The insights on how the country –partner of INNOPROM is building up its industrial strength and preparing to take part in the exhibition in Ekaterinburg
INNOPROM-2016 is going to take place in Ekaterinburg from 11th to 14th July. This time India is the partner-country. Delegations from three Indian states will visit the exhibition, more that 100 Indian companies will be showcased at Ekaterinburg-EXPO halls. Prior to this unique event our journalists and other Russian media representatives went on a trip to India. We could see with our own eyes how technologies are being implemented, infrastructure is being created, business is conducted in this country that is one of the fastest growing economies in the world.
Before the trip we spoke to Mr. Pankaj Saran, the Ambassador of India to Russia in Moscow.
– India is not only about elephants and snakes, – said Mr. Saran. – We have 900 million mobile users, we are the second largest market for civil aviation, we are building metro in 50 cities in India. India is the fastest growing economy in the world. Our current growth rate is 7.5% and we hope to achieve 9-10% in the next 2-3 years. Businessmen in India are very ambitious.
Indian Ambassador was sad to state that trade exchange between our countries has significantly reduced since the USSR times. He is sure that the relations between our countries have great potential and direct contacts between regions and businesses will help a lot in building these relations:
– Three major Indian states will take part in INNOPROM. We need to initiate direct communication between Russian and Indian regions, contacts between Moscow and Delhi are not enough at all. When I visited Ekaterinburg, I was saying exactly the same. Good example: Governor of Sverdlovsk region went to India and established personal relationship with Maharashtra Chief Minister. Now the Minister will visit INNPOROM. This is how business is conducted in the modern world.
Speaking about the partnership with INNOPROM, the Ambassador explained, that India is interested in collaboration with Russia in the fields of engineering, mining, technology exchange and setting up contacts between MSMEs.
– Russia has been India’s partner since 1947, our independence. The challenge today is how to make these relations modern. I hope that INNOPROM will be instrumental in this. We also need more Russian media to talk and write about India, – said Mr. Pankaj Saran. – Many Russians know India only because of Goa tourism. But we need to show them a different India.
Tanks and transport corridor
Indian Ambassador is satisfied with cooperation with Uralvagonzavod. India is already manufacturing tanks T-90, T-72 and Sukhoi helicopters, the cooperation in military field is already amounting to billions of USD.
– We want to move further from relations of “buyer-seller” to production, – emphasized the Ambassador and gave the example of joint products – PJ-10 BrahMos cruise missile which is already being installed on naval ships in India and being sold to other countries.
Indians are satisfied with military equipment manufactured with the support from Russia, and want to increase the number of plants assembling Russian machines in India.
Each country can benefit from contacts in the field of agriculture. India is ready to grow cereals and pulses in Russia as well as supply meat and cultured milk foods into our country. The Ambassador thinks that currently the main problem is the absence of a direct link between India and Russia.
–There is a proposal to build an international transport corridor “North-South” that will connect Russia to India, passing through Iran, Caspian sea, Astrakhan and further to the North. Last year this corridor was tested and by the end of this year we intend to have a meeting to speed up this project in which Russia, Iran, Azerbaijan and India are participating.
The first destination for the delegation of Russian journalists was the capital – Delhi. We visited offices of main government organizations responsible for development of technologies and promotion of Indian brands, exports and imports.
Cooperation between business is important
Mr Bhaskar Sarkar, Executive Director of EEPC India (Engineering Exports promotion Council of India, a premier trade and investment promotion organization in India), started the meeting with some history:
– In 1947 we started thinking how to export goods and services from India. USSR was the closest ally of India as a socialist country. Medium and small industrial sectors started growing because we needed components for large industries. In 1955 EEPC was founded. Its main objective is to promote medium and small enterprises around the world.
According to Mr. Sarkar, in 1955 EEPC had only 40 members, now it has 13,000 members. 22% of total Indian exports consist of engineering products and technologies (in which MSMEs contribute up to 35%). Annual volume of trade amounts to 70 bln USD. Main consumer of products and services from India is USA.
