Business Report
THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA
WEDNESDAY DECEMBER 11, 2013
REAL ESTATE: Only military personnel, teachers, young families get mortgage on special terms
STATISTICS
Soaring house costs make it tough to fly the parental nest
Ruble/Rupee dollar rates
Unaffordable prices and expensive mortgages have made owning a house a near impossible dream for Muscovites, driving them to suburbs. High rents have forced the younger generation to live with their parents. MARIA KARNAUCH
Price of upmarket property goes up in Moscow
RIBR
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ussians appear in no hurry to fly the family nest and begin an independent life. Going by current trends, one in three under 45 year-olds lives with his or her parents. High mortgage rates and the equally high cost of housing stand in the way of buying a home for many.
According to Knight Frank’s premiumclass property rating, the most expensive property in Moscow costs a little more than $23,000 per square metre this autumn, up 1 percent compared to September 2012. Moscow ranks fourth in the rate of increase among European cities, behind London (up 7 percent), St Petersburg (up 6.6 percent) and the principality of Monaco (up 3.2 percent). This is not much compared to mega cities of the Asian-Pacific region and the Middle East where premium-class sites have risen in price by around 17 percent. Building more affordable housing, according to Moscow’s deputy mayor Marat Khusnullin, is not a viable plan. “The price of such real estate should be $2-3,000 per square metre. I think that 12 million Muscovites are not ready to have their property value drop.” Billionaire and politician Mikhail Prokhorov said that this approach showed “why real estate in Moscow has become so inaccessible for the younger generation. This puts the brakes on development of the real estate market.”
Paying with traffic jams According to estate agent Metrium Group, buyers looking to set up in their own apartment need at least $112,600, and that, too, for acquiring 38.8 square metres in a new building on the outskirts of Moscow. Construction is most actively under way in the south and south-west of the city, says Metrium chief Maria Litinetskaya. Houses with finished interiors are more expensive: it costs $104,600 to buy 20 sq m on the outskirts of the Russian capital, say analysts from Incom Real Estate. Prices in the suburbs are almost half what they are in the city, at $2,000 per sq m compared to $4,100. But lower prices invariably come with Moscow’s notorious traffic jams. In the Russian regions, prices are substantially lower. A one-room apartment in a new building in Yekaterinburg can be purchased for $42,000, in Kazan for $50,000, and in Novosibirsk for $22,000, according to data from analytical agency Blackwood.
Average cost of elite property per sq.m.
Happiness and GDP
Buying a home, such as a high-rise Moscow flat, is a daunting prospect for many young people. Help with housing As in the UK, the Russian government offers assistance to some of those who want to buy housing. Military personnel, teachers and young families can qualify for mortgages on special terms. However, those terms do not mean cheaper housing, but special interest rates. Housing has to be chosen on the open market, at publicly available prices, and income must satisfy banks’ lending terms. Young families have been the most fortunate. The Russian government is willing to subsidise 30-40 percent of the cost of an apartment for young families that join one of the federal programmes ‘Young Family – Affordable Housing’ or ‘Home.’ Applicants
must be 35 years or under (single parents can also qualify for government aid). The most important requirement is that the family be registered and officially listed as being in need of improved housing conditions. The size of the subsidy and the living space that applicants can qualify for depends on the number of children. The standard is 18 sq m per family member. Rental market Russians who are unable to buy houses are forced to rent or live with their parents. High rents serve as an incentive to stay under the parental roof. A small flat in a residential area on the outskirts of Moscow can cost $600-$700 a month to
ITAR-TASS
Experts compared indexes of welfare with GDP level and came to the conclusion: Money can’t buy happiness
ITAR-TASS
Mortgage demand Both new buildings and existing apartments can be bought with the help of a mortgage, and bank loans are gaining in popularity among Russians despite high interest rates, which average of14 percent per annum (the lowest on the market is 10.5 percent for those able to make a 50 percent down payment). Starting in the crisis-hit year of 2008, the number of mortgage loans has gone up sharply. In the last year alone, the mortgage market of Moscow and the surrounding region has doubled. Expert estimates indicate that upto one million Russians take out a mortgage every year. However, even at such rates of development in lending, Russia still lags behind Europe, particularly the UK, where, says Blackwood, mortgages are the most common way of owning a home. According to Russia’s Agency for Housing Mortgage Lending, only 24 percent of Russians considered a mortgage as a potential financial mechanism for acquiring housing in 2013.
Stock Market Index
rent. Prices depend on proximity to the metro and the condition of the flat. For $1,000, a Russian can rent a fully furnished one-room apartment in good condition within a five-minute walk from the Metro. But that is also on the outskirts of the city; prices in the centre for housing start at $1,300 and up. Compare that to the average monthly salary in Moscow of $1,200. “The low salary of a young specialist who recently graduated from university and the high rent payment make it impossible to live independently,” says Renat Laishev, president of Educated and Healthy Children of Russia. “In 67 percent of cases, money is the reason behind the lack of desire to leave the parental home.”
BIG PICTURE
It’s time to forge South Asian Union M. K. BHADRAKUMAR Foreign policy analyst
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he recent elections in the Maldives and Nepal pose new challenges to India’s regional policies. The challenges are of a different character, but a commonality also exists. Indian diplomacy averted an impasse in the ties with the Maldives through a course correction over the past several months. When the “pro-Indian” elected president was overthrown in Male last year, Delhi took umbrage. Its fury was fuelled by the summary termination of a highly lucrative contract of an influential Indian firm for managing the Male international airport. But Maldives pushed back and the futility of the pressure tactic compelled Delhi to rethink and change tack to an equidistant stance between the warring Maldivian political parties.
