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Business Report

THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

WEDNESDAY MAY 8, 2013

DIPLOMACY: Infrastructure, mining, IT, pharmaceuticals, energy identified as focus areas

NEWS IN BRIEF

Three Indian ministers visit Moscow, trade high on agenda

© SERGEY MAMONTOV_RIA NOVOSTI

Russia’s Deputy Prime Minister Dmitry Rogozin (right) shakes hands with India’s Foreign Minister Salman Khurshid in Moscow.

AJAY KAMALAKARAN RIBR

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he Indo-Russian diplomatic calendar was busy in April when three Indian cabinet ministers visited Moscow in quick succession for talks on the entire gamut of bilateral issues. India’s External Affairs Minister Salman Khurshid was the third cabinet minister to visit Moscow after Home Minister Sushilkumar Shinde and Minister of Commerce, Industry and Textiles Anand Sharma made separate trips to the Russian capital. Khurshid and Russian Deputy Prime Minister Dmitry Rogozin agreed to give a fresh impetus to the Indo-Russian InterGovernmental Commission on Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC) by holding a regular intersession meeting in between

its two annual full-fledged sessions.“ I propose that we meet at least once in between regular sessions to discuss the full gamut of our cooperation in trade, industry, defence, science and technology,” Rogozin said, welcoming Khurshid at the talks.He also proposed to move the meetings beyond Moscow and New Delhi -- the capitals of the two countries. “We are two great beautiful countries, with an endless diversity of regions. I am very interested to travel to different cities in India, and I will be happy to take you to our next meeting to the Far East, the Urals, Siberia and Sochi, where we will be hosting the 2014 Winter Olympics,” he said. Seeking to expand their economic ties, which have remained much below the potential, the two sides agreed to set up a Joint Study Group in order to speed up the signing of the Comprehensive Economic Cooperation Agreement (CECA) with the

Russia offered technical help to India to set up a crisis management centre to deal effectively with natural and man-made disasters three-nation Customs Union of Russia, Belarus and Kazakhstan, which have formed a Eurasian Economic Space. Commerce Secretary Ravi Kapur told the Russian side at the meeting that India fully endorses the view that the proposed CECA will cover not just trade but also services, investments and intellectual property. Talks on the CECA were initiated when Viktor Khristenko, chairman of the Board of the Eurasian Economic Commission, visited New Delhi last month. During his Moscow visit, Sharma discussed a

Russia is going to get a fresh order of building three more Talwar-class stealth frigates for India later this year which is likely to be worth $3 billion. The frigates have substantially enhanced Indian Navy’s firepower in the region mainly because of their stealth capabilities. Informed sources told RIBR that the Indians have already orally conveyed their in-principle decision to Russia to construct three more Talwar-class frigates. A formal contract is likely to be signed after Russia delivers to India the third and final Talwar-class stealth frigate INS Trikand, expected in June. RIBR

potential agreement with Customs Union as well as bilateral trade with his Russian counterpart Andrey Belousov. Sharma said there would be several bilateral engagements in the run-up to the G20 summit in St Petersburg in September. These include a joint commission meeting held at the end of this month, to be followed by a trade forum. Commenting on the meeting with Belousov, Sharma said that the sides looked at “where the trade is during the period of global slowdown.” He stressed that during the meetings the two sides agreed to focus on cooperation in areas, including infrastructure development, mining, pharmaceuticals, communications, information technology and energy. “Apart from conventional defence cooperation, here we’re looking at cooperation in outer space and nuclear energy,” Sharma said. To enhance bilateral trade between India and Russia, the governments have to create an enabling and supportive environment, he said. “By setting this environment we encourage trade to take place. Ultimately, it is for private investors and public sector units to take advantage of this,” he said. Russia also offered technical help to India in setting up a central crisis management centre, modelled on Russian National Crisis Management Centre (NCMC), to effectively meet the challenges from natural and manmade disasters. The offer was made during the talks between Russian Emergency Situations Minister Vladimir Puchkov and Shinde. Before holding talks with Puchkov on April 10, Shinde visited the NCMC for first-hand information about the layout and equipment of the centre, special features of interaction of systems and subsystems of the Russian Unified System of Prevention and Elimination of Emergency Situations. “Russia has the latest monitoring and forecasting system and we would like to learn many things here,” Shinde said during the talks with Puchkov after his tour of the NCMC. The idea of Russian assistance for setting up a crisis management centre in India was initially proposed by India’s then Home Minister P. Chidambaram during talks with his Russian counterpart in June 2011.