– Earlier Russia was the main trade partner; however, the trade has gone down over the years. India wants to bring the numbers up again. This is possible only in case of cooperation between MSMEs of both countries. That is why we decided to participate in INNOPROM, – says Bhaskar Sarkar. – Large Russian companies are well known in India, however, we have a very limited knowledge of medium and small enterprises. Earlier we had a similar situation with Japan, but 3 years ago we sent a large delegation to this country and set up ties between businesses.
Russian companies participating in INNOPROM-2016 also need more information about the partner country. There will be plenty of opportunities to establish contacts: out of 100 Indian companies that are ready to exhibit in Ekaterinburg-EXPO, 80% are MSMEs. According to experts, Indians are interested in attracting Russian technologies, setting up Russian production units in their country, which will be economically beneficial due to availability of raw materials locally and cheap labor. India also has a lot to offer in the field of finished products: agricultural tractors, oil and gas equipment etc.
“Our goal is to promote India”
In New Delhi we also got to know about India Brand Equity Foundation (IBEF), a government of India organization that works on promotion of Indian brands in the three key sectors: engineering, pharmaceuticals and agriculture.
– We do not give preference to any individual company, our goal is to promote India. We are interested in investments from Russia, export of our products, – explains Mr. Pawan Chhabra, a representative of the company, and reminded us that under the bilateral agreement between the two countries, the plan is to achieve a 30 bln USD bilateral trade turnover by 2025 (currently, the turnover is 7.8 bln USD). According to him, India would also like to use the Russian and European exchange of sanctions to their advantage and occupy some niche position in the Russian agricultural market. In addition, India can supply cheap pharmaceuticals to the Russian market.
– India is one of the largest producers of vaccines and can produce a large number of generic drugs, – explains the expert. – For example, USA produces HIV vaccine for 1,000 USD, and the Indian company has developed a generic drug for 2 USD.
Hundred kilometers under the ground
One of the fastest growing and high-tech infrastructure projects in India is the metro. Russian journalists went underground in Delhi. This metro is so unlike what we see in Moscow, Ekaterinburg and other cities in Russia, where almost every station is a separate art-project. But the construction is happening at a very high pace: 213 kilometers are already operational and by the first quarter of 2017, 140 kilometers more will become operational.
Mr Anuj Dayal, Executive Director – Corporate Communication DMRC, told us that the metro construction is happening on the basis of government and private partnership: fifty percent of funding is managed by the federal government; the other fifty percent are business investments. Interestingly, the largest investor into Delhi metro is Japan.
At the moment 220 trains are operating on all lines of Delhi metro. Their daily ridership is about 2.7 million passengers, during holidays this number goes up to 3.5 million. The cost of ticket starts from 8 rupees; it is the cheapest metro in the world.
Metro is adapted for people with disabilities and not only technically – they have special people who help disabled people. While constructing metro, Delhi infrastructure had to be considered – some parts of the metro are made aboveground. This metro is a leading metro in term of usage of green technologies as per UN directives. When trains stop, less energy is consumed with minimum emissions, roof of metro stations are equipped with solar panels. Commissioning of metro allowed to drastically reduce the number of cars on the roads and reducing pollution. This topic is very relevant for Ekaterinburg, isn’t it?
After visiting Moscow metro Indians want to bring their metro to the numbers of the Moscow metro. They plan to reduce intervals between trains from 3 minutes to 90 seconds and to increase the ridership. Mr. Anuj Dayal has mentioned that as of now not many Russian companies are discussing the possibilities of cooperation in the field of metro construction in India. Perhaps this will change soon.
Ekaterinburg sells Indian machines
Our next destination was Bangalore, the capital of Karnataka. Here we were introduced to the work of Ace Micromatic Group, the largest producer of metal-cutting machines and tools, with offices around the world. Mr. Srinivas Shurgurkar, the Executive Director of the company, told us that his company produces one third of all Indian machines.
