Russian President Vladimir Putin has directed Prime Minister Mikhail Fradkov to speed up efforts to find an amicable solution to the rupee debt repayment issue by India so as to facilitate fast-paced investments in high-technology ventures.
Addressing the first Kremlin meeting of the Russian Cabinet after his return from a two-day New Delhi visit, Putin said India and Russia are both interested in investing accumulated rupee funds in hi-tech projects.
"I request you to take control and reach a final agreement on the use of rupee debt India owes to the Russian Federation," Putin asked Fradkov on Monday in the meeting televised by the state-run channel Rossia.
According to various estimates, India owes USD 900 million towards repayment of Soviet debt.
India has agreed to utilisation of this fund by Russia for investments in the Indian economy. However, Moscow is not willing to accept the lock-in period of five years for such investments.
Earlier, Russia had used the rupee funds for 49 per cent stake in Indo-Russian BrahMos cruise missile joint venture and plans to invest them in the joint development and production of multi-role transport aircraft and fifth generation fighter.
Originally in 1996, as deputy mayor of St Petersburg, Putin had mooted the idea of investing the whole of Indian rupee debt in state-backed hi-technology and defence projects.
However, even after his election as the President for the second four-year term, he could not break the resistance of his finance ministry. In an interview on the eve of his New Delhi visit, he had blamed the bureaucracy and red tape in both the countries for delays in the execution of projects.