By Hardev Sanotra
St Petersburg, June 19 (IANS): The Russian government and the industry are looking at tie-ups with Indian and other Asian companies, according to a top industry representative.

According to Chandrajit Banerjee, director general of Confederation of Indian Industry (CII), with the US and Europe imposing sanctions on Russia because of the conflict in Ukraine, the companies at St Petersburg International Economic Forum (SPIEF 2015) have shown keen interest in doing business in India.

“I have had a lot of queries coming my way on the ‘Make in India’ plans, and Russian companies have indicated that they would be interested in manufacturing in India,” Banerjee told IANS after a few rounds of discussions with companies here.

He said the major interests shown are in the areas of energy, power and infrastructure.

Banerjee said many top business leaders told him that they are keen to set up some kind of base in some of the Indian states which have been in the forefront of inviting investments.

A Russian company is in the final stages of negotiating an engineering manufacturing venture in Haryana, he added.

Banerjee said that a large deal is being worked out in the energy sector between two leading companies from Russia and India, but he did not name them.

The Indian company would possibly be Essar, which is being represented by its joint chairmen Shashi Ruia and Prashant Ruia here.

The CII chief said details would be available once the companies are able to finalise the deal.

He said the defence sector in Russia is now keen on collaborating with Indian companies as the area is now open for private sector investments in India.

CII is leading a 30-member delegation to the SPIEF this year and it has participated in the event for the last nine years.

Banerjee said he also saw keen interest being shown by companies from Malaysia, Indonesia, South Korea and Singapore, in the absence of any major representation from Western nations. The large Indian delegation to the forum, he said, has convinced the Russians that Indian companies are interested in doing business.

He said the Russians have also shown interest in looking for financing from other sources, including India, as the Western lending possibilities appear to be drying up because of the sanctions. He said the Exim bank of India representatives have had a round of fruitful talks with the Russian companies.

According to Banerjee, in the last one year, India has been able to put behind its “policy of ad hocism” and a fundamental change in the economic architecture is being put in place.

“We are on the right track and the systems are getting in place,” he said, adding that it may take some time for all the results to show. “Not everything is a quick fix.”

He said the Indian government has taken advantage of the “benign external environment” and is putting in place the policy changes required. “One serious challenge remains though - on the interest rate front. We would have liked changes to come in bold strokes, rather than the tinkering we have seen,” Banerjee said.

He was of the opinion that although demand was improving and the investment by companies would pick up, a lower interest rate regime would have triggered major flow of money into every sector. The Reserve Bank of India, which indirectly manages the broad interest rates, has taken steps in three tranches this year, resulting in a cut of about three-fourths of a percent in a key rate.

Banerjee said that on the taxation front the government has taken a “pragmatic approach” and the era of administrative harassment seems to be coming to an end. Even on the retrospective taxation, the government is not taking steps it could have. Corruption at top level is absent but that needs to reflect at the lower level.

He said that growth is not only the responsibility of the government, the industry too needs to respond by investment, adding he was sure that it would do so.