Russia was careful to avoid official comment on the India-China Doklam stand-off. When asked about the significance of the forthcoming India-Russia joint military exercises, Indra2017, in the context of India-China tensions, the MFA spokeswoman stated that this routine annual event reflects the “special and privileged strategic partnership” and should not be perceived “in the context of the current situation in India-China relations”. She said Russia was confident that, “as responsible members of the international community, New Delhi and Beijing will be able to find mutually acceptable ways to quickly defuse the tensions that have arisen between them”. A mainstream Russian newspaper reported,quoting unnamed official Russian sources, that China had sought Russian help in resolving the Doklam issue, while India had made no such request. The veracity of this report is not clear.

A consortium led by Russian oil giant Rosneft announced the closure of the deal to acquire 98% of Essar Oil, including its Vadinar port and refinery and its 3500 retail outlets, for about US$12.9 billion. It is Russia’s largest foreign investment and the largest ever FDI into India. The consortium beat back competition from Saudi and Iranian oil majors, which were also seeking to access the lucrative Indian market. The consortium apparently plansto expand annual capacity of Vadinar refinery from 20 to 24 million tons, to set up a downstream polypropylene unit and to increase the number of retail outlets in India to 6000. The longer-term objective is to use this base for forays into Asia Pacific markets.

The Russian media reported that Rosneft has significant crude holdings in Venezuela (as part of various barter arrangements). They will now feed the Vadinar refinery, replacing West Asian sources.
Rosneft’s investment in India mirrors the recent large Indian investment in Russia’s hydrocarbons sector. In all, Indian companies have invested about US$ 5 billion in 2015-16 in two Rosneft subsidiaries. ONGC Videsh’s earlier investments in Russia total another $ 5 billion. The sheer size of these mutual investments should ensure their protection against decisions by either government prejudicing the interests of the investors. At a broader level, they demonstrate to corporate India that lucrative investments are available in today’s Russia, and that large Russian corporates have investible resources, which can be attracted to India.

 

 August 30, 2017

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About the Author

Ambassador PS Raghavan

Former Ambassador of India to Russia; Convener, National Security Advisory Board

Born in 1955, Ambassador Raghavan holds a B.Sc. (Honours) degree in Physics and a B.E. in Electronics & Communications Engineering. He joined the Indian Foreign Service in 1979. From 1979 to 2000, he had diplomatic assignments in USSR, Poland, United Kingdom, Vietnam and South Africa, interspersed with assignments in the Ministry of External Affairs (MEA) in New Delhi. From 2000 to 2004, he was Joint Secretary in the Indian Prime Minister's Office dealing with Foreign Affairs, Nuclear Energy, Space, Defence and National Security. Thereafter, he was Ambassador of India to Czech Republic (2004 - 2007) and to Ireland (2007 - 2011).

He was Chief Coordinator of the BRICS Summit in New Delhi (March 2012) and Special Envoy of the Government of India to Sudan and South Sudan (2012-13). Ambassador Raghavan conceptualized and piloted the creation of the Development Partnership Administration (DPA) in MEA, which implements and monitors India’s economic partnership programs in developing countries, with an annual budget of $1-1.5 billion. He headed DPA in 2012-13. From March 2013 to January 2014, he oversaw the functioning of the Administration, Security, Information Technology and other related Divisions of MEA. Since October 2013, he was also Secretary [Economic Relations] in MEA, steering India’s bilateral and multilateral external economic engagement. Ambassador Raghavan retired from the Indian Foreign Service in January 2016, after serving from 2014 as Ambassador of India to Russia. Since September 2016, he is Convenor of the National Security Advisory Board of the Government of India.

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