India is planning to make a strong pitch to Russian industry to invest in the proposed petrochemical and petroleum investment regions (PCPIR) as both countries seek to widen bilateral economic engagement during Prime Minister Victor Zubkov's visit to the subcontinent this week.
The PCPIRs would be specifically delineated investment regions for manufacturing facilities for domestic and export led production in petroleum, chemicals and petrochemicals along with associated services and infrastructure. The PCPIR policy was launched in May last year and the government is anticipating an overall investment of $20 billion.
"India is in a position to supply quality chemicals at competitive prices and Russia may explore the possibility of meeting their chemical, dyestuff and pesticides requirements from India," an industry ministry official said. The official said India would suggest Russian investors would look at the proposed PCPIRs as a possible investment destination to meet their chemical product needs.
"Russian companies may also benefit by outsourcing of research and development (R&D) work in the chemical sector to Indian companies," the official said. Russian Prime Minister Victor Zubkov would arrive in New Delhi on Tuesday accompanied by a 150-strong delegation of CEOs of top Russian companies.
Several Indian states, including Gujarat, Karnataka, Andhra Pradesh and West Bengal, have already set the ball rolling for mega PCPIRs largely anchored around existing projects of public sector oil companies. India-Russia bilateral trade has remained sluggish over the last 10 years inching up from $1.3 billion in 1996-97 to $3.3 billion in 2006-07.
"India's trade has gone up many times over the last 10 years with almost all the leading economies of the world. But with Russia it depicts a state of lethargy," an official of the Federation of Indian Chambers of Commerce and Industry said. He said that Indian private sector companies have very little presence in Russia. Total investment by India in Russia stood at $2.83 billion in 2006, but most of these are public sector-led investment focused on the oil and gas industry.
Russian investment in India is also minimal amounting to a mere $59.18 million, representing about 0.14 per cent of the total FDI received by India from 1991 to 2006. Zubkov's visit follows Russian President Vladimir Putin' s visit last year, when several issues were discussed to widen the scope of economic engagement between the two countries.