Thus, although the recent presidential election in Maldives produced a surprise outcome, Delhi could engage the new power centre with alacrity. President Abdulla Yameen has accepted Prime Minister Manmohan Singh’s invitation to visit Delhi for his first overseas trip as head of state. However, there is that certain edginess in the air. Curiously, one major decision taken by the new government in Male is to introduce Arabic language in the curriculum of Maldivian schools. The political elites have not hidden their tilt toward “Islamisation” of the Maldivian society. One way of looking at it is that this is only a variant of cultural nationalism, which is sweeping the region – India included. But it also carries the subtle overtone of an attempt to differentiate the island nation from the ethos of the Indian subcontinent.
Maldives is a speck on the strategic landscape of the region, but India will be compelled to negotiate with it in a spirit of genuine equality and mutual benefit. More so, since the new power dispensation in Male is cohesive and enjoys diverse options in its external relations in the kind of multipolar setting in which the US’ rebalance to Asia is taking place. The US has been engaging Male with a view to secure access to the Gan airbase, which is situated between Diego Garcia and the Malacca Strait and used to be a vital staging post for the British operations against the Japanese aggression in Southeast Asia during World War II. Fortunately, the Indian foreign policy establishment doesn’t come under pressure from domestic lobbies while navigating the relations with Maldives. But that is not the case with Nepal. The results of the recent election to Nepal’s constituent assembly come as a joyous outcome for the Indian establishment. The Nepalese Congress, which is closely linked to the Indian elites and bourgeoise, has emerged as the single biggest party that would lead the new coalition government, while its coalition partner Communist Party of Nepal (United Marxist-Leninist) also happens to be an entity that Delhi can do business with. Most important, the United Communist Party of Nepal (Maoist), which the Indian establishment detested, has been routed. The irreducible minimum is that
the new political dispensation in Kathmandu can be expected to respect Indian interests. Considering also the umbilical cords that tie the Nepalese Army to the Indian military establishment and the ascendancy of the right-wing monarchists rooting for “Hindu” Nepal, India seems in command. But herein lies the challenge. Indeed, Delhi could make things difficult for the Maoists and when the political deadlock ensued in the drafting of a new constitution, the blame came to be put on the Maoists. But Maoists are far from a spent force and Nepal needs consensual politics in the difficult period ahead to draft a new constitution and stabilise the democratic polity. The role Delhi plays will be crucial. India needs to priortise: What comes first -- “influence” or stability? This is a fundamental choice India needs to make. Be it in Maldives or in Nepal, Indian policies should focus on regional stability. The critical need is to have a stable regional environment conducive for development. Taking a leaf out of Russia and Eurasia, India needs to come up with its own projects of Customs Union and South Asian Union. And as the region grows and integrates, India’s “influence” also will rise.
Read the author’s blog indrus.in/blogs/realpolitik
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA
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Business Report WEDNESDAY DECEMBER 11, 2013
TRENDS: Russia is the largest buyer of Indian tea, with its imports around 41 million kg per annum
NEWS
Indian tea stages a comeback in Russia
Japanese, Indian firms may join Yamal LNG project
AP
DADAN UPADHYAY Specially for RIBR
Japanese and Indian companies may take a combined stake of almost 10 percent in Yamal LNG project, which would benefit from broader access to Asian markets, Vedomosti said. The daily said that companies involved were Japan’s Mitsui and Mitsubishi Corp, and an Indian group involving ONGC Videsh, Indian Oil Corp and Petronet LNG. RIBR
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ndian tea has bounced back in popularity stakes in Russia. Thanks to a slew of innovative steps taken by the Tea Board of India and the Indian embassy in Moscow, tea exports to Russia from India surged in 2013, both in terms of quality and value. Today, Russia is the largest buyer of Indian tea, with its imports around 41 million kg tea per annum, mainly as bulk tea, which constitutes 25 percent of Indian tea exports. The Tea Board of India, under the chairmanship of M.G.V.K. Bhanu, launched a series of programmes aimed at restoring the “image of Indian Tea” in Russia, including public tea tasting, competitions and visits to tea growing areas, charity auction, publicity through social media and print media. The board has also been conducting “frequent and mass tea tasting and sampling” programmes during various festivals and events in Moscow and other regions of Russia. Indian tea videos, photographs and tea-related interesting stories were publicised through social media and YouTube. For example, at a charity auction held in Moscow, India’s Darjeeling Tea fetched the highest-ever
Uralmash and MIDHANI step up cooperation Uralmash and Mishra Dhatu Nigam Limited (MIDHANI) have taken the first step in cooperation with the Russian company supplying a ring-rolling mill for the Indian company. As part of the testing programme at the MIDHANI facilities, Uralmash’s rings of varying heights and diameters were rolled from different alloys, including heavyduty ones. The mill is scheduled to enter operation before the end of the year. RIBR
Arctic top priority region for Russian Navy in 2014
There were many reasons for India ceding its leading position to Sri Lanka in tea exports to Russia, which included collapse of barter system (rupee-rouble trade), strong growth in domestic consumption in India, dismantling of central purchase system, deterioration of quality of exported tea from India, demand for cheap Indian teas in Russian market, payment problems and diversion of export business to European and Middle East markets. An identity crisis gripped the Indian tea in Russia as traders started selling low-quality tea blended with other origin tea as Indian tea, which severely dented the image of the Indian tea in the Russian market. Even today people in Russia fondly remember the good old “Elephant” brand Assam Tea from India during the Soviet-era. Mercifully, this bad phase for Indian tea in Russia is over. Driven by consistent efforts made by the Tea Board of India and the Union Ministry of Commerce and Industry, the popularity of Indian tea is on an upward curve. Russians have again started liking the taste of Indian tea and are buying more and more of the Indian brands. Exclusive brands of the Assam, Darjeeling and Nilgiri tea have started reappearing in many retail chains and boutiques in Russia. Recently ORIMI
It is expected that with Russia’s accession to WTO, the customs duty will be reduced from 20 percent to 12.5 percent by 2017 shifted to specific teas and premium quality segments. Before the collapse of the Soviet Union, Indian tea was the sole tea available in the Russian market. However, after the break-up to the Soviet Union, teas from countries such as Sri Lanka, Kenya and Vietnam started coming to Russian market. Sri Lanka, with its aggressive marketing, became the number one supplier of tea to Russia, pushing down India to the second place.