We export to Germany, France, USA and the Middle East. About 10% of our turnover is from exports. The quality of our machines is comparable to products that are made in Japan and South Korea. 33,000 of or machines are installed around the world. Annually we produce 4,000 machines, – says Mr. Shirgurkar. – By 2020 we plan to increase our production capacity to 10,000 machines per annum. These are mainly CNC machines. We sell our machines to Russia for about 8 years, about 100 of our machines are already installed in your country.
Recently, the company partnered with Russian distributors to start assembling their machines in Perm, Russia. Some of these machines will be presented at INNOPROM-2016. Ace Micromatic Group is interested in further development of this line and to assemble their machines in Russia. Interestingly, the main marketing office of their partner is located in Ekaterinburg.
One more flight and we arrived to Pune, located near Mumbai, which is the capital of Maharashtra. Here we met with the pioneers of heavy engineering in India – Walchandnagar Group.
– Our company was founded 108 years ago, – says Mr. Gopi Kumar Pillai, Managing Director and CEO. – We started as suppliers of equipment for sugar and cement plants, and now we work in such strategic fields as defense, nuclear, aerospace. We have top-of-the-line manufacturing facilities and emphasize on quality.
The top manager has expressed his confidence that ties between India and Russia will strengthen and told an interesting story that goes back to 2010. At that time his company signed an agreement with Atomenergomash, part of Rosatom, for the production of nuclear equipment in India. It was decided to build new production plant on the sea shore in order to make transportation of heavy equipment easier.
– Unfortunately, Fukushima accident happened and nuclear production slowed down around the world. That is why our joint venture did not get further development, – says representative from Walchandnagar Group. – But now nuclear production is expected to be renewed. We want to produce major part of Russian nuclear equipment in India. In May we signed an MoU with the foreign branch of Rosatom.
The company is also in discussion with Rosoboronexport about signing of MoU. We will be happy to sign it, says Mr. Pillai, but there are other Indian companies that trying to set up these ties too.
Representatives of Walchandnagar Group will visit Ekaterinburg for the first time.
– India is a partner country of INNOPROM. We want to get new technological partnerships in the fields of defense and aerospace. Our company intends to move to a higher level in missile production, the possibility of joint production of submarines is also being considered.
Silicon valley Indian way
In Pune we also visited industrial park of Maharashtra Industrial Development Corporation, MIDC.
– India is a centre of information technology. There are offices of all leading companies of the world that work in the IT field, – says Mr. Vikram Kumar, the CEO of the corporation. – We build industrial parks for different industries: ship-building, automotive industry, textiles, jewelry and even wine-making. About 60,000 industrial enterprises have already become residents of our parks. Maharashtra is the leading industrial state in India, contributing almost 15% of country’s GDP. Our state attracts 50% of foreign investments.
According to Mr. Kumar, MIDC is a government organization which gives it many advantages. There are no problems with land acquisition, electricity, power supply, roads. New partners are getting interesting privileges.
After opening of company’s facility, MIDC does not take any taxes from them for 20 years. No fees for registration and no electricity charges. If the company wants roads to be constructed or water supply to be provided – all this will be done.
– We want you to tell about us in Russia so that your companies start coming to our state, invest in it, open here their offices, – says Mr.Kumar. – Russia is an old friend of India and we will be happy to see you here.
Most certainly Russian partners will accept the invitation for cooperation from India. Today, the goal to increase trade turnover between the two countries to 30 bln USD might seem unrealistic. But as already noted by Mr. Pankaj Saran, main thing is to establish contacts. Water never flows under settled stones. That is why both countries should use the opportunities that provide INNPOROM-2016 to the maximum and not stay back and relax. At the moment, it is evident that old partners are not satisfied with the current numbers and are interested in more active cooperation.