believe that Moscow was moving towards the West, and therefore the West could not do Russia any harm by acting unilaterally. This approach did not change, even after the first serious disagree-

ments between Russia and NATO erupted during the conflicts in the Balkans. At that time, the West acted unilaterally on its own interpretations of how to ensure European security, which included expanding the NATO and deploying US missiles in eastern Europe. When Russia balked at these moves, Washington and Brussels responded that Russia could also take whatever steps it felt were necessary. The West tended to believe that while Russia wanted an equal partnership, it was not an equal partner. A divergence of interests prompted Russia to reassess its priorities in its relations with the West. Moscow’s hopes to establish a new world order on equal terms with all parties remained unfulfilled. On numerous occasions, the US and NATO unilaterally used force in conflicts. Russia’s independent foreign policy, aimed at ensuring its own interests, met with increasing criticism in the West. The Ukrainian crisis is just the latest example of Russia and the West’s failure to create a post-Cold War world order. To prevent future conflicts in Europe, Russia and the West should agree on new rules of engagement, both in Europe and in the rest of the world.

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IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

E |C |O |N |O |M |Y WEDNESDAY NOVEMBER 12, 2014

INTERVIEW

NEWS

DMITRY ROGOZIN

Expect ‘Strategic Vision’ document during Putin’s visit in December PRESS PHOTO

Russia’s deputy prime minister talks about intensified cooperation with India in nuclear energy, space, defence and joint manufacturing projects. ALESANDRO BELLI

Russia offered India three additional Project 11356 or Talwar class frigates, after New Delhi made a formal request, Vladimir Spiridopulo, the general director working on this project at the Northern Design Bureau, said. Negotiations have been taking place since this spring, TASS said. Russia has supplied India with two sets of three Project 11356 frigates. RIBR

RIBR

ussia’s Deputy Prime Minister Dmitry Rogozin was in Delhi to co-chair the 20th meeting of Indo-Russian Inter-Governmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC). He spoke about the possibility of the two countries starting new joint projects in civil aircraft manufacturing and plans to establish a working group to examine the feasibility of concluding a free trade agreement between India and the Customs Union (Belarus, Kazakhstan and Russia).

India phase of Avia Indra-2014 to be held in Punjab The India phase of the Avia Indra-2014 joint air force exercises between Russia and India will be held in the Halwara air station in Punjab between November 17 and 27, a leading newspaper reported, citing sources. The Russian personnel will use Su30MKI ﬁghter aircraft and Mi-17 and Mi-35 helicopters. The Russian wing of the exercises was held in August in Voronezh at the Pogonovo range and in Astrakhan Region. RIBR

Are there any plans during Russian President Vladimir Putin’s trip to India in December to sign a new agreement in nuclear energy? We are working on a strategic agreement that will include, in particular, Russia’s participation in the development of nuclear energy in India. And we hope to have this document ready by the time of the visit. What will be included in that agreement? At the moment, the authors of the future document are summarising all of the projects that were discussed during the meeting of the intergov-

Moscow to get ﬁrst Buddhist temple, to cost $5.4 million

ernmental commission. We observed a positive reaction, on the part of our Indian colleagues, to our proposal to develop high-tech cooperation, primarily in aerospace. India is interested in Russia’s short and medium-range MC-21 airplanes. We also discussed the possibilities for assembly in India of the Sukhoi Superjet-100 airplane. Interest was also expressed in possible aircraft engine manufacturing projects. In the coming weeks, we agreed to hold separate consultations on cooperation in space exploration. These will involve manned space missions and deployment of projects in India connected to the use of the Russian navigation system GLONASS. We are also looking at the possibility of joint production in India of GLONASS signal receiving modules and introduction here of the ERAGLONASS satellite monitoring system for transport vehicles, used for automatic notification of emergency services in case of accidents. We hope that before Vladimir Putin’s visit, or immediately after it, we will have reached a mutual understanding on the alignment of our space programmes. These and other projects will be detailed in the strategic agreement. We provisionally call this – the “strategic vision”, which we would like to consider

and adopt during the visit. It seems that these Russian projects fit nicely into the Indian agenda – “Make in India”. Do you agree? The agendas of Russia and India coincide. We are also committed to “Make in Russia”, and are currently implementing an import substitution programme. And this is something that is long overdue. As for our relations with India, Russia was the first to propose to not just deliver finished products to the Indian market, but also to establish assembly and manufacturing plants in the country, together with the transfer of technologies. Tell us more about the Indian interest in the MC-21 and the Sukhoi Superjet-100? The Indian side made it clear that they are interested in MC-21. The first flight of this airplane is scheduled for 2016, and the beginning of mass production – for 2017. It will carry 180 passengers and have a range of 5,000 km. It’s an ideal aircraft for India. As for the Sukhoi Superjet-100, we are talking about the possibility of locating production plants in India for the Indian market, and even possible joint-entry into markets of other countries. We also view joint projects in helicopter engineering as very promising.