Premium Indian tea brands are back in retail chains in Russia. Trade, the highest stakeholder in tea industry in Russia, launched an exclusive Premium Assam brand in the market, which was followed by other players like Mayski and Ahmed Tea. Within India also, the Tea Board has taken many steps to ensure the quality of tea being exported to Russia like registering the logos of Assam, Darjeeling and Nilgiri teas in Russia known as Geographical Indication (GI) as quality indicators. Earlier, several Indian tea makers had lodged complaints against the alleged dilution of GI of Assam, Darjeeling and Nilgiri teas through mixing of these teas with other varieties in Russia.
Recently, besides the GI brands of Assam, Darjeeling and Nilgiri teas, the demand for Indian Masala Tea in the Russian market is also increasing. According to experts, there is a lot of scope for developing the Indian Masala Tea as a health drink under a specialty tea category in Russia. It has already become a hot selling item in Indian restaurant chains across Russia. It is expected that with Russia’s recent accession to the World Trade Organisation (WTO), the customs duty will be reduced from 20 percent to 12.5 percent by 2017, which will be an additional advantage for Indian tea exports to Russia.
BUSINESS: Russia keen to attract more Indian investment, Putin says the two countries can ‘do bettter’
Providing a level playing field for foreign SMEs
Russian naval forces are set to make the Arctic a priority region, boosting combat training and scouting lesserknown areas of the icy territory in 2014, said Vadim Serga, spokesman for the fleet’s Western Military District. The Northern Fleet will conduct sailing and diving expeditions in the Arctic and develop ice-class patrol ships to protect the country’s interest in the region, he said. RIBR
Indian small and medium-sized businesses in Russia can count on the same support and protection as domestic companies VIKTOR KUZMIN RIBR
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ndia has considerably strengthened its positions in terms of trade with Russia, climbing five places to 18th in the blink of an eye, noted Russian business representatives at the Fifth Indo-Russian Business Forum, held in Moscow on November 19. The event was organised by the Indian Business Alliance (IBA) with support of the Indian embassy and the Business Council for Cooperation with India (BCCI) of the Chamber of Commerce and Industry of the Russian Federation. The forum took place under the auspices of two major Russian business associations: Opora Russia and Delovaya Russia. Last year, bilateral Russian-Indian
Iran in touch with Russia for nuclear power plant: Report
AP
Iran and Russia are discussing plans to build a new nuclear power plant at Bushehr, with construction set to begin next year, Iranian media reported citing the country’s nuclear chief. Ali Akbar Salehi told state broadcaster IRIB that Iran was negotiating with Russia a deal to produce 4,000 MW of electricity, and Moscow has “expressed its readiness to build.” The report comes a week after the Iran’s deal with the West. RIA Novosti
Q&A
trade reached $11 billion. According to a joint communiqué published this fall by Russian Minister of Economic Development Alexei Ulyukayev and Indian Minister of Commerce Anand Sharma, the two sides plan to make every effort to hit $20 billion by 2015. This commitment is backed at the highest level in Russia. Last month, Russian President Vladimir Putin said that the two countries can “do better.” Earlier this year, trade turnover between the two countries saw a brief slump, which seemingly caused concern in both Moscow and New Delhi. Both economies face quite serious challenges. India, for example, has encountered problems with the stability of its currency: “The collapse in the rupee is increasing import costs there and worsening the current account
deficit,” Dr William Wilson, a senior analyst at the Skolkovo Institute for Emerging Market Studies, told RIBR. “Both countries have seen a collapse in economic growth in recent quarters. If this were to revive, so would bilateral trade,” added Wilson. Nevertheless, the forum participants found reasons to cheer. Since the beginning of this year, over 55,000 Indians visited Russia for tourism and business purposes, said Russian State Secretary and Deputy Head of the Federal Migration Service Yekaterina Yegorova. “Russia is interested in economic development and investment flows, and in this regard, Indian businesses occupy an important place,” she remarked, adding that many Indians are working in Russia and about a quarter of the total are
highly skilled professionals. “An important area in the development of Russian law is to improve the climate for business people and investors. We welcome all citizens of India, and will create the right conditions for them here,” she stressed. According to Viktor Yermakov, Russian ombudsman for the protection of small and medium-sized business, from October 1, foreign investors who set up small and medium enterprises in Russia enjoy the same rights as domestic companies. They will be backed by an extensive programme of support in this sector on a par with Russian business. 100 billion roubles in credit at preferential rates will be allotted for the financing of export contracts alone, said the ombudsman. Furthermore, he spoke of the intro-
General Director and Chief Designer
PRESS PHOTO
Russia’s leading defence conglomerate Concern Agate is looking to step up its presence in India
PHOTOXPRESS
Can you shed some light on current projects with India? What do you think Agat can offer to India? We are witnessing a fundamental change in the approach of the Indian government and its navy authorities
towards equipping combat ships. India wants to acquire and install the equipment, but, more importantly, it wants to adopt the technology and access engineering solutions and design development. Agat can offer quite a few technical solutions as well as cooperation patterns. India is a special customer for us. The most interesting for the Indian customer would be complex combat management integrated systems for surface ships and submarines based upon acquisition and processing of data from different sources, including space vehicles, aircrafts, radars, acoustic means and operation centres for the navy. Which of your systems are currently used by Indian Navy? India is the first country in the world that received the Club missile system. The very name “Club” came up during negotiations with the representatives of the Indian Navy. Only after that was the system with the “Indian” name
“We envisage using the soaring Indian potential in design and engineering to jointly develop products and sell them to the third countries”
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oncern Morinformsystem-Agat, one of the Russia’s largest defence holdings, is engaged in designing, manufacturing of a wide array of radio-electronic systems that are installed in control centres on ships and units of the Russian Navy. Among export products produced by Scientific Production Association Agat, the core enterprise of Concern, are Club-S and Club-N Missile Ship-borne Firing Control Systems for submarines and for surface ships respectively, MR-123 and Puma Artillery Systemsm and radar stations. Georgy Antsev, General Director and Chief Designer of the Concern, spoke to RIBR about the growing Russia-India cooperation in the naval domain.
