India will give a loan of $1 billion to help the development of Far East Russia.
As announced by PM Modi on Thursday, New Delhi will walk shoulder-to-shoulder with Moscow in its quest for the development of the resource-rich Far East region. India will be extending 1 billion dollar line of credit for the development of Russia’s Far East region.
The Prime Minister, in the presence of Russian President Vladimir Putin, said – “For the development of the Far East, India will give line of credit worth USD 1 billion. My government has actively engaged East Asia as part of its ‘Act East’ policy,” during the plenary session of the 5th Eastern Economic Forum (EEF) in Vladivostok.
Modi emphasised that the friendship between India and Russia was not restricted to governmental interactions in capital cities, but was about people and close business relations.
What is Russia’s Far East region?
The Russian Far East comprises the Russian part of the Far East, the easternmost territory of Russia, between Lake Baikal in Eastern Siberia and the Pacific Ocean.
The Far Eastern Federal District shares land borders with Mongolia, the People’s Republic of China and the Democratic People’s Republic of Korea to its south, and shares maritime borders with Japan to its southeast and with the United States to its northeast. Although geographically part of Siberia, the Russian Far East is categorized separately from the Siberian Federal District to its west in Russian geographical schemes.
Indian firms have invested over $7 billion in taking stake in Russian oil and gas fields. India ventured into Russia when its flagship overseas firm ONGC Videsh in 2001 acquired a 20 per cent stake in Sakhalin-1 oil and gas field in Far East Russia.
OVL later bought Imperial Energy, which has fields in Siberia, as also stakes in Vankor oilfield in eastern Siberia.
Indian Oil Corporation and its partners have picked up 29.9 per cent stake in a separate Tass-Yuryakh oilfield in East Siberia.
Russian oil firm Rosneft in 2017 bought Essar Oil, which operates in Vadinar oil refinery in Gujarat and some 5,500 petrol pumps, for $12.9 billion.
Modi appreciated the vision of Putin for the welfare for Russia’s Far East, saying the President has opened up investment opportunities for India in the region.
Modi is the first Indian prime minister to visit the Russian Far East Region. He arrived in Russia for a two-day visit to participate in the 20th India-Russia annual summit with President Putin and the fifth meeting of the Eastern Economic Forum (EEF).
The Eastern Economy Forum.
A lot has been accomplished during the last 5 years: over 40 legislative initiatives that sustain investment activity and improve the social sphere have been passed; 20 advanced special economic zones and 5 free ports have been put in place. These measures resulted in over 1,780 new investment projects worth over RUB 3.8 trillion, and 230 new enterprises appeared. The government provides targeted infrastructural and financial support to the investors. Over 70 thousand people received free land and now are building houses and farms on their ‘Far Eastern hectares’.
17 different countries invest in the Far East: China, Japan, the Republic of Korea, Australia, New Zealand, Vietnam, to name a few. Since 2014, nearly 32% of all direct foreign investment came to our region.
The EEF focuses on the development of business and investment opportunities in the Russian Far East Region and presents enormous potential for developing close and mutually beneficial cooperation between India and Russia in the Far East region.