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In an exclusive interview with Pravin Prashant, Executive Editor of Indian Chemical News, Manish Kumar, Vice Chairman of the Moscow Chamber of Commerce and Industry, Indian Commission and President of Soltex Group, shared his views on the trade imbalance between India and Russia, deepening cooperation, the memorandum of understanding on fertilizers, untapped opportunities, hydrogen, ports and shipping, and skilled labor.
India and Russia have set a goal to increase annual bilateral trade to 100 billion US dollars by 2030. Given the existing imbalance, India’s imports from Russia amount to 63.8 billion US dollars, while exports amount to 4.9 billion US dollars. How realistic is this goal and how can we achieve it?
We used to wonder whether we could ever reach a trade turnover of 20 or 30 billion dollars, but the geopolitical landscape has changed rapidly. Today the goal has shifted to 100 billion dollars. However, the real problem is the trade imbalance, since India exports only about 5 billion US dollars to Russia. To realistically approach 100 billion US dollars, the Indian business community must take an active stance and actively explore new opportunities.
The recent visit of President Vladimir Putin along with nine ministers demonstrates Russia’s great interest in engaging with the Indian economy. Now it is India’s turn. Our businesses must decide whether they want to continue hesitating because of sanctions or actively cooperate with Russia. Without the participation of Indian industry, this goal cannot be achieved. Increasing imports of crude oil alone will not solve the problem. India must expand its exports of organic chemicals, specialty chemicals, technical textiles, food products, semi-finished goods and much more. Services and skilled labor should also be considered. If Indian companies take all these areas seriously, achieving the 100 billion dollar target will become possible.
Given the US sanctions against Russia, how do you assess the current situation in India?
There is information circulating that the US has currently softened some aspects of the sanctions; this is today’s news. Ultimately, it depends on political will, and our leadership has made it clear that India’s national interests come first. With a population of 1.5 billion people, energy security is crucial for us. We understand the geopolitical dynamics, but India cannot be singled out. If Europe buys more oil, and the US itself indirectly supplies Russian oil, why should pressure be exerted on India? It seems discriminatory that barriers are being created preventing India from doing business, especially in the oil, gas and petrochemical sectors. As I explained earlier, there are many opportunities in this sector, and I do not think India should reduce oil imports from Russia.
But besides oil, there are many other industries, such as the production of lubricants, base oils and other products, in which Indian companies can cooperate with Russia. What is needed is to strengthen ties between the governments of the two countries and industry bodies to simplify processes on both sides. At the moment, no one can complain about a lack of finance or logistics; the real problem is communication.
A common question arises: why did it take India and Russia so long to expand their economic relations, given the long-standing friendship between the two countries?
India and Russia have long been close friends, but cooperation has still mainly been in the defense and nuclear sectors. As for business, despite ideological closeness, Indian companies have adapted poorly to Russian business norms and work culture. That is why Indian companies have lagged behind, despite the fact that American and European companies, large and medium-sized, successfully did business in Russia. To succeed, we must understand their culture, their systems and adapt accordingly.
What benefits can the Indian chemical community derive from closer cooperation with Russia?
The chemical industry must recognize that Russia is extremely rich in petrochemical resources such as crude oil, natural gas, ethylene and other key raw materials. There are many intermediate products and molecules on which Indian companies can cooperate with Russian manufacturers. So far, the main example is the joint venture between Reliance and SIBUR for the production of elastomers. But there are opportunities for much more cooperation. Russia can supply raw materials to Indian refineries and polymer producers for the production of products such as hexane derivatives, phenol, maleic anhydride, methyl acrylate, glycerin, butanol, methyl ethyl ketone and many others. They can be purchased at competitive prices, especially given that Russia’s influence on European markets has decreased.
Indian companies can consider implementing projects in Russia, creating joint ventures or sourcing primary raw materials to create added value in India with subsequent re-export to world markets. Even in pharmaceuticals, Russia can supply some medicines in bulk, for example, hydroxymethyl compounds HSN. There are many opportunities for cooperation.