duction of a new mechanism in Russia to protect the rights of entrepreneurs against unlawful actions of authorities. Russia has climbed 20 places in the Doing Business rating this year. If this pace can be maintained, it will soon have one of the most favourable business environments of any country, said Yermakov. The forum made particular note of India’s progress in the pharmaceutical industry. Last year, India’s share of the Russian pharmaceuticals market stood at 4 percent. Said Ajai Malhotra, India’s ambassador to Russia: “Overall, there are some bright spots, but we need to put in an effort because we don’t have such good knowledge, appreciation of what can be done in each other’s countries. There is a need for more Indian investment in Russia.”
GEORGY ANTSEV
DEFENCE
‘India is a special customer, we are keen on tech transfer’
VTB first Russian bank to supply gold, silver to India
Vneshtorgbank (VTB) said it has become the first Russian bank to supply gold and silver bullion directly to consumers in India. VTB will partner with government-certified importers, banks and end customers of precious metals in the country. The first batches of gold and silver were successfully delivered in Delhi, Hyderabad, Jaipur and Agra. RIBR
record price of Rs 89,000 per kg of tea. The outgoing Indian ambassador to Moscow, Ajai Malhotra, also played an important role in popularising Indian tea during his official visits to different regions across Russia. With per capita consumption of 1.2 kg tea annually, Russia consumes 192 million kg per annum. Although the annual demand for tea remained more or less the same in Russia over the years, consumer preferences have
PHOTOXPRESS
Backed by innovative promotional drive and quality upgrade, Indian tea, which once dominated the Russian market, is regaining its popularity.
Club-K Container Missile System bought by the navies of other countries and became a full-fledged brand with a lot of modifications. Most of the Indian Navy surface ships and submarines are equipped with our products. Today it’s not only Russia-produced ships, but also those manufactured in India. As for the Club-U, it’s no coincidence that the Indians have chosen this modification, since the system can be supplied with Indian missiles PJ-10, developed by the Brahmos JV. Are you planning to establish a JV with Indian companies? A JV would mean that we are ready to settle in the Indian market, which is per se a very attractive idea as a JV can be established not only to manufacture modifications of our systems on the Indian territory, but to support the life-cycle of the products supplied
by the Concern, specifically its repair, modernisation, personnel training, etc. Today, there is much anxiety about fundamental changes in the Indian military industrial sector towards a broader participation of private enterprises and PPP (public private partnerships) in the defence sector. We welcome a more open and transparent approach to assignment of tenders, more consistent legislation that would not discriminate on the basis of a company’s origin. We are open for multi-track discussion with our Indian partners. How strong is the competition from Western companies in the Indian market? There are companies in France, Germany, the US and Israel that produce systems similar to those developed and manufactured by the Concern. I will just say that if we offer
our systems to India , – the country that today can choose suppliers from all over the world, it means that we are pretty sure our products are the best. Are there any specific advantages of Agat’s solutions that benefit India as a customer? First of all, it’s the versatility of the proposed technical means. Among our unique products that have almost no analogues in the world is CICS for submarines and attack weapon ship fire control systems. Secondly, in the frame of our partnership with India we are ready not only to supply weapons but openly cooperate in developing new arms and equipment with technology and development transfer. Most important, we envisage using the soaring Indian potential in design and engineering to jointly develop products and sell them to the third countries.
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA
D |E |F |E |N |C |E
Business Report WEDNESDAY DECEMBER 11, 2013
India, Russia to hold first joint air exercise
PROFILE: Commodore Suraj Berry lauds combat qualities of ‘floating airfield’
Berry’s big moment on high seas
A joint navy exercise has also been planned in Peter the Great Bay in the Sea of Japan in 2014. RAJEEV SHARMA Specially for RIBR
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n a major deliverable at the 13th meeting of the India-Russia Inter-Governmental Commission on Military Technical Cooperation (IRIGC-MTC) in Moscow on November 18, the two sides decided to hold the first-ever joint IndiaRussia Air Force Exercise next year. The two defence ministers, A.K. Antony (India) and Sergey Shoigu (Russia), who co-chaired the IRIGCMTC meeting, also decided that they will hold a joint navy exercise in the Peter the Great Bay in the Sea of Japan next year. This will complete the triad of Indo-Russian joint military exercises as the two countries’ armies had recently held Indra joint exercise in Rajasthan, with prime focus on anti-terrorism. Sitanshu Kar, chief spokesperson of India’s defence ministry, said that the two defence ministers agreed that there is a need for further cooperation at all levels, especially in view of regional and global challenges like terrorism. Both sides reviewed the situation in West Asia, especially in Syria and the evolving paradigm in Afghanistan.