Sechin named in Time’s 100 Influential People

PHOTOSHOT/VOSTOCK-PHOTO

India and Russia discuss a wide spectrum of issues, including ways to expand trade, signing of CECA with Customs Union, cooperation in nuclear energy and space

India to order 3 more Talwar-class frigates

The CEO of the world’s largest listed oil producer Rosneft, and one of Vladimir Putin’s closest lieutenants, Igor Sechin has been named in Time Magazine’s list of the 100 Most Influential People. The former security agent has been near the top of the Kremlin hierarchy since Putin’s first election win in 2000, but was propelled to the list by the high-profile purchase of TNK-BP by the state-owned giant Rosneft in a cashplus-shares deal worth about $60 billion last month. The former Deputy Prime Minister and Deputy Chief of the President’s Administration currently occupies no political post. RIBR

SC gives green light to Kudankulam The Indian Supreme Court on Monday gave its clearance for the Kudankulam Nuclear Power Plant project (KNPP) in Tamil Nadu being built with Russian help. The judgment has come on the 630th day of protests over the alleged not-up-to-the-mark safety features of the plant. With the SC’s favourable verdict, now it’s for the AERB to take the decision. The first unit of the two KNPP units of 1000 MW each is ready for commissioning subject to the AERB’s final clearance to the NPCIL. The AERB decision is likely to be conveyed to the NPCIL next week. RIBR

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POLITICS: Crackdown on dissent breeds resentment, critics sceptical of anti-corruption action

Putin 2.O crafts a strategy to burnish image

INS Sindhurakshak arrives in India

YULIA PONOMAREVA RIBR

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AFP/EASTNEWS

ike it or not, Russian President Vladimir Putin is still the most popular politician in Russia. But there are grim portents: the first year of his third term saw his confidence rating fall from 60% to 52%. Putin’s last election campaign was held against the backdrop of the largest antigovernment demonstrations in the history of modern Russia, which was spearheaded by the urban middle class.Over the past year, the discontent has gradually faded, and today his position is relatively comfortable. But is there any guarantee that the street protests will not erupt with renewed vigor? On the eve of the last presidential election, many analysts said that Putin needed to revamp his image and become “Putin 2.0” in order to win over the “angry public.”However, the opposition has repeatedly described the actions of the authorities over the past year as a “crackdown.”“Putin has come to the conclusion that change could result in vulnerability,” says Alexei Makarkin, first vice-president of the Center for Political Technologies. “He does not make concessions, since he believes that they will induce further concessions.” The headline-hogging event of Putin’s third term so far has been the trial of punk band Pussy Riot, whose members received two years in prison for singing “Holy Mother

of God, drive Putin out,” inside Moscow’s Cathedral of Christ the Savior. The litany of so-called authoritarian actions is a long one. The laws on mass rallies have been tightened and the trial of one of the leaders of the antiPutin protests, Alexei Navalny, accused of financial fraud, is underway. NGOs in receipt of funding from abroad and suspected of indulging in political activities have been assigned the status of “foreign agents,” which in the Russian language means “spies.” But Putin has not been entirely bereft of supporters. In fact, he has worked out a calibrated strategy to mobilise people on the basis of anti-Western, anti-liberal and nationalistic agenda. More than 1800 social organisations have joined the All-Russia People’s Front (APF), founded by Putin in May 2011 under the auspices of the ruling United Russia party. Of the 238 people elected to the State Duma in 2011 on the United Russia list, 80 represent the APF. “The APF unites people who are doers: doctors, teachers, miners,” says renowned sociologist Olga Kryshtanovskaya. “The format suits Putin — he feels at ease with these people and wants to understand the issues they are worried about.”“The party line is to consolidate ‘its own’,” says Alexei Makarkin. These “own” people (Putin’s core electorate) are, according to sociologists, residents of small towns and villages with secondary education who do not use the Internet.“They can be consolidated on the basis of conservative values,

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With the economy in drift, Vladimir Putin is resorting to conservative values to consolidate his support base.

President Putin still tops the list of popular politicians in Russia but his rating sank by 8%.

