India keen on long-term energy supplies from Russia

India is seeking to ensure long-term supplies of Russian energy, India's ambassador to Russia Sreenivasan Raghavan said yesterday.

In an interview Russian news agency Sputnik, Raghavan said India's State Trading Corporation (STC) is interested in long-term energy deals with one of the world's biggest energy exporters.

The state-owned STC, established in 1956, is an international trading house, which facilitates bulk import of essential goods to the country including hydrocarbons as well as export of Indian commodities and products.

"The State Trading Corporation had expressed interest in long-term contracts for crude oil sourcing from Russian companies. We understand that direct contact has been established between the STC and major Russian oil and gas companies, who are now negotiating the terms and conditions of such contracts," Raghavan said.

The companies are actively exploring cooperation in a broad spectrum of areas covering upstream, mid-stream and downstream projects.

Raghavan expressed hope that negotiations will soon be followed by "concrete results."

Last month, India's diversified conglomerate Essar Group, signed a deal with Russian oil giant Rosneft OAO, under which the Russian company will acquire a 49-per cent stake in the country's second-biggest oil refinery of Essar Oil Ltd.

The deal envisages supply of 100 million tonnes of crude oil to Essar's Vadinar refinery in Gujarat over a period of 10 years.  (See: Russia's Rosneft to buy 49-per cent stake in Essar oil refinery).

India is in advanced talks with Russia-led Eurasian Economic Union (EEU) to conclude a free trade pact to boost trade ties with the countries of the region.

An agreement may be reached soon, as both sides seek an early conclusion of negotiations, Raghavan said.

EEU was launched on the Russian initiative in January which focuses on ensuring supplies to Russia as the country was hit with a series of western sanctions over its involvement in the Ukraine.

Targeted members include Eastern European and Central Asian countries. Besides Russia, Belarus, Kazakhstan and Armenia are members of the EEU, while Kyrgyzstan, Tajikistan, Turkey and China are also potential members.

"It is too early at this stage to say when a Free Trade Agreement (FTA) can be expected, but I believe both sides are keen for an early conclusion," the ambassador said.

He added that the establishment of a free trade zone would contribute to closer engagement between the sides, being mutually beneficial and engineering a "quantum jump in our economic cooperation."

Raghavan also said that the Indian prime minister Narendra Modi is likely to visit Russia later this year for a summit-level meeting with Russian leaders, although the actual date of the visit is yet to be decided.

Prior to the high-level talks a series of negotiations will be held including establishment of a joint Indo-Russian government commission for trade, economic and defence cooperation.

Moscow and Delhi are moving closer towards the creation of a joint venture for the production of Ka226 Russian helicopters in India and a road map of the project is expected to be ready before the summit.

''Process of creation of the joint venture is not yet complete, but we are close to that. A detailed business plan is being reviewed now. Russia's Rostech, the holding company of Russian Helicopters, already has found an Indian partner, and the formation of the joint venture is the next step,'' the ambassador said.

This will be the first Russo-Indian project under prime minister Modi's ''Make in India'' initiative, he noted.

Raghavan also said that India is interested in the Sukhoi Superjet project, but discussions on that will take time, as it will be a commercial aircraft project and finding a suitable Indian partner with the required technical and financial capabilities will be a complex issue.