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he commanding officer on the bridge is First Rank Captain Suraj Berry. Commander of INS Vikramaditya, the refurbished aircraft carrier that’s on a historic voyage to the Indian shores after being refitted in a Russian shipyard, he is your ideal sailor. He is all too aware of his obligations and believes in his team. Drafted into the Indian Navy in 1987, Berry has a formidable professional resume that includes service aboard the Subhadra coastal patrol vessel, the Pralaya missile boat, and the Ranjit, Ranvir, and Delhi destroyers. “I had the honour and privilege to be a member of the crew of the Delhi destroyer,” he said in an interview with Rossiyskaya Gazeta. “Onshore, I performed duties at the headquarters of the Western Naval Command and was as an officer — an expert in Frontier-E coastal missile battery operations,” he said.At Rhode Island, he graduated with honours; for operations after the tsunami in Sri Lanka and the Maldives, he was awarded the Vashist Sewa Medal for Distinguished Service, and during his specialisation courses, he was conferred the title “Best Multidisciplinary Officer.” Berry’s finest hour came when he was appointed as commander of INS Vikramiditya in March 2012. Asked how his family had reacted to this high point in his career, he replied laconically in military fashion: “They are happy and proud of the trust that our fleet has placed in me.”
Members of the Russian delivery team that prepared and tested the seaworthiness of the vessel spent more than 122 days with the Indian crew on the White and Barents seas. They noted the qualities of Berry’s leadership — his capacity for hard work, personal organisation skills, erudition, and exacting standards he set for himself and his subordinates. His attitude is encapsulated in his professional ethos: “Work honestly and responsibly in the service of your country and fleet. What’s good for the ship and the fleet is good for all. Make every effort to study and work in a team — the ship and crew come first.” “The Indian Navy is full of outstanding professionals, ready for any challenge, anywhere, anytime. I am honoured to be among them,” said Berry, who enjoys reading and music. In his rare free time, he plays badminton and golf, and goes sailing and hiking. During the tests, the aircraft carrier covered 1700 miles under Commodore Berry’s command. Moreover, during the period 20122013, 875 Indian officers and sailors gained practical experience aboard Vikramaditya. The most striking event was perhaps the first landing of a MiG-29 KUB on the deck of the carrier. Commodore Berry and his subordinates remember well the day and the hour — July 28, 2012, 0930 MSK — when MiG test pilots Mikhail Belyaev and Hero of Russia Nikolai Diorditsa touched down into the arresting gear of Vikramaditya with precision. The mood was one of joy and celebrations,
Commodore Suraj Berry’s motto: Work in a team.... the ship and crew come first.
Carrier to head to Karwar port soon INS Vikramaditya unmoored on the night of December 1 and approached the Russian city of Murmansk. The aircraft carrier is accompanied by the INS Trikand frigate and the Deepak tanker. Captain Vadim Serga, a spokesman for the Russian Northern Fleet, was cited by RIA Novosti as saying that the Indian ships will be refueled and will leave Russia’s territorial waters in a few days. After this they will head to Lisbon, and then to the Indian port of Karwar via Gibraltar and the Suez Canal. “Our ship is the largest in the Indian Navy. The displacement of the INS Vikramaditya is 45,000 metric tonnes and also has excellent manoeuverability. The ship’s power and agility guarantee its effective operation,” says Commodore Suraj Berry.
followed by debriefing and clearance for takeoff. The fighter taxied to the starting position, hit the afterburner switch, and after several seconds of acceleration tore away from the ramp. After multiple passes over the ship, the pilots performed another beautifully soft landing. “The safe, successful landing of the MiG-29 KUB and subsequent take-off was a dream long time in the making,” said Commodore Berry at the time. “It was the dream and goal of Sevmash, RAC MiG, and the Russian and Indian fleets.” “Together, we sought to turn the ship into an aircraft carrier. There were successes and failures along the way. But we were all focused on a positive outcome, and got the job done.” A year later, when carrier-based fighters (not to mention helicopters) had made more than 50 takeoffs and landings on Vikramaditya, Commodore Berry praised the combat qualities of the “floating airfield.” “The high class of the vessel has been confirmed by speed tests and night flights — all executed flawlessly.”
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ALEXANDER YEMELYANENKOV RIBR
PRESS PHOTO
It’s a dream come true for the Indian sailor to shepherd INS Vikramaditya to India.
Imparting a renewed thrust to IndoRussian strategic cooperation, the ministers agreed that the time has come to expand the cooperation not only in product design and development, which has made significant progress over the years but also to involve various echelons of the defence establishments in strategising policies and cooperation in the fast changing global security scenario, said Kar. Antony underlined that Fifth Generation Fighter Aircraft (FGFA) and Multi-role Transport Aircraft (MTA) are symbolised moving the relationship beyond that of buyer-seller. He stressed that both sides must give their best at all phases of the execution of these two projects- design, development and production, Kar quoted Antony as saying. Shoigu assured that the naval aviation specialists will train Indian pilots fully for take-offs and landing on INS Vikramaditya, which is likely to take place in Goa. The IRIGC-MTC meeting also reviewed issues relating to T-90 tanks and SU-30 projects.
Two defence ministers agreed on the importance of cooperation at all levels.