What prevents Indian companies operating in the chemical, pharmaceutical or petrochemical industries from actively cooperating with Russian companies?
The main problem is the lack of accurate information. Western media have created false perceptions, especially about Russian systems, stability, logistics and finance. But the reality is different. Everything is functioning smoothly. After the recent visit, it has become even clearer: three or four large Russian banks already operate in India, providing direct trade in rupees and rubles. There is no dependence on SWIFT or the US dollar here. Logistics work efficiently; shipments from Indian ports to western Russian ports take about 20 days. Regular flights operate between St. Petersburg/Vladivostok and Indian ports such as Nhava Sheva and Mundra.
Insurance and comprehensive logistics services are provided. There are no technical obstacles related to finance or transport. The real question is whether Indian companies are ready to cooperate or whether they are worrying in vain about sanctions. The fact is that China does business with Russia. Turkey does business with Russia. Many others do too. So why not India?
In accordance with the recent memorandum of understanding on creating joint ventures in the fertilizer sector, what commitments and timelines have been set for Indian companies to create fertilizer production facilities in Russia to ensure long-term supplies to India?
The recent memorandum of understanding and joint declaration clearly indicate that the largest Russian companies are ready to cooperate with Indian firms. This means that projects will certainly be implemented, but the creation of fertilizer production units requires detailed assessment and preparatory work. In practice, the implementation of these projects may take from one to two years.
In addition to this memorandum of understanding, several Russian regions have also approached us with proposals to attract Indian investors to existing fertilizer plants, especially because they prefer Indian partners to Chinese investors. They want Indian companies to invest, modernize assets and conclude long-term purchase agreements. India is heavily dependent on imports of fertilizers such as NPK, urea and other nutrients. This opens up significant opportunities, and if any Indian company shows interest, we can connect it with the relevant authorities and stakeholders in Russia.
Regarding clean fuel, how can India and Russia cooperate in the use of hydrogen, which is currently one of the most in-demand industries?
The world is clearly moving towards clean technologies, and reducing carbon dioxide emissions is a global priority. Green hydrogen is one of the main areas of activity. Russia has strong technological know-how in the field of clean hydrogen, and there are many areas where its experience can help India accelerate progress. Through cooperation, both countries can reduce research and development cycles and accelerate implementation. This is quite logical.
How can the Indian port and shipping sector leverage the memorandum of understanding signed between the Ministry of Ports, Shipping and Waterways of India and the Maritime Board of the Russian Federation?
Russia has a developed shipbuilding ecosystem in several regions. India has numerous shipbuilding units and many years of experience; India itself previously purchased ships from Russia. They possess valuable knowledge and technologies that can support India’s efforts to expand port infrastructure and strengthen shipbuilding. The government’s focus on developing more ports aligns well with Russia’s experience. Thanks to the signed Memorandum of Understanding, Russian companies are ready to share their knowledge base, creating a win-win situation for both countries.
How do you assess the cooperation agreement between the University of Mumbai, Lomonosov Moscow State University and the Russian Direct Investment Fund (RDIF)? How will this help both countries?
RDIF is one of the largest sovereign funds in Russia and played a key role in investments in the Sputnik vaccine. They are well funded, have strong fundamentals and are interested in cooperating with Indian companies. Lomonosov Moscow State University possesses a huge base of scientific knowledge, many years of research, innovations and patents for carbon fibers, molecules, technical textiles and much more. Such cooperation at the institutional level is extremely useful. However, I believe that one such partnership is not enough. We need to expand cooperation in the petrochemical, defense, composite, metallurgical and other industries.
And finally, Russia is experiencing a labor shortage. How can India help in seizing these opportunities?
India has strong potential in services and training of skilled labor. Thanks to initiatives such as Skill India, the talent pool is growing. During the summit, Russia relaxed a number of migration norms. Previously, labor migrants were required to know the Russian language and history, which was unrealistic for short-term contracts. Currently, these norms have been relaxed for Indian citizens. The quota system has also been expanded, and more announcements are expected.
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