Growth slows down The main economic purpose of the government, in the words of Prime Minister Dmitry Medvedev, is to ensure annual growth of “at least 5% of GDP.” According to the Development Center under the Higher School of Economics, this year will see Russia’s economy grow by just 2.4%, “due to a lack of growth drivers.” In 2012, the rate of growth decreased from 4.3% to 3.4%. In 2012, FDI declined by almost 20% to $39 billion. Against this backdrop, Alexei Portansky, director of the Information Bureau on Russia’s Accession to the WTO, says “Russia’s upcoming membership of the WTO promises to be very difficult.”

anti-liberalism, and anti-Westernism,” believes Makarkin. Against the backdrop of scandals that have plagued United Russia, mainly involving undeclared assets abroad, Putin has charted a course to “nationalise the elites.” Officials have until July 1 to rid themselves of foreign bank accounts. Owning real estate abroad, however, is not prohibited. Late last year, Putin signed a law obliging civil servants to declare their expenses and those of family members.Last year also saw Russia’s most high-profile corruption scandal in recent years, resulting in the dismissal of Anatoly Serdyukov from his post as defence minister. Sceptics abound. “Regarding the government’s attempts to deal with corruption, nothing has really changed,” says Elena Panfilova of the Center for Anti-Corruption Research and Initiatives under the Transparency International Russia.

The INS Sindhurakshak, a diesel-electric submarine of the Indian Navy that underwent interim overhaul and modernisation at Severodvinsk-based Zvezdochka shipyard, arrived at the Mumbai port on May 3. The crew was greeted by Indian officials, staff of the Consulate General of Russia in Mumbai and the Russian Embassy in India. The general director of Zvezdochka, Vladimir Nikitin, was there a few days before the submarine’s arrival. INS Sindurakshak, which departed from White Sea on January 29, features 12 Indian-made systems for multiple purposes. RIBR

Public servants post 2012 earnings online Russia’s First Deputy Prime Minister Igor Shuvalov, according to tax reports posted on the president’s and the government’s websites, recorded the highest annual incomes at more than 226 million roubles ($7.2 million). This quite dwarfs last year’s earnings of President Vladimir Putin and Prime Minister Dmitry Medvedev, who each made under 6 million roubles. Medvedev earned more than Putin. Putin’s 2012 earnings amounted to 5,790,823 roubles, or 2 million roubles up on his 2011 income of 3.7 million roubles. RIBR


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IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

Business Report WEDNESDAY MAY 8, 2013

Infrastructure gap: Joint dam venture opens new doors

BUSINESS: Gujarat, Maharashtra identified as growth areas; Goa the next target

Log house trend catches on Eco-friendly wooden houses imported from Siberia are finding a new niche market in India.

Sridhar Cherukuri, CEO, Transstroy (India) Ltd , is upbeat about $3 bn Polavaram project.

ALEXANDRA KATZ RIBR

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ELENA KROVVIDI RIBR

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ith India planning to spend around $1 trillion on infrastructural projects, the country’s burgeoning economy ensures a growing market for those ready to bet on the India story. For now, the country’s poor infrastructure remains a serious deterrent to foreign investors. Russian companies are waking up to opportunities to plug this gap: an Indian associate of Russia’s Transstroy is working with Russian partners on major infrastructure projects. “We are more comfortable with Russian partners and the expertise they provide us in executing various projects,” says Sridhar Cherukuri, CEO and Managing Director of Transstroy (India) Ltd. “In our view and in practice, the services of Russian companies are comparatively cost effective than US or Chinese companies.” Transstroy (India) is leading an Indo-Russian consortium that is conducting work on the Polavaram or Indian Sagar, a mega-dam project in the state of Andhra Pradesh. The consortium of Transstroy-JSC EC UES was selected in October as the contractor to build the three main components of the $3 billion project, the biggest Indo-Russian joint venture project outside the defence sector. The components are a rock-fill-cum-earthen dam, spillway and penstocks for a 960-megawatt powerhouse. The Polavaram project is a multipurpose irrigation project that envisages the construction of a dam across the Godavari River and seeks to link the Krishna and Godavari rivers. It will help develop a vast irrigation system that would cover 15 out of 23 districts in Andhra Pradesh. The Godavari river basin has a surplus of water, while the Krishna river basin has a deficit. Environmentalists in India have raised objections to the project, which they argue could inundate several villages in Andhra Pradesh and the neighbouring state of Orissa. Asked about the environmentalists’ claims, Cherukuri highlights the benefits of the project for the agrarian economy of Andhra Pradesh and says the concerns of the neighbouring states would definitely be addressed. Before giving permissions for the construction of the project, the government of India was aware of the problems and the solutions required, he says. Cherukuri adds

