March 12, 2010 / 9:04 AM / 10 years ago

UPDATE 3-Russia to build up to 16 nuclear reactors in India

* Putin promises to expand banking cooperation

* Putin pledges aid for Sistema Indian unit

* Indian, Russian interests “almost fully coincide” (Recasts, adds quotes, details)

By Gleb Bryanski

NEW DELHI, March 12 (Reuters) - Russia will build up to 16 nuclear reactors for power stations in India, Russia’s deputy premier said on Friday during a visit to India with Prime Minister Vladimir Putin to reaffirm decades-old ties.

Russia is competing with French and American firms for lucrative contracts to build nuclear power plants for energy-hungry India because Asia’s third-largest economy needs to boost its supply to help sustain rapid economic growth.

“The agreement sees construction of up to sixteen nuclear reactors in three locations,” Deputy Prime Minister Sergei Ivanov told reporters.

Putin pledged on Friday to boost banking and technology cooperation with India, seeking to bolster ties with a Cold War ally that has been shifting focus towards the United States.

Russia wants to boost trade with India to $20 billion by 2015 from the current $8 billion. Together with China and Brazil, Russia and India make up the so-called BRIC group of major emerging economies, whose global influence is rising. (For a Q+A on India-Russia relations, click on [IDn:SGE627069])

The two nations also seek a greater role in stabilising the region because both share security interests emanating from Islamist militant violence and the war in Afghanistan.

“India is our strategic partner ... which is an evidence that our geopolitical interests almost fully coincide,” Putin told a conference with businessmen in the Indian capital New Delhi.

Setting the tone for his one-day visit mainly aimed at keeping one of the world’s biggest arms importers interested in Russian weapons, Putin offered state financial aid for the Indian telecoms unit of Russian conglomerate Sistema (SSAq.L).

Sistema, controlled by billionaire Vladimir Yevtushenkov, is looking to deepen its investment in Sistema Shyam TeleServices, a joint venture with India’s Shyam group.

“We are ready to contribute funds for your joint activity,” Putin said in response to a question by a Shyam group official.

Yevtushenkov later said the Russian government would become a shareholder in Shyam.

Putin also vowed to remove hurdles in the banking sector that he said were hampering mutual trade, and signalled that the government was ready to encourage joint ventures and acquisitions in the sector.


India struck a landmark civilian nuclear deal with the United States in 2008, ending the isolation it had experienced since an atomic test in 1974 and giving it access to U.S. technology and fuel, while also opening up the global nuclear market to India.

As India begins to lean more on the United States, Moscow fears losing not only influence over New Delhi but the bulk of its $100 billion defence market as well.

Putin’s visit is likely to produce deals worth more than $10 billion mainly in defence contracts, nuclear reactors and trade.

Ivanov also said Russia would deliver the refurbished Gorshkov aircraft carrier to India by the end of 2012, an issue which has troubled relations between the two powers. [ID:nSGE62B0II]

Russia and India signed a contract worth $1.5 billion on Friday for Moscow to supply 29 MiG 29 K fighters, the CEO of Russian plane maker Sukhoi, Mikhail Pogosyan, said.

Pogosyan also said he expected a joint venture with the state-run Indian company Hindustan Aeronautics Limited to manufacture around 200 fifth-generation fighter jets.

Fifth-generation jets, such as the U.S. F-22 Raptor stealth fighters which first flew in 1997, are invisible to radar and boast “intelligent” on-board flight and arms control systems and supersonic cruising speeds.

Putin sought to assure Indian businessmen that Russian nuclear reactors were safe. Russia has almost completed equipment delivery for two reactors at Kudankulam nuclear power station and is in talks to build two more reactors.

“Our reactors can sustain a crash of a medium-range passenger plane,” Putin said, seeking to demonstrate that Russian plants could withstand even Sept.11, 2001-style attacks.

The two countries also agreed to strengthen cooperation in hydrocarbons through greater collaboration between oil and gas companies, but did not announce any firm energy deals.

Editing by Matthias Williams and Paul Tait

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