STRATEGY: One Indian ﬁrm among those identiﬁed for import substitution

Sanctions: Russian oil industry looks East for alternatives

Moscow is set to get its first Buddhist temple. In addition to a prayer hall, the three-storey temple complex will contain a meditation hall, library, cinema and a five-meter statue of Buddha. The temple’s construction will be financed by money provided by sponsors and general donations. The temple project will cost $5.4 million. The construction is expected to start in spring. RIBR

Singapore and Latin America as alternative suppliers. The equipment can also be found in the United Arab Emirates, Saudi Arabia and Israel, but these countries cannot be considered as alternatives, because they “follow in the footsteps of the United States.” The ministry has prepared a complete list of foreign companies, which could replace American and European suppliers. It contains one company from India (Indore Composite), which could act as a supplier of reagents, three from South Korea (Daewoo, LHE and KwangShin, compressors and plate-type heat exchangers), Belarus (Naftan, additives) and Singapore (NuStar, underwater equipment). For the majority of categories, mostly Chinese manufacturers like CNPC, China National Logging Corporation, Shanghai Electric Heavy Industry, and Huawei, appear as alternative sources. Russian oil companies are already holding talks with new suppliers. In mid-October, Rosneft discussed the possibility of combining efforts with CNPC in oilfield services and the production of equipment. Due to sanctions, Gazprom Neft is also seeking alternative suppliers, including in Asia, said Vadim Yakovlev, first deputy general director of the company, in September, before the introduction of the latest round of sanctions. As for price, the Chinese equipment is not much cheaper than that from the West, but the quality is inferior, says RBC’s source.

Now, Russia is looking to explore India, China, and South Korea for oil-related equipment.

Russian culture fest to enthrall Kolkata, Delhi, Chandigarh

LYUDMILA PODOBEDOVA RBC Daily

F PRESS PHOTO

Nearly 100 artists and performers from Russia will be coming to India for the Festival of Russian Culture. A cultural extravaganza, including a show by the Moscow State Puppet Theatre, is set to charm Kolkata, Chandigarh and Delhi. The performances began in the Indian cities on November 3 and will last till December 22. RIBR

or the first time since the imposition of Western sanctions, Russia’s Ministry of Industry and Trade has prepared a list of measures on import substitution in the oil industry. However, such measures may not be practical or feasible in the short-term, which will prod the country to turn to India, South Korea, China and Latin America for help. Taking into account the hidden imports (when services are rendered by the Russian affiliates of foreign companies), the share of imported equipment and technology reaches 80 percent. Moreover, in certain categories such as equipment for offshore projects or software, the share may exceed 90 percent, says the document. Oil sector companies are most dependent on imports of pump and compressor equipment, machinery

for geological and seismic exploration works, software and hardware systems and automation systems, as well as equipment and technology for offshore operations. Formally, the EU and US sanctions prohibit supplying to Russia only equipment and technologies that can be used in the Arctic, deep-water operations and in shale projects. However, in reality, the limitations also threaten production at the traditional fields, wrote the officials. While Russia has more than 200 companies that produce oil and gas equipment, import substitution, in most categories, will not be possible earlier than 2018-2020, says the Ministry of Industry and Trade. According to the government agency, out of the 45 categories, Russian companies can provide substitutes for only five. The ministry has identified companies from India, China, South Korea,

Culture connect: Joint ﬁlm-making on the way Deputy Minister of Culture Elena Milovzorova tells RIBR about nostalgia for Raj Kapur days and the plan of India and Russia to jointly make films. ALESSANDRO BELLI, RIBR

PHOTOFEST

t one time, the much-celebrated film Awaara by Raj Kapoor was the third highest box office earner among foreign films in the USSR. Decades later, fuelled by nostalgia the cooperation between the Russian and Indian cinema industries is about to resume, and will build on the Indo-Soviet cultural legacy. According to Russia’s Deputy Minister of Culture Elena Milovzorova, the Indian side expressed interest in joint film production and asked to show contemporary Russian cinema in India. Besides, Indian officials were not only talking about the already existing festival of fiction films, but also about documentaries. It’s an unusual trend and, in her opinion,