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ussian log houses are poised to carve a niche market in India. Costlier than cement-andconcrete houses, but economical and more efficient in the long run, the log house is catching the fancy of buyers in many places in India, with Gujarat and Maharashtra showing the way. A host of companies has smelt an opportunity in Siberian forests. Leading the pack is Mumbai-based Maharaja Environment Technologies Pvt Ltd, whose Russia-educated director, Prabhat Ranjan Dubey, is in the forefront of selling the log house dream to rich Indians. His company imports Russian log houses from Siberia and has partnered with JSC “KLM Co”, one of the largest timber companies in the central Siberian region of Krasnoyarsk. With large logging and timber processing units and distributional companies, KLM sells its products both domestically and in Europe, China, Japan, Egypt and Turkey. India is the latest international market. “The advantage of a wooden house is that it will keep you warm all winter long and cool during hot summer. It really suits the Indian climate,” says Dubey, an alumnus of a Russian university. “In Siberia we live in the continental climate with an average annual temperature fluctuation close to 100 degrees, from -50 °C till +3°C in winter and upto +45 °C in summer,” says Irina Bor, commercial director at KLM. “The fact that our wooden houses can be used in such different climate conditions attracted attention in many countries. We became competitive, technologically and financially, with products from Scandinavia and other countries.” In India, ready-to-assemble logs are imported from Russia and then as-

A log house, imported from Russia, is being assembled in India by Russia-trained Indian workers.

Rs.15 million is the average cost of building a log house in India, which is assembled in the country after being imported from Russia. sembled at the spot by Maharaja’s local workforce that has received special training in Russia. Mumbai-based Irina Kirillova, a Russian-official at Maharaja, says a standard log house can be assembled by 5 to 10 people within a month. It, however, takes almost five months from the moment an order is placed till the finished house can be handed over to the customer. Maharaja has show houses in Panvel, the outskirts of Navi Mumbai,

and Lonavla. The company positions its wooden houses as a second home or a weekend residence. The cost of a wooden log house in India works out to around Rs 3000 per square foot, double of the cement construction cost. “Comparing to the concrete construction where one has to pay for finishing first and further for maintenance, wooden house becomes even a cheaper option ten years down the line,” says Manish Wakde of Katyayani Infracon. He estimates the cost of concrete building along with finishing as about Rs 3650 per square foot, while wooden houses will cost somewhere around Rs 4000-4500 per square foot. Agrees Irina Bor of KLM: “If a wooden house was assembled properly, it will stay as it is for 70-100 years.” Wakde hopes to reach projected sales target of 50-60 houses per year

in 2013, targeting customers ready to pay Rs. 1.5-2 crore for a log house. In Gujarat, Maharaja has partnered with India Green Reality Pvt Ltd based in Ahmedabad. The company is developing two projects in Gujarat and Kolkata under the name of Greenland Eco Village. “In Gujarat, we are planning to build about 300 houses. In Kolkata, we plan to develop a 300-acre residential complex. There, we were also planning to build log cottages,” says Vinod Thakur, a director at Green Reality Pvt Ltd. Maharaja is also eyeing north and northeast India. “Goa is an ideal place for wooden resorts as cement construction is not allowed in many areas, mostly near the sea shore. We have about 500 clients all over India. But this is just the initial stage of market penetration,” says Kirillova.

Shifting sands: Why India-Iran tango won’t annoy US M. K. BHADRAKUMAR Foreign policy analyst

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he Iran-Pakistan-Afghanistan triangle figured prominently in India’s foreign policy compass recently. Three significant developments overlapped – the murderous attack on two prisoners in Pakistani and Indian jails with one dead and another critically wounded, Washington’s announcement of former diplomat James Dobbins as the US special representative for Afghanistan and Pakistan and the eruption of border clashes on the Durand Line. It was against this complex backdrop that External Affairs Minister Salman Khurshid set out from Delhi May 3 on his visit to Tehran. In geopolitical terms, Pakistan’s tensions with India hogged attention, but Dobbins’s appointment introduces an intriguing element insofar as he is a staunch believer in the US-led war in Afghanistan and he is appearing at a point when the war is being wound up.

Khurshid’s talks in Tehran may seem an act of “strategic defiance” of the US, eroding the robust US campaign to “isolate” Iran, but on closer scrutiny, the India-Iran tango need not worry Washington. Khurshid’s talks had two main outcomes – potential Indian investment of $100 million dollar to develop Chahbahar port and Iran’s invitation to Indian companies to invest in production sharing oil exploration. The connectivity that India hopes to develop with Central Asia via Chahbahar and a parallel proposal to negotiate a trilateral India-IranAfghanistan transit agreement would help the stabilisation of Afghanistan, which is also a key objective for the US. There are seamless possibilities for India-Iran cooperation with regard to the post-2014 Afghan scenario, but then, Iran relentlessly opposes the American military presence in Afghanistan while India views the US

