The Hindu Business Line : Russia to plough back India's debt payments as investment

INDIA and Russia have reached an agreement under which India will reimburse its $1-billion debt to Moscow, which will then invest the funds into the Indian economy, a Russian Government statement quoting the Economy Minister, Mr German Gref, in Moscow said on Wednesday.

"The accord will be initialled very soon," Mr Gref said on his return to Moscow from his three-day India visit, where he held talks with the Prime Minister, Dr Manmohan Singh, and other Indian leaders.

Mr Gref said Russia hoped the deal would be signed before the Russian Prime Minister, Mr Mikhail Fradkov, visits India in March.

He said India was expected to repay the debt without a discount, on the condition that Russia returns the money in the form of investment into the Indian economy, the statement said. He said the money would be distributed among State-owned and private companies interested in working in India.

The Russian Government and companies to be involved in the project are expected to sign agreements, with the former acting as a guarantor of the investment, according to the Minister.

Mr Gref said Russian companies working in the energy sector might be interested in the scheme.

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