Indian cinema once captured the hearts of Soviet people, can make a glorious comeback. demonstrates the interest of Indians in the modern history of Russia. In 2015, Russia will host the Festival of Indian culture, and one of the showpiece events will be dedicated to cine-

ma. Nostalgia makes viewers miss the golden age of Indo-Soviet cinema cooperation. Famous Russian film director Alexander Mitta, known for Soviet hits Air crew and Shine, shine, my star!

believes people seek a foothold in the past. “The past looks good in films. And that’s positive, but people should at least respect their past,” he said. Milovzorova thinks that Russians should expect the comeback of the Indian cinema in their country. “Cinema matters are within the purview of the Minister of Culture personally. After the working group meeting, we asked the Indian colleagues to make a list of ideas that I could bring up for discussion at the ministry in Moscow,” she says. One of the most interesting suggestions was to establish cooperation in the field of theatre. The capital of India annually hosts a Theatre Festival. “It would be interesting to organise a show visit of one of Russian drama theatres. But it should not be about performing alone, but also about workshops, meetings with students and young actors,” suggests Milovzorova.

Russia set to supply 3 new Talwar class frigates to India

Russia’s Deputy Prime Minister Dmitry Rogozin is upbeat about a major upswing in India-Russia ties during President Vladimir Putin’s visit to India in December. Our proposal concerns the possibility of using various models of the Ka-226, for both civil and military purposes. This helicopter’s high-altitude performance characteristics are unique, which is important for India’s mountainous terrain. Our Indian colleagues also have a great interest in working on joint energy projects, including liquefied natural gas. The Russian state corporation Rusnano has come up with its own new project, proposing the establishment of a joint investment fund with capital of $1–2 billion, contributed on a parity basis, which could be used to finance start-ups in high technology.

This proposal now needs to be studied by the Indian side. Has there been any progress on the establishment of a working group to examine the prospects for a FTA to be concluded between India and the Customs Union? External Affairs Minister Sushma Swaraj informed us that the Indian side has approved the creation of such a working group. This means that we will begin working on this right away. The working group will submit a report to the intergovernmental commission about the feasibility of signing such an agreement.

POINT OF VIEW

G20 summit: New steps are a huge leap SVETLANA LUKASH Russia’s G20 Sherpa

he G20 Leaders’ Summit will be held on November 15-16, 2014 in Brisbane, the capital city of Queensland, Australia. Just like last year, the main theme of the G20 Summit will be ensuring the global GDP growth of 2 percent over the current level, as well as the stimulation of employment and job creation. The Australian presidency has been working on developing the commitments made by the G20 grouping of the world’s leading economies in the past years, including during the Russian G20 presidency. This year, Australia set the main task as building comprehensive growth strategies for all G20 countries in four main directions of development. These are investments, employment, trade and competition. During the year, all countries developed and proposed corresponding measures. These measures were discussed in detail at various working levels, subsequently assessed by various international organisations and by the countries themselves. And today, we can say that we can fulfill the set goal. Most of the developed measures are new, in comparison with those that were announced last year. This is a huge leap, a breakthrough in strengthening global economic growth. This also means that the work that has led the G20 towards sustainable and balanced economic growth for the past six years, will now be clearly structured and focused, and this will provide significant results. Growth strategies and discussion of these measures on strengthening the global economy, especially in the direction of creating jobs and investment accumulation are definitely the main goals of the summit. In addition, certainly we will discuss measures for reforming the current financial architecture, financial regulation systems, and the tax systems. Topics of financing investments and

joint actions to combat tax evasion and erosion of the tax base, were first placed on the agenda during Russia’s presidency. In all these areas, very significant results have been achieved. Half of the plan on taxation has already been implemented. All in all, one can see that good dynamics are in place to fulfil further obligations, including the automatic exchange of tax information. Much remains to be done in the financial regulations sphere, although significant results in improving the stability of financial institutions have already been achieved, including in addressing the problem of “too big to fail”; and in addressing the risks associated with the shadow banking sector, as well as in the transition to a more secure environment for the derivatives market. Joint work has already gone far beyond just banking regulation. We are moving towards a coordinated and harmonious work of our regulatory bodies in the financial markets. The summit will become a platform to also discuss other very important issues. For the first time, energy issues will be placed on a new plane. It is high time we reflected on the inadequacy of existing international energy institutions to the current realities, which we observe in the international energy sector. The role of the emerging economies – which are now completely unrepresented in global energy institutions, and accordingly, cannot influence the decision-makers – should be strengthened. The roles of traditional energy suppliers and consumers are changing. All this is reflected in the balance of power; the traditional institutions offer no opportunities for quality dialogue in the current environment, so it is a good thing that the G20 has started to deal with this subject. Current challenges to the economic and social development of the world, such as the Ebola outbreak, will also be among the issues discussed at the summit.