presence in positive terms. On the other hand, the resurgence of PakistaniAfghan tensions strengthens the raison d’etre of the new Silk Road via Iran. India is unlikely to pursue a ‘strategic defiance’ of the US regional policy with regard to relations with Iran. India took a “principled position” that it will only abide by the UN sanctions against Iran but the ground reality is that the US’ sanctions regime whittled down Indian imports of Iranian oil by 26% last year and an uneasy “truce” prevails whereby India maintains it still imports Iranian oil, while the US claims satisfaction that Tehran’s Indian earnings have been substantially reduced and sees no reason to “blacklist” Indian companies. Meanwhile, New Delhi uses the “Iran card” to leverage the pending decision in Washington to relax export controls on LNG supplies to India. India’s argument is persuasive: How could Washington hurt India’s energy security by blocking oil imports from Iran while also disallowing LNG exports to India? Khurshid has visited Tehran just ahead of the India-US Strategic Dialogue slated for next month. The Iranians see the urgency of injecting

some “additionality” into economic ties with India. Hence the oil offer, which signifies a major departure from Tehran’s traditional policy to restrict foreign oil companies to service contracts at a fixed fee. Tehran probably hopes this will be seen as a hugely attractive offer by New Delhi, underscoring the geopolitical reality that Iran is an indispensable partner for India, the prospects of LNG supplies from the US notwithstanding. Clearly, Iran is bending over backward to promote Indian investments and to explore the possibilities of investing its surplus rupee funds (out of export of oil) in the Indian economy. But the Iranian efforts can’t make headway unless New Delhi shares the same degree of commitment to build the partnership and encourages the Indian corporate sector, which is otherwise timorous about American wrath. So far New Delhi has maintained an attitude of “masterly inactivity” – neither stymying the Iranian overtures nor pursuing them keenly enough – with an eye warily cast on Washington. The heart of the matter is that the US is the elephant in the Indian-Iranian tent and although Tehran doesn’t care about its presence, New Delhi is acutely conscious of it. It is, however, too early to say Khurshid’s visit to Iran signifies new Indian thinking.

Read the author’s blog indrus.in/blogs/realpolitik

Filling India’s infrastructure gap An upbeat Cherukuri says Transstroy (India) Ltd is one of the fastest growing infrastructure and construction companies in India. The company was incorporated in 2001 and operates from its corporate office located in Hyderabad. Starting with projects in the irrigation and road sectors, the company gradually diversified to hydropower, metro rail and port sectors. Apart from Andhra Pradesh, the company is also executing projects in Assam, Tamil Nadu, Kerala Madhya Pradesh, Karnataka and Chhattisgarh. Since inception, the company’s motto has always been to reduce the lead time to begin work so that there is no delay in executing the project, says Cherukuri. This approach helped us complete the Bhopal by-pass project three months before schedule -- a feat that earned plaudits from Madhya Pradesh Chief Minister Shivraj Singh Chauhan. Transstroy (India) has also worked with Russian partners on the construction of the Outer Ring Road of

In our view, the services of Russian companies are more cost-effective than the US or Chinese companies, says CEO Hyderabad. Cherukuri says the company is currently working only with Russian companies and does not have other international partners in their infrastructural projects. He, however, adds that the company would be interested in participating in developing potential infrastructure projects in Russia as well. Transstroy (India) is currently executing 15 highway projects in India. The company is also executing two irrigation projects in Andhra Pradesh, one major hydro power project in Assam, one 400 MW gas-based power project in Andhra Pradesh and three port projects in Tamil Nadu. Transstroy (India) is handling orders to the tune of $3.8 billion in infrastructure projects at the moment, says Cherukuri.

Full story indrus.in/23945

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BIG PICTURE

that the company has all the necessary environmental clearances to go ahead with the project. Over the last ten years, India’s environment ministry has been strict in issuing clearances.

Sridhar Cherukuri, Chairman, Managing Director and CEO, Transstroy (India) Ltd (inset). The Sri Komaram Bheem Project in Andhra Pradesh that the company executed.


IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

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Business Report WEDNESDAY MAY 8, 2013

INTERVIEW

SERGEY KOROTKOV

Russia hopeful of sealing MiG-35 deal with India Sergey Korotkov, General Director of the MiG Corporation, recalls the decades-old relationship of trust with India and is upbeat about the company’s plans to supply cutting-edge military hardware. ALEXANDER TOMAS

Curriculum vitae

Specially for RIBR

ITAR-TASS

Born in 1959, Sergey Korotkov, CEO of Russian Aircraft Corporation MIG, graduated from the S.Ordjonikidze Moscow Aviation Institute. He has carved a niche as designer of cutting-edge war machines. He spearheaded the tests of Su47 “Berkut” aircraft. He has won many awards, including the Order of Honour and the Russian Federation Government Prize Winner.

