SBI, Russian wealth fund ink pact to set up $2-billion investment consortium

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Strengthening ties: Prime Minister Manmohan Singh with Russian President Vladimir Putin prior to a meeting in New Delhi on Monday.
PTI Strengthening ties: Prime Minister Manmohan Singh with Russian President Vladimir Putin prior to a meeting in New Delhi on Monday.

State Bank of India and the $10-billion Russian sovereign wealth fund, RDIF, on Monday signed a memorandum of understanding to set up a $2-billion consortium to promote direct investment.

The pact was among the 10 deals, including defence, that were signed at the 13th annual India-Russia summit here.

In a joint statement, Prime Minister Manmohan Singh and the visiting Russian President Vladimir Putin reviewed the progress made in key areas of co-operation including energy, trade, high technology and military-technical co-operation and noted that they shared common views on all the important issues of regional and international co-operation.

Singh and Putin also expressed satisfaction at the substantial rise in bilateral trade and agreed to enhance efforts to achieve the target of $20 billion by 2015.

India also welcomed Russia’s recent accession to the World Trade Organisation. Both leaders called for the Russia-India Chief Executive Officers Council’s meeting at the earliest.

“Our bilateral trade has grown by over 30 per cent this year. There is still untapped potential in areas such as pharmaceuticals, fertilisers, mining, steel, information technology, civil aviation, telecommunications, infrastructure, food processing, innovation and services, which we will work to exploit,” Singh said at the summit meeting.

Sistema issue raised

Sources said the Russian side also raised concern over the issue of Sistema, but did not give out details.

Sistema, with investment of $3.1 billion, has 56.68 per cent stake in Shyam Sistema Teleservices, whose 21, out of 22, licences were cancelled by the Supreme Court on February 2, as irregularities were found in their allocation.

The Russian Government, which has a stake of 17.14 per cent in the company, has been expressing concern and asking India to ensure protection of Sistema’s investment.

(This article was published on December 24, 2012)
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