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

T |E |C |H |N |O |L |O |G |Y WEDNESDAY NOVEMBER 12, 2014

ANALYSIS

INNOVATION: Russia’s space agency isn’t content simply to keep putting people into orbit.

Space bonding: Old ties, new horizons DEBIDATTA AUROBINDA MAHAPATRA Foreign policy analyst

Russian Space Agency Roscosmos is bursting with ideas, which it hopes to turn real by 2025. VALENTIN HITORIN RIBR

oscosmos, Russia’s Space Agency, has not limited itself to repeatedly putting people in orbit and conducting experiments at the International Space Station. Looking into the future, here are some of Roscomos’ pet projects, ranging from the plausible to the seemingly fantastic: Liquidator: the space janitor Humans haven’t conquered space yet, but they have already managed to pollute it. According to the US Space Surveillance Network, there are more than 16,200 loose objects orbiting the earth. This debris has the potential to destroy space vehicles. In August, Roscosmos unveiled a plan to design a spacecraft for cleaning the geostationary orbit. The project, called the Liquidator, is slated for development between 2018–2025, with a budget of roughly $292 million. New cosmodromes Roscosmos plans to spend $24.3 billion for infrastructure to support spaceports. These funds will be used to build an extension of the Plesetsk

Cosmodrome in the northern Russian region of Arkhangelsk as well as to complete the construction of the Vostochny Cosmodrome in the Russian Far East and to support the Baikonur space complex. Remote sensing of Earth The remote sensing of the earth is one of the Russian space industry’s weakest areas. With no programme in place that covers the entire Russia, Russian scientists have to rely on information from international satellites. Against this backdrop, the new Federal Space Program (F.S.P.) is set to develop between 2016–2025. It was developed by resilient optimists who hope to enlarge the Russian orbital fleet by adding 26 high-tech satellites at a cost of $9.7 billion. The varied projects within the F.S.P. include: MeteoSSO, a global hydrometeorological and heliophysical system consisting of four new generation satellites that will travel on sun synchronous orbits ($1.8 billion); Meteo-Glob, a global meteorological sensing system that uses visible and infrared bands ($2.3 billion); Resurs, a three-satellite program designed to capture images of the Earth in high and ultra-high resolution ($1.5 billion); ES-SSO, an operating supervi-

sion space system for local emergency situations that is composed of 10 satellites that orbit in synchronicity with the sun ($2.9 billion); and ES-GSO, a highoperating supervision space system for major emergency situations.

a moon base, a mobile manipulator crane, a grader, an excavator, a cable layer and a mobile robot for lunar surface exploration between 2018–2025. Roscosmos, it seems, wants to be not just a guest, but a full-time resident.

Moon base Russian spacecraft were the first to fly over the dark side of the moon and take soil samples, but they never managed to put a person on its surface. Now, Roscosmos is looking to spend $280 million on the development of

Moon-mobile Roscosmos is developing a new rover called the moon mobile, that will search the moon for natural resources like rare earth elements, titanium, uranium and helium-3, which is a possible fuel for nuclear fusion. The moon mobile should be completed by 2021, which gives the agency four years to test the vehicle before its 2025 deadline.

$292

million is the budget for the Liquidator project which will develop a spacecraft to clean up Earth’s geostationary orbit.

Super-heavy rocket to Mars In September 2014, plans for a superheavy rocket with a120– to 150–ton capacity got preliminary approval from President Vladimir Putin. This rocket, which seeks to create a vehicle that can fly to Mars, is one of the most expensive of Roscosmos’ ideas, with its budget twice as the Angara rocket.

$9.7

billion is the cost of developing 26 new high-tech satellites that will provide access to data across Russia.

What’s in a black hole? Russian and German scientists continue to work towards the development of the high-energy astrophysics observatory Spectr-RG, which will explore galactic clusters and black holes with the eROSITA Roentgen telescope. The observatory should be ready by 2017.

$280

million will be spent on developing a moon base, an excavator and a mobile robot for exploring the lunar surface.