Russia will train Indian pilots to operate MiG-29K/KUB aircraft for the Vikramaditya carrier. Are Indian pilots being trained to operate MiG-29K/KUB aircraft for the Vikramaditya carrier? On April 20, a contract was signed between India’s Ministry of Defence (MoD) and RSK MiG, according to which we are to train Indian pilots to fly the MiG-29K/KUB. It consists of two stages. The first stage is set to commence in Russia ten weeks before the Vikramaditya is handed over to the Indian Navy this year. Training in accordance with the very latest standards and requirements will continue in India. RSK MiG is helping to build a training ground in India to instruct pilots in operating carrier-based aircraft.

The basic contract for the delivery of 16 MiG-29K/KUBs for VIkramaditya was successfully fulfilled. They are all based in India now. Last year, another four aircrafts were delivered under the second contract. This year will see Russia deliver the next batch of four aircrafts as per its contractual obligations. What are your expectations about future cooperation between RSK MiG and India? Our expectations are primarily related to the MiG-35. Despite losing the tender to supply the IAF with 126

multirole fighters, RSK MiG fulfilled all the requirements by the tender committee. The aircraft demonstrated good results, occasionally surpassing expectations. As part of the knowhow that India picked up in the course of the tender, I would like to see the MiG-35 continue to feature against the backdrop of our shared history and 50-year partnership. We expect India to consider the option of concluding a contract for the supply of the MiG35, and we will be able to fulfill it. The negotiations are at an advanced stage. We expect them to sign a contract this year. A MiG-35 prototype is already

MILITARY: Operational testing to begin in 2014

5th-Gen jet design completed, R&D contract soon: Sukhoi India is set to buy 144 FGFA and allocate $35 bn for purchase and maintenance of fighter aircraft. ARTEM ZAGORODNOV RIBR

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he 5th-generation fighter, the most ambitious joint RussianIndian military and technical cooperation project, is moving forward. Sukhoi, the Russian aviation company, has struck an upbeat note mid-April, saying the contract to develop a sketch and technical project of the multifunctional 5th-generation jet (PMI/ FGFA) has been completed. The fighter‘s design has been fully developed. Both parties have agreed upon on the amount and division of work during the research and development (R&D) stage, the company said. A contract for the R&D is being prepared and will be signed this year, it added. The FGFA fighter is being developed on the basis of Russian T-50 fighter, which is expected to start operational testing in 2014. The first stage of the state trials will be completed by 2015. The agreement on the joint development and production of the FGFA was signed in October 2007 in Moscow. In December 2010, Rosoboronexport, Sukhoi company and the Hindustan Aeronautics Limited (HAL) signed a contract to develop a sketch and technical project of the fighter. During the first stage of the project, the Russian side has trained Indian professionals, provided them with original data and the software to create a single working environment. The Indian working group of experts has been working in

Russia since January 2012 and Russian specialists are in India. The fighter will have some differences from the Russian prototype due to specific requirements of the Indian Air Force. India plans to acquire 144 FGFAs and allocate around $35 billion for the purchase and maintenance of

the jets for the next 20 years. In 20152016, India will get the prototype of the aircraft. The IAF, which previously wanted to buy double-seat version of the aircraft, has decided to purchase only a single-seater due to forbidding costs of the former. Sukhoi is involved in other joint programmes, such as the modernisation of the IAF’s Su-30MKI fighters and adaptation of the RussianIndian air-to-ground BrahMos cruise missile to the Su-30MKI.

FGFA is the largest joint military project

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ow do you assess the current partnership between RSK MiG and India? The successful partnership between RSK MiG and India was laid down 50 years ago, when the then leaders of our countries, Jawaharlal Nehru and Nikita Khrushchev, took steps to promote friendship between people of the two countries. The 1962 agreement on the supply of MiG-21 planes, and the subsequent contract for the production of fighters by Hindustan Aeronautics Limited (HAL) under license to the USSR, is the foundation on which we are now able to implement other projects in the spirit of fruitful cooperation. We do not just sell aviation equipment, but also transfer technologies to develop production in India, namely industrial centers and repair facilities.

MiG-35 is the first Russian aircraft fitted with active electronically scanned array radar. airborne. We hope to sign a contract in the first half of 2013. Since 1971, the IAF has lost 482 MiG planes. Have you met officials of India’s defence ministry to discuss the causes of the accidents? Russia and India set up a working group comprising experts from both countries. They discussed the problems and drew conclusions, thanks to which, since 2004, the number of inflight incidents and actual accidents has fallen sharply. The machine was engineered over many years, and numerous pilots have experience of

it. That formed the basis of the findings. It also needs to be understood that the aircraft operating conditions in Russia and India are very different. The contract consists of two parts: the delivery of modernised aircraft to India and the supply of component kits to upgrade them domestically. Three aircrafts have already been delivered, and three more are due to be delivered this year. Component kits have also been supplied. We cannot disclose the cost of the upgrade, but it will end up far cheaper than modernising the Mirage-2000, especially for India, our trusted friend and partner.