TECHNOLOGY: Over $4 billion has been allocated to develop three-ship series, which will take a decade to complete
New nuclear-powered icebreakers poised to change the game at Northern Sea Route Russia is blending innovation and commerce in building the next-generation icebreakers. RIBR
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ussia has begun building a fleet of new-generation icebreakers to support year-round navigation along the 3000-mile long Northern Sea Route. In a milestone of sorts, the keel for the first vessel of the threeship series was laid at St. Petersburg’s Baltiysky Zavod wharf in November. “Not only does it symbolise a resurrection of Russia’s civilian nuclearpowered shipbuilding, it also ensures that even in 40 to 50 years to come, our nuclear icebreaker fleet will continue working effectively in the Arctic and along the Northern Sea Route,” says Atomflot CEO Vyacheslav Ruksha. The first ship will be operated by
It symbolises resurrection of Russia’s nuclear-powered shipbuilding, says Atomflot CEO Vyacheslav Ruksha. Atomflot, Rosatom State Nuclear Energy Corporation’s arm responsible for the operation of Russia’s nuclearpowered icebreaker fleet. Atomflot currently operates four such icebreakers: Vaigach, Taimyr, Yamal, and 50 LyetPobyedi. It has one ship in reserve: Sovetskiy Soyuz. Russia’s 10th icebreaker Russia’s first nuclear-powered icebreaker, Lenin, was built during the Soviet days more than five decades ago. After its retirement the ship was turned into a museum in Murmansk. Three more Soviet-built nuclearpowered icebreakers - Arktika, Sibir, and Russiya - have also been written off by now.
The icebreaker under construction at Baltiysky Zavod has no name as yet. It will become the 10th nuclear icebreaker to be built since Russia’s independence. Rosatom deputy CEO Ivan Kamenskykh, who attended the keellaying ceremony, said construction of the other two ships in the series would begin shortly. Over $4 billion has been allocated for the entire project, which will take 10 years to complete. “The key feature of the new icebreaker [design] is its versatility,” says Atomflot representative Sergey Maklakov. “It will be able to operate both in deep-sea areas of the Northern Sea Route and in shallow shelf and estuary waters near the Arctic coast.” Thanks to this versatility, each vessel of the new design is expected to replace two icebreakers currently in operation. Atomflot is planning to mainly use its three new ships in the Western section of the Northern Sea Route to support large freight vessels, including bulk carriers from China, South Korea, and Japan. Growing traffic The keel-laying ceremony comes on the heels of a very symptomatic report: freight transit along the Northern Sea Route in 2013 has beaten a longstanding record. According to Atomflot spokesman Mustafa Kashka, 1.26 million tonnes had been transported along the route by mid-October, which is comparable to the result attained in all of 2012. Kashka says 51 vessels have navigated the route since the beginning of 2013, against 46 in all of 2012 and only 34 in 2011. The first two foreign commercial vessels to navigate the Northern Sea Route, in 2009, were the Beluga Fraternity and the Beluga Foresight. Supported by the icebreakers 50 Lyet Pobyedi and Rossiya, they safely
$4 bn allocated by the Russian government for building three universal nuclear icebreakers in the near future.
From Kara Gate to Bering Strait
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ALEKSANDER YEMELIANENKOV
The keel of the first vessel of the new-generation icebreaker was laid at Baltiysky Zavod wharf in November. passed from South Korea to their Nigerian port of destination; a traditional route via the Suez Canal would have taken them 10 days longer. Next year, eight to 10 Chinese-flagged ships may use the Northern Sea Route. A corridor of new opportunities Today the traffic through high latitudes is only 10 percent of that passing through the Suez Canal. But experts say that the situation is going to change as the shortcut between the European markets and those of the Asia-Pacific region passes through the Arctic, and this is a great opportunity to optimise transportation costs. When proceeding through high latitudes, the distance is reduced by one-third (34 per cent) compared to the so called reference route Rotterdam-Yokohama across the Indian Ocean. The travel time is reduced from 33 to 20 days. The fuel economy is up to 800 tonnes per
Now, get on a cruise to the North Pole Nothing is impossible if you are a wellto-do tourist. In October 2013, the Russian nuclear-powered icebreaker 50 Lyet Pobyedi delivered an international team of Winter Olympics 2014 torch-bearers to the North Pole. For the first time ever, a segment of an Olympic torch relay had reached the planet’s northernmost point. Shortly before that, the same icebreaker
“average” vessel.For the development and operation of the next–generation highway, Russia is not only building new icebreakers, but is also planning to make a special law on the navigation on the Northern Sea Route that will eliminate many questions, including those related to tariffs on ice wiring. “The Northern Sea Route could be one of the key global transport routes -
carried its 50th group of tourists to the North Pole. Such cruises, starting and ending in Murmansk, take around 10 to 12 days. They are expensive, at 25,000 euros per ticket. Still, there are always plenty of tourists from all over the world, including Japan, South Korea, Singapore, and the Philippines.The first such cruise was performed in 1990.
Russian leader Vladimir Putin assured the leaders of other countries on the forum called ‘The Arctic – a dialogue zone.’ But only if we manage to create a competitive environment for traditional maritime lines at the cost of their services, quality and safety”. And here you can’t do without a well-functioning icebreaker fleet - no matter what climatologists predict.
Northern Sea Route is the section of the sea passing along Russia’s north coast from the Kara Gate to the Bering Strait. It is used for transportation of goods between the the Russian Federation’s northern ports, and in recent years, for transit of goods between Canada, the countries of northern and western Europe and the countries of Southeast Asia. A prerequisite for the development of the Northern Sea Route is a nuclear-powered icebreaker fleet.
The most powerful fleet in the world Russia has the most powerful icebreaker fleet in the world, along with its unique experience in design, construction and operation of such vessels. Today, the current Russian nuclear icebreaker fleet has 5 nuclear-powered icebreakers, 1 container vessel and 4 technological service vessels. The goal is to ensure a stable operation of the Northern Sea Route and access to the Far North and the Arctic shelf. The nuclear fleet in Russia was developed in parallel with the national nuclear energy.
IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA
F |E |A |T |U |R |E
Business Report WEDNESDAY DECEMBER 11, 2013
FASHION: Uniforms morph into symbols of national image
Team Russia scores high on Olympic chic When the curtain goes up at Sochi Olympics, the spotlight will be as much on what the national teams wears as the athletes themselves. INNA FEDOROVA Specially for RIBR
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all it Olympic chic. Innovating new costumes for athletes has become a full-blooded passion in Russia. At the upcoming Olympic Games in Sochi, the Russian national team is expected to wear a red-blueand-white colour scheme, but the exact cut and materials has been kept a closely-guarded secret. Fans and athletes are expecting nothing short of spectacular. Since 1936, when each country was required to have a uniform for its team participating in the Olympic Games, the public appearance of Olympic athletes has become a way for countries to project their national image on the international stage. French athletes, for example, have worn the designs of Pierre Cardin and Yves Saint Laurent; Italian athletes get their uniforms from Giorgio Armani, and British competitors were given attire by Stella McCartney. In the Soviet Union, the decision on the uniform for the team was made at the highest levels of government and had to meet both ergonomic and ideological requirements. The uniforms were created by the
leading designers of the Soviet Union who worked for the All-Union Fashion House in Moscow, the main fashion design studio of the state. “They (Olympic designs) had to remain within the framework of consumer goods — this was pragmatism, not art,” said Russian designer Vyacheslav Zaitsev, who was the chief designer of the AllUnion Fashion House in the late 1960s. Yet, Soviet fashion designers occasionally managed to surprise the world. In 1960, at the Winter Games in Squaw Valley, California, Soviet female athletes walked out for the medal ceremonies in slim blue jackets and elegant blue pants. In 1964, in Innsbruck, the Soviet team descended from their plane in luxurious fur coats made of golden seal pelts. A special love for the Olympic uniform was nurtured in the Soviet Union itself. First, the Olympic costumes were of an excellent quality, completely different from the everyday clothing of Soviet citizens. Second, they had a particularly patriotic look. Many Russians who grew up in the Soviet Union remember dreaming of a sweatsuit with the proud inscription “U.S.S.R.” on the back. In a relatively brief period of time,
Team Russia has moved from sweatshirts to pullovers of the finest Italian wool. Today, iconic international companies design the uniforms for Russian Olympians. Since 2002, Russian firm Bosco di Ciliegi has held the title of official “image maker” of the Russian Olympic team. Olympic figure skating champion Alexei Yagudin remembers the 2002 Salt Lake City games as a turning point for Russian Olympic fashion: “I remember a time when we looked with envy at the skaters from the United States and Canada. But in 2002, in Salt Lake City, everything changed. Now everyone envied us! And the fans were noticeably happy,” Yagudin said. In 2006, the fashion house of Ermanno Scervino joined Bosco and Etro. At the opening ceremony of the 20th Olympic Winter Games in Turin that year, Russian athletes entered the stadium in stylish red-and-white suits that featured a twisting pattern. Svetlana Zhurova, who won gold in the 500-meter, women’s speed skating event in Turin, said of the uniforms that year: “Before, our Olympians were distinguished from others by the inscription on the back of our hoodies, but then they knew us by the pattern.”
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THE ARTS: He taught Bharatnatyam in Russia and abroad
A creative fusion of Indian dance and Russian music Dmitry Zmeyev has created a new genre blending Bharatnatyam with Russian music. ELENA KROVVIDI
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e fell in love with Indian dance when he was barely a teenager. It all began when Dmitry’s mother talked him into watching a Hindi film classic, Seeta and Geeta. He was reluctant at first but once he started watching he couldn’t tear his eyes off Hema Malini and her adroit dance movements. That chance encounter blossomed into a life-long affair with Bharatnatyam. There was a hitch though: in those days people in Russia thought Indian dances were only performed by women. But when Dmitry saw iconic Indian actor Kamal Hassan perform, “a revolution happened in my mind,” Dmitry confesses. “And that’s when I realised that this is more than a hobby for me, it’s my vocation, my life.” Dmitry soon immersed himself into studying Bharatnatyam with all the passion and self-abandon. In 1990 Dmitry Zmeyev had enrolled in the Gandharva Mahavidyalaya University of Indian Classical Dance
ALEXEI YAGUDIN Olympic figure skating champion
“I remember a time when we looked with envy at the skaters from the US, Canada. But in 2002, in Salt Lake City, everything changed. Now everyone envied us! And the fans were noticeably happy. SVETLANA ZHUROVA Olympic speed skating champion
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At the Sochi 2014 Olympics, the Russian national team will be wearing red-blueand-white uniforms, but no information about cut and materials is revealed.
in New Delhi. Six years later, he moved to the Triveni Kala Sangam Institute and Theatre while continuing his studies at Gandharva Mahavidyalaya University where he trained under a well-known Bharatnatyam performer and exponent of the Kalakshetra style, Jaya Lakshmi Ishwar. Under her tutelage, Dmitry also learned the art of playing talam, a percussion instrument used in Bharatnatyam as accompaniment (Nattuvangam). In October 1998,
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“Before, our Olympians were distinguished from others by the inscription on the back of our hoodies, but then they knew us by the pattern.