NASA

Think Big: Russia’s Most Ambitious Space Projects

ndia’s rapid strides in space could not have been possible without Russian cooperation, but it’s not useful to subsist on nostalgia for long. The two strategic partners need to synergise their relations keeping in view the changing dynamics. India’s successful Mars Orbiter Mission brought it onto the world stage as a space power. It is the only country in Asia, which has successfully conducted a Mars mission, and that, too, in its maiden attempt. The country’s successful development of indigenous technology and its use in space exploration in the past few years have really been astounding. This year is also the 30th anniversary of the space flight of the only Indian astronaut, Rakesh Sharma, who travelled to Salyut-7 Soviet space station from Baikonur Cosmodrome. The Soviet Union not only sent an Indian astronaut to space, but also to launch its satellites like Aryabhatta in 1970s. The collapse of the Soviet Union impacted bilateral relations, including cooperation in space. However, space cooperation picked up gradually. In 2004, both countries signed an agreement for peaceful exploration of space and another agreement for the development of GLONASS satellite navigation system and launching the Russian spacecraft by Indian rockets. In 2005, an agreement was signed on technology safeguards while implementing the long-term cooperation in the area of joint development, operation and use of the GLONASS system. This agreement envisaged launching of GLONASS satellite using GSLV launch vehicle of India, with Russia providing access to GLONASS system signals for Indian use. It also envisaged joint development of user equipment for exploitation of the signals for commercial purposes. An agreement on cooperation in the field of solar physics and solar terrestrial relationships within the framework of Coronas-Photon project was signed in 2005. In 2007, India’s space agency ISRO and Russia’s space agency Roscosmos signed a pact to jointly develop India’s Chandrayaan-2 mission. The spacecraft was scheduled to be launched in 2013. In 2008, both the countries signed an MoU on human spaceflight programme.

2014: A promising year This year has also shown promises for galvanising bilateral space cooperation. In February 2014, Russia’s Deputy Prime Minister Dmitry Rogozin, during his visit to India, argued that there is ‘enormous potential’ for space cooperation. He also disclosed a new agreement: “We have agreed to hold a series of consultations between our space agencies to engage our Indian partners in the plans and projects to be undertaken by the United Rocket and Space Corporation.” In April 2014, the Head of Russia’s space agency, Oleg Ostapenko, reiterated Russia’s interest to develop space cooperation with India and China. Recently, Russia has announced a slew of space programmes worth billions of dollars. These will strengthen bilateral cooperation, provide India muchneeded space technology, and Russia capital, and strengthen mutual space economy. Besides government-to-government cooperation, it is also crucial to promote public-private and privateprivate cooperation in the space sector. Already there are examples like Sistema Shyam Teleservices Ltd. In July this year, India’s company Aniara signed an agreement for the design and production of telecommunication satellites with Russian company Dauria Aerospace. The project is worth $210 million. Along with another company, Dauria will implement the project, and be responsible for analysis of the mission, flight, and ground control. The number of millionaires and billionaires in India are increasing, and they can play a key role in boosting bilateral space cooperation. Indian and Russian space agencies, however, need to sort out differences. Differences on projects like Chandrayaan-2 or human spaceflight programme could have been better addressed. Last October, India’s space agency chief voiced dissatisfaction at the slow pace of developments of the project and declared India’s intent to go solo in the project. Perhaps the problems regarding the project could have been better handled. It may be possible that the project can be developed jointly and launched by 2016 or 2017, with Russia supplying lander and India building rover and orbiter.

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The Unit I of Kudankulam nuclear power plant is likely to resume operation by November-end. MARK COOPER RIBR

he youngest Indian nuclear power plant – Kudankulam NPP – has been producing energy for just over one year. However, the first electric power unit of the NPP was stopped mid-October. This is due to the necessary, planned, in-depth inspection and diagnosis of the turbine generator systems. According to preliminary estimates of experts, this unit could be placed back into operation by the end of November. The strength of any country’s economy depends on its energy supplies, and India is no exception. This country has a highly developed nuclear energy infrastructure, and not surprisingly, the most advanced nuclear power station in the country – the KNPP I, which has already passed through several key milestones. Last October, it was connected for the first time to the Indian electric power grid. In January, it successfully passed the testing programme at 50% power, and then in June – at 75% and at 100% power,

that is, the unit had proven its ability to produce as much energy as its design capacity called for. In mid-October, the first unit was stopped. “Today, the first unit of the Kudankulam NPP was stopped for an in-depth inspection and diagnosis of its turbine generator systems. This is quite a routine step, often performed during placement of a unit into com-