JSC United Aircraft Corporation (UAC) president Mikhail Pogosyan said that RSK MiG could get involved in transport aircraft programs. We are already in collaboration with Ilyushin Corporation, which is involved in the development of a multi-purpose transport aircraft for India, and other such projects. RSK MiG contributed to the design documentation, and intends to continue its involvement in the project.

Full interview indrus.in/24091


IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA

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Business Report WEDNESDAY MAY 8, 2013

TRAVEL: Next time, step out of Moscow to experience the fairytale world where beauty and devotion blend in unique harmony

LORI/LEGION MEDIA

Retracing glory & grandeur of old wooden churches Richard Davies’ book celebrates splendour of Russia’s centuries-old forgotten wooden marvels RIBR

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ew things seem so typically Russian to foreign travelers as wooden buildings. For those wanting to see old, wooden churches in remote and natural settings before it is too late, Richard Davies, the author of “Wooden Churches: Travelling in the Russian North,” suggests staying in one of the northern towns or cities like Arkhangelsk, Kargopol or Onega. The author, a British architectural photographer, recommends Petrozavodsk as a base from which to visit the staggeringly beautiful churches at Kizhi. “I have never seen such an architectural fantasy as at Kizhi. You can’t help thinking that you really are on the threshold of some fairytale kingdom,” wrote famous Russian artist Ivan Bilibin memorably. Many of the churches Davies photographed are clustered around the White Sea coast

or along the Dvina and Onega Rivers. Malye Karely collection near Arkhangelsk is one of the author’s favourites. The five-domed Church of the Ascension and other gems of 17thcentury architecture have found a picturesque new home here, even if they have lost some of their authenticity. The Vitoslavitsy Museum near Veliky Novgorod is another great collection in an evocative setting. There are similar museums in Suzdal and near Vologda, in Semenkovo, a short taxi ride out of town. The wonderfully wooded hilly park at Kolomenskoye, just 20 minutes south of central Moscow, has its own museum of log churches and castle stockades. The 17th-century threedomed wooden church of St. George is an absolute delight. There is a working wooden church, dedicated to St Nicholas, in the “Kremlin” at the Izmailovsky craft market in eastern Moscow. Everything

about the fairytale landscape here is unashamedly fake. It was all built from wood-clad concrete about 15 years ago, but it is still quite a scenic area, a great place to buy souvenirs and there are some genuine imperial remains on a nearby island. The intricate Church of St. Tikhon in Sokolniki Park in northern Moscow is also a working church with an interesting history and attractive surroundings. Another hidden gem in Moscow’s northern suburbs is the church of St. George in Voikovskaya. On the other side of the Timiryazevsky Forest, near Timiryazevskaya metro, is the Church of St. Nicholas. Modelled on designs by the great Art Nouveau architect Fyodor Shekhtel, the original church was consecrated in 1916, not a great moment for religious buildings. Many of Moscow’s incredible monasteries include wooden chapels, often a simple structure over a well. One such building can be found as part of a

MONEY: Usmanov, Russia’s richest man, has $17.6 bn fortune

A new club of jetsetting Russian billionaires From metals to football clubs and Facebook, Russia’s 100 billionaires have eclectic taste. 12 tycoons make it to Forbes’ 100 Richest List. ALEXEY PETROV RT.com

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ussia’s billionaires are a breed apart, and this charmed class of yacht-buying oligarchs, eccentric money-makers and jet-setting philanthropists is making a big splash. The influential Forbes magazine recently published its 10th anniversary edition of the country’s ultra-wealthy businessmen. The bar is high: to be considered for Russia’s ‘Golden Hundred’, one’s fortune must be at least $500 million.Russia is home to 100 billionaires - 11 Russian businessmen made it to the Forbes ‘100 Richest’ list in 2013. Alisher Usmanov, owner of Metalloinvest, is officially Russia’s richest man, with a staggering fortune of $17.6 billion.Next in the list is Alfa Bank’s largest shareholder, Mikhail Fridman, who boasts a fortune of $16.5 billion. He is followed by Leonid