Watching Kamal Hassan perform was a turning point. Bharatnatyam became his vocation. Dmitry graduated from the Gandharva University. When he returned to Moscow, Dmitry started performing and giving master-classes in the Indian dance form in both Russia and abroad. He found a captive audience performing in Moscow, Voronezh, Tver, St. Petersburg, Rostov-on-Don, Barnaul,
Kazan, Minsk, Kiev, Riga, London and many other cities abroad. Now, he is often invited as jury member, special guest or presenter for various dance festivals. He set up a school of Indian classical dance, “Natya Rekha”, in 1999. Subsequently, Dmitry was to evolve into a multi-faceted creative artist, combining teaching of Bharatnatyam with acting and directing. He worked as a dramatic actor at the Stanislavsky theatre for eight years. He says his dancing skills helped him develop as an actor because of the complex dramaturgy of the dance itself. Russian director Igor Yatskov was delighted when he saw Dmitry perform Bharatnatyam because of the ‘compactness’ of the dance – music, rhythm and acting all in one. As an experienced teacher, Dmitry points out the most difficult things for a Russian person studying Bharatnatyam. “A body of a European isn’t originally fit for a deep plié, basic Bharatnatyam position. I, for one, had to study this particular element for a whole year. Our knees are bent inwards. And Indians can easily turn their knees outwards because it’s a natural movement for them. In India people often sit on the floor, kids sit on their mother’s hip. So they can bend their knees flexibly,” Dmitry explains. Buzzing with creative ideas, Dmitry has created a new fusion genre blending Russian performance with Indian choreography. He believes that there are similar plots and characters in Indian epics and Russian folklore, and intertwining Indian and Russian elements looked to him just the way to go. This new form has struck a chord, and has become hugely popular in Russia.
CULTURE: He fell deeply in love with India, learnt Sanskrit and taught his peers back home about the wonders of India
A Russian musician and linguist who created new “magic theatre’ in Kolkata EKATERINA ZABRODINA RIBR
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hey called him a dreamer, a vagabond and even a madman. But little did they know that decades later, Gerasim Lebedev will be justly feted as one of the founders of Russian Indology. A man of many parts, Lebedev excelled as composer, linguist, translator, poet, dramatist and theatre director.In retrospect, it would appear that he was destined to discover many of his talents in India, a country he seemed to be drawn to by fate. Lebedev longed to get out of Europe and head East, towards India. But Russians only had a dim understanding of what India actually was. Afanasy Nikitin’s travel notes were still unknown, and so, like his predecessor, Lebedev was heading into an uncharted territory. In February 1785, carrying his beloved cello, Lebedev boarded an English ship sailing from Portsmouth to the shores of India. From that time on Lebedev’s life took the form of an adventure novel.
After six months at sea the Russian traveller disembarked in Madras (now Chennai), one of the biggest colonial administrative centres in the southern India. He stayed there for two years, playing music to earn his living. He used this time to learn Tamil and made many attempts to find a teacher to learn Sanskrit. From there he moved to Calcutta – the capital of British India
He was the first of the sons of Russia to penetrate into Eastern India and to take their language to Russia. -- and spent the next ten years of his life there. Having fallen in love with Indian culture, Lebedev started to write his own music, inspired by both European and Eastern traditions. He was the first to fuse Indian melodies with Western musical instruments. In his third year in Calcutta Lebedev had his lucky break - a school teacher agreed to teach him
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Sanskrit. Lebedev also started to take lessons from him in Indian mythology, arithmetic and astronomy, and dedicated himself to learning Bengali and Hindustani. When he wasn’t studying, Lebedev found the time to translate two comedies from English to Bengali. He transferred the setting of one of these plays from Madrid to Calcutta, giving all the heroes Indian names. It was at this point he became obsessed with an ambitious plan to perform this play on the Indian stage. In the 18th century India, the English expats would perform in the theatres of the East India Company – but they were performed in English, for English audiences and with exclusively English actors. Lebedev set out to start a theatre designed for the local audience. Lebedev immediately rented and renovated a building with a stage and a hall for 400 spectators. He drew the stage decorations himself, and put together a repertoire of Indian folk dances and songs. His company consisted exclusively of local actors, including – horror of horrors – female actors, who had previously been forbidden from
the stage. The first performance attracted thunderous applause. The burgeoning popularity of the Indo-Russian co-operative made the English rulers jealous. They tried every dirty trick to stall the ‘Russian upstart’. Eventually, the English planted a set painter, Joseph Battle, to ruin Gerasim’s theatre from within. And, tragically for him, the schemer succeeded. Lebedev became bankrupt and almost ended up in jail because of his debts. With tears in his eyes he waved goodbye to this wonderful country and its hospitable inhabitants. Lebedev lived on till the age of 68. He dedicated his final years to teaching his peers about the wonders of India. To today’s readers Lebedev’s works appear somewhat naïve and even inaccurate, but he made a huge contribution towards bringing the two nations closer to one another. Fittingly, the India-loving Lebedev’s gravestone reads: “He was the first of the sons ofRussia to penetrate into Eastern India and having taken on the morals of the Indian people, he took their language to Russia.”
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Once derided as a dreamer and a vagabond, Gerasim Lebedev defied his critics to become one of the leading lights of Russian Indology and a pioneer of Indo-Russian cultural cooperation.
Author, translator of books in Bengali Gerasim Lebedev founded the first European-style theatre designed for the Indian audience in Kolkata in 1795. He compiled a small Bengali dictionary and wrote a book on arithmetic in Bengali. Later, Lebedev published ‘Grammar of the Pure and Mixed East Indian Languages’. His second book was based on his cultural experience and was titled
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‘Unbiased observations on Brahmin customs’. He set up a printing house equipped with Devangariī and Bengali scripts, the first of its kind in Europe, in St. Petersburg. He also translated the verses of the outstanding Bengali poet of the time, Bharatchandra Roy. In Kolkata, there is even a street named after Gerasim Lebedev.