KNPP-I was stopped mid-October for in-depth inspection of its turbine generator system to ensure all equipment is working. mercial operation, and before that, experts usually carry out the final testing stages, as they must feel confident that all equipment is working as it was designed,” says Alexander Uvarov, a well-regarded nuclear power expert. Moreover, the turbine generator of a nuclear power plant is not a part of the so-called nuclear island of the NPP

as it is an ordinary piece of equipment similar to that commonly used in other, non-nuclear power plants. There is no need to hurry this ongoing diagnosis process, or to delay it unduly; according to the preliminary estimates of experts, the best-case scenario would be the return of this unit into full operation before the end of November. For now, some equipment, with a turbine from the second unit, will be installed on the first block, and this, being a normal operation, has no impact on the timing or safety of the nuclear power plant. Electricity from Kudankulam NPP is fed into the southern electric power grid, in the states of Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and the Union Territory of Puducherry. Since its first connection to the electric network, the unit has worked at full capacity for 4,700 hours. During this time, India received more than 2.8 billion kWh of electricity. Incidentally, these are the first kilowatt-hours developed in India, using a block with pressurised light water reactors, that is, with the world’s most common type of reactor. Prior to the launch of Kudankulam, India had no such reactors in service. The first unit has already developed so much power that it would be enough

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KNPP1: It’s a routine halt, don’t worry about safety

Kudankulam Nuclear Power Plant is designed according to strict safety standards and based on the principle of self-protection. to burn a few million light bulbs during an entire year, or to keep more than two million refrigerators humming for an entire month. The electric power already generated by the Kudankulam NPP would also be enough to fully power the subway in New Delhi or Chennai for several months. The well-known pressurised water reactors (PWRs), of Russian design, installed in the KNPPI can be, without exaggeration, called the most reliable in the world. “For almost eight years, similar power units with referential solutions, including equipment, have been recognised in China as the best, in terms of safety and capacity utilisation factors. Moreover, in India, more sophisticated power units have been installed, with deeply-echeloned

additional passive safety systems,” said Andrey Komissarov, an expert at the Environmentally Sound Energy Foundation. The foundation of the PWR is the principle of self-protection of the reactor plant, which is ensured by an assortment of neutron-physical characteristics of the reactor, providing independent termination of fission reaction in any emergency situation, regardless of the operator’s actions, triggering emergency protection using gravitational forces. Electric power units of the Kudankulam NPP are equipped with a range of independent safety barriers, including double protection of the reactor shell. We should mention that the outer shell protects the reactor from external influences, and can withstand a plane crashing

into it, as well as all natural disasters. India today is a technologically advanced country, with vast experience in the construction and operation of nuclear reactors of different makes. The choice of the latest modern systems for the nuclear power plant, being built according to Russian design, was dictated by the desire of our Indian atomic energy colleagues to find an answer to a very important question – would this electric power plant provide the maximum safety for the country’s population? As a result, Russian designers have done everything possible to ensure that Kudankulam is one of the most reliable nuclear power stations in the world so that people can live quite happily around it, without any fears about their safety.

IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

F |E |A |T |U |R |E WEDNESDAY NOVEMBER 12, 2014

MUSIC: Founder of Big Band, the iconic jazz saxophonist says he feels like coming to India again and again as the audience is welcoming and discerning

Russian sax king set to weave magic spell in India

it is Russia’s Sibur company that sponsored it, which is probably the first time when a Russian company working in India is doing it? It was rather a personal initiative by Sibur’s India CEO Evgeny Griva, my old friend and our producer in India, Pradeep Bhatia and another friend, an American philanthropist who made this tour possible. We as Big Band were also interested in bringing the large orchestra here because for us the Indian tour was important, so we contributed as well. I believe the government should support, but its budgets are not unlimited. Secondly, there should be a clear understanding on whom to bring and what collectives to support. Business does support us, although this support could be larger. As of now, all the support from business is based solely on my good relations with people and not on the interests of the companies in the countries where we are going or their own initiative.

ALEXANDRA KATZ RIBR

gor Butman started his journey as a jazz musician in the 1970s when studying at the Rimsky-Korsakov Music College and the Mussorgsky Music College, in what was then Leningrad. He immigrated to the US in 1987. While working for the Lionel Hampton Orchestra in New York, he shared the stage with jazz legends such as Dee Dee Bridgewater, Kevin Mahogany, George Benson, Gino Vannelli and Wynton Marsalis. In the mid-1990s, Butman moved back to Russia, where he founded the Igor Butman Orchestra, also known as the Big Band. The orchestra, which has been touring the world ever since, became the Moscow State Jazz Orchestra in 2012.