Michelson, a major shareholder in Russian gas company Novatek with assets of $15.4 billion. Russia’s richest man isn’t Russian by birth. Born in Uzbekistan, Usmanov first made his fortune in metals, and has since transitioned his investments into telecom and start-up industries. He is the owner of Metalloinvest, one of the largest iron ore and hot briquetted iron producers and suppliers in the world. The company recently acquired Udokan, a copper and nickel producer, which has 14.4 million metric tonnes of copper. His shift from commodities to technology has paid off for the magnate, as now almost half of his wealth is tied up in telecommunications, internet, and media services. He has expanded his fortune dabbling in the Russian telecom industry and Silicon Valley start-ups. Usmanov, who is reported to have spent more than $300 million on a pri-

REUTERS

RG ITAR-TASS

Russia’s billionaires clockwise: Alisher Usmanov, Mikhail Fridman, Leonid Michelson.

vate jet last year, has diverse interests, including a 10% share in Facebook and stakes in Arsenal football club. This is the second year in a row Usmanov has topped the list, and his tenth straight year within the top 36 richest Russian businessmen. Viktor Vekselberg, owner of Renova, has made it to the top five with $15.1 billion, and in sixth place is the President of Lukoil, VagitAlekperov. In eighth place is Vladimir Lisin, a former steelworker who now owns Novolipetsk Steel, Russia’s most valuable steelmaker, which gained 8.9% in mid-April giving the company a market cap of $1.1 billion, according to a news agency. This much-needed recovery came after the low steel prices of 2012 had chipped $1.8 billion from his fortune. In ninth place is Vladimir Putin’s right hand man, Gennady Timchenko, a dual Russian-Finnish citizen, and a highly influential energy and construction magnate in Russia. In the tenth place is alpha oligarch, and former presidential candidate, Mikahil Prokhorov, with a $13 billion fortune. Prokhorov, like Usmanov, made his fortune in mining, metals, and energy, and switched over to technology pre-crisis. He bought an 80% share in the New York Nets basketball team, for $200 million in 2010. Just shy of the top ten is Dmitry Rybolovlev, whose $9.1 billion net worth landed him the 14th position. Rybolovlev reportedly bought a Greek island for $100 million, outbidding celebrity billionaires like Bill Gates, Madonna, and Roman Abramovich, who were also eyeing the island. Roman Abramovich found himself outside of Russia’s top ten, and is now 13th domestically, and 107th worldwide.The Chelsea football club owner lost $1.9 of his fortune in 2012, putting his 2013 wealth at just $10.2 billion Beating all Russian billionaires on the Forbes overall list is Sergey Brin, a former Russian national and founder and CEO of Google. Brin’s bank account far exceeds all his former compatriots, at $22.8 billion. Forbes has been documenting the world’s richest people since 1987, and Russia’s richest since 1997. Boris Berezovsky topped Russia’s ultra-rich list in 1997, with $3 billion net worth.

picturesque ensemble in the village of Kosino, east of Moscow. The wooden St. Tikhon chapel is nothing special, but the atmosphere of the cloistered, waterside garden by the Beloye Ozero (white lake) makes it worth visiting. You can catch a bus from Vykhino metro station and then walk around the lake. For a day trip from Moscow, you could try Melikhovo, where iconic author Anton Chekhov had his country house. The restored wooden church in the village is just a short stroll from his dacha. LORI/LEGION MEDIA

PHOEBE TAPLIN

See a guide to the finest wooden Russian orthodox churches.

Church of the Transfiguration on the Island of Kizhi in Russia’s Northwestern region of Karelia is like walking into a fairytale world.

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Finding peace and fortune in yoga ELENA REVINSKAYA RIBR

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n Indian yoga system is creating a big splash in Russia. While yoga and Indian spirituality have always fascinated Russians in quest of mental calm and spiritual depth, the success of Sahaj Marg, a heart-based meditation system focused on meditation, inner cleansing and prayer, in Russia is nothing short of spectacular. It all started when a young Indian student in Minsk started spreading the Sahaj Marg in the USSR in 1987. Now, it

has more than 1500 centres spread out all over Russia in places like Moscow, St Petersburg, Murmansk, Chelyabinsk and Novocherkassk. The Moscow centre is supported by the Indian embassy. A seminar on Sahaj Marg is held in an ashram in Chennai every year and this year, 700 people from Russia participated in it. The appeal of yoga goes much beyond spirituality. I recently met a Russian couple, Igor and Alla, in Bangalore, who have been coming to India for several years and have become spiritual teachers. Many Russian

girls come to India not only to learn yoga, but to become certified yoga teachers. This is a great way to make a fortune in Moscow, where a certification from the land of yoga carries a lot of weight. There are some newly certified yoga teachers who have become as flexible and professional as many Indian masters and look to spiritually guide their compatriots back home.

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