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The country's largest trading company, the $10-billion MMTC, is eyeing a stake in the Russian diamond major Alrosa. Alrosa plans to divest 20 per cent of its equity in 2011-12, which is estimated to value around $1.5-2 billion.
The public sector MMTC has already had preliminary discussions with Alrosa's management in this regard, official sources in the Commerce and Industry Ministry told Business Line . (MMTC is under the Ministry's administrative control.)
They added that some other Indian companies may also be looking at taking a stake in Alrosa.
NOT A ONE-OFF MOVE
MMTC's interest in Alrosa is not a one-off move by India. The Government is keen that the country's public and private sector units take part in Russia's recently announced privatisation and modernisation programme. India does not want to be left out of this big opportunity, which has seen competition from US, EU and China, the sources said.
The Commerce and Industry Minister Mr Anand Sharma, – who will be in Russia from June 15-18 to attend the St Petersburg International Economic Forum and bilateral talks – is expected to convey to the Russian authorities that India's interest in Russia's privatisation programme would be a win-win partnership as it takes into account the strategic dimension of the bilateral ties.
In particular, Mr Sharma would seek the support of the Russian Government in ensuring effective participation by Indian firms including MMTC in Alrosa's disinvestment.
In return, India would encourage Russian companies to invest in India's trillion-dollar infrastructure investment opportunity coming up in the 12{+t}{+h} Five-Year Plan (2012-17).
The Russian Government had announced a major plan to privatise Government property during 2011-13. This includes the stake sale of 10 major state-owned banks and companies to raise around $34 billion over the next three years.
The companies include VTB bank, Sberbank, shipping company OAO Sovcomflot, OAO RusHydro, oil producer Rosneft, Federal Grid Co and United Grain Co.
ROUGH DIAMONDS SOURCE
Meanwhile, India is looking at Russia as a major source of rough diamonds. Mr Sharma is also expected to seek from Russia a favourable response for an agreement for long-term supply of rough diamonds from Alrosa and Gokhran to Indian PSUs such as Hindustan Diamond Co and MMTC.
India also wants Gokhran to invite MMTC and Hindustan Diamond Co to take part in their sales.
India and Russia aim to increase their bilateral trade from $4.55 billion in 2009-10 to $20 billion by 2015.
India's trade deficit with Russia was $2.7 billion in 2009-10 and $2 billion in April-December 2010. FDI from Russia to India is around $1 billion, while that from India to Russia is $4.5 billion.
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