Butman’s tryst with India goes back to 2003 when he first performed in Delhi, Mumbai and Kolkata as a part of the ‘Days of Russian Culture in India’ initiative. This year, it was an initiative by Pradeep Bhatia of Jazz Addicts, an association of jazz enthusiasts, and Evgeny Griva, chief executive of SIBUR Petrochemical India, a joint venture between Russia’s petrochemicals giant Sibur and Reliance Industries. While talking to RIBR on the eve of the concert at Mumbai’s NCPA, Butman was wearing a black T-shirt with a portrait of President Vladimir Putin on it. This is your fourth visit to India in almost a decade. Do you see the audience changing in India, where jazz has a relatively small following? It’s difficult for me to notice whether

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Igor Butman is back in India, and this time he brings his 16-member Moscow Jazz Orchestra.

If music be the food of love, play on: Russian jazz icon Igor Butman is no stranger to India. The virtuoso saxophonist is set to charm Mumbai at a concert and promises that his Jazz Orchestra will be playing the best from their repertoire. the audience has changed because we have been always getting an amazing feedback in India. Either we play so well or the audience is so well-prepared. But the people are so open, so welcoming, and they can appraise the mastery of musicians. That’s why we feel like coming here again and again. Do you have to customise your programme for India? As we finally bring a full orchestra to

India, we will be playing the best from our wide-ranging repertoire. Once we understand that there are people here who like what we do, if we come next year we will be able to add new compositions. We had an idea to experiment with some Indian music but when we looked deeper we found that it requires more time and better understanding.

played with them? I had played with a well-known Indian pianist Madaf Shafi when we met in the US. There are many Indianorigin jazz musicians in the US. Our bass guitarist Alex Rostotsky has been working with famous violin virtuoso L. Subramaniam for a long time. Do you think the government should be actively involved in promoting Russian culture in India? In case of your Indian tour,

Have you met Indian jazz musicians or even

You are wearing a T-shirt with Putin’s portrait. Is it kind of a political statement? I respect President Putin as well as many other people in the country. Russia is in a difficult situation today. I support Vladimir Putin and believe we are doing the right things. But I believe we should find some other ways to explain to the whole world why we are doing so and so, without taking offence. We should establish contacts with many people from different spheres abroad, we should bring our position to their ears, we should understand where we were wrong, what the world wants from us, what we could change.

HERITAGE: Cultural centre and a magnet for celebrities, artists, royals and politicians, Lenin spoke at this hotel which served as the Second House of Soviets

A marvel of Art Nouveau style, Hotel Metropol is Moscow’s pride and a walk through rich history. EKATERINA NOVIKOVA RIBR

t’s not just a celebrated luxury hotel, but a historic landmark associated with iconic figures. Located in the heart of Moscow, the majestic Hotel Metropol literally breathes history and is known for hosting famous artists, celebrities, politicians and members of royal families. Its transformation from a bath complex to a grandiose hotel complex was driven by well-known industrialist and patron of the arts, “Maecenas” Savva Mamontov. At the end of the 19th century, he bought the hotel, then called Chelyshi, and began a large-scale project for building a cultural center in which, along with the hotel, there was to be a restaurant, a theatrical stage, and an

art gallery. The construction started successfully, but several months later, after the scandalous trial of Mamontov, in which he was charged with multiple embezzlements, the project was revised: a restaurant was built in place of the theatrical hall and the layout for the entire complex was altered. A work of art The hotel’s floor plan included electric elevators, hot water, refrigeration units and special ventilation. This interest in new technology marked out Art Nouveau, especially in architecture. Moreover, in the best traditions of the style, there were no two analogous rooms out of the hotel’s 400. Colorful murals decorate the top of the building’s façade. Many styles are

found in the building’s interior: there are rooms made up in the 18th century styles, the Neoclassical style, and neo-Russian style. Famous artists provided the decoration for the Metropol. Sergey Chekhonin did sketches for the murals in the restaurant hall. Mikhail Vrubel’s Princess of Dreams panel was created in Mamontov’s famous workshop at Abramtsevo. Tryst wih history In 1917, during the revolution, the Metropol, with its exquisite architecture and luxurious rooms and restaurants, suddenly turned into a military fortress. It became the hub of fierce battles between cadets loyal to the Provisional Government located inside and detachments of the revolutionary Red Guard that stormed the Metropol. The hotel was captured after the bombardment and was seriously damaged. Repairs went on for about a year.

From Russia’s main Christmas tree and chime bells on Red Square to the holiday cheer ringing in Moscow’s pedestrian zones, RIBR tells you where to have New Year’s Eve fun in the capital.

The façade changed once the Bolsheviks came to power. Originally the quote by Friedrich Nietzsche was inscribed on it. This was replaced by Lenin’s famous commandment in 1919: “Only the dictatorship of the proletariat can free humanity from the yoke of capital.” In 1918, the Bolsheviks moved the capital to Moscow. The new government chose the Metropol as one of its residences and people started to call it the “Second House of Soviets”. Instead of a chic clientele in exquisite clothes, the hotel was swarming with stern officials in leather jackets. Lenin spoke at the hotel on more than one occasion and Chicherin, Sverdlov, and Bukharin lived and worked there. As the international status of the Soviet state grew, dignitaries from abroad started to come to Moscow again, and it became necessary to restore the Metropol to its glory as

T R AV E L 2 M O S C O W. C O M

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Myriad faces of Metropol: History, art and style

The swanky hotel has a unique history and keeps memories of the bygone epochs. an elite hotel. Playwrights Bernard Shaw and Bertolt Brecht, and actress Marlene Dietrich were among those who stayed at the hotel. Today, Hotel Metropol, after all of the trials and restorations, looks like a magnificent

Art Nouveau era production. It is one of the best hotels in the world as confirmed by celebrity guests like Gerard Depardieu, Arnold Schwarzenegger, Sharon Stone, Montserrat Caballé, and Michael Jackson.

The New Year of your dreams: At Red Square, let yourself go.... You can come to Red Square early, in the middle of the day, to walk along the luxuriously decorated halls of the GUM shopping mall, plunge into the festive atmosphere, and buy souvenirs. The bright lights of Russia’s main Christmas tree, the cheerful holiday lighting of St. Basil’s Cathedral, fireworks, and an enthusiastic “Hurrah!” from thousands of people in the crowd all make for an unforgettable beginning of the New Year. Hint: after finding the right spot on the Red Square, you can record a video message in front of the chimes (president-style) and send it to your friends and relatives who are celebrating the New Year across the world. Pedestrian streets: Fairy-tale atmosphere, carnival parade As early as the middle of December, pedestrian streets in Moscow – Arbat, Kamergersky Lane, Nikolskaya Street, Stoleshnikov Lane – are transformed into vivid, colourful illustrations of a News Year’s fairytale. Concerts, souvenir and food markets, mulled wine, and hot food – you can have a great time at night and in high noon. On New Year ’s Eve, these streets in the capital will be just as packed as Red Square, and everyone can participate in the carnival parade. Shopping, entertainment and frosty fun at outdoor markets You can celebrate the New Year in full swing in the center of Moscow at holiday markets. Wooden huts with Russian shawls and scarves, Zhostov trays, and Tula gingerbread await guests, as well as chalets with mulled wine, mead and crepes, toys, and New Year souvenirs from different cities in Russia and from all over the world. Guests can visit a gnome town and a fairytale land of Christmas angels and stop by a bazaar with holiday souvenirs from all over Russia at the Journey to Christmas festival. You can even run into famous characters from Russian folklore – Emelya and his famous mobile oven and the hosts of the holiday, Grandfather Frost and Snegurochka. Moscow skating rinks: Romantic settings, cosy cafes on ice For those who want their New Year celebrations to be more holistic, there are skating rinks all over Moscow. They can glide at the country’s main skating rink near GUM on Red Square to the sound of chimes, drink champagne, eat tangerines, and look at Russian celebrities who visit the square with their families. The skating rink in the middle of a wooded area at the Hermitage Garden is considered to be the most romantic, while the rink at Gorky Park (which, by the way, is the largest skating rink in Europe) has the most cosy cafes on ice. Moscow ponds also turn into skating rinks in the winter – you can skate at the legendary Patriarch’s Ponds or at Chistiye Prudy. Park yourself in parks: Good time for children and adults Every year, parks in Moscow put together programmes for children and adults, including light shows, performances based on old Soviet holiday musicals such as Carnival Nights, or Christmas ornament workshops. Kolomenskoye Park offers horseback rides, Sokolniki hosts snowman building contests, and Grandfather Frost with Snegurochka can be found at every park in Moscow.