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Friday, 15 July 2016 20:00

In the coming months and years we will see growing economic and commercial relations between India and Azerbaijan – Ambassador of India Sanjay Rana Featured

India was among the first countries to recognize Azerbaijan as an independent country in 1991 and establish diplomatic ties

Caspian Energy:  Your Excellency, what role does India see for itself in such geopolitically complex region as the Caspian? What are the objectives of your mission for 2016?

Sanjay Rana, Ambassador of India to Azerbaijan: India has always enjoyed good relations with the Eurasian region. India has historically friendly relations with Azerbaijan and other countries in this part of the world. Our historic linkages with this region are centuries old. Our societies have been enriched by the links of culture, cuisine and commerce between us. They form the bed rock of our modern day relationships. We accord a high priority to our relationship with this region which we see as our extended neighborhood. We have a strategic partnership with Russia. Our Prime Minister Mr. Narendra Modi had visited five countries of Central Asia last year which has given a new impetus to our relations with the region. Hon’ble Prime Minister made a historic visit to Iran in May 2016. Last month, he attended the Summit of Shanghai Cooperation Organization in Tashkent to formalize India's membership of the organization. We are keen to build strong relationships with all the countries in the region.

India has close and friendly relations with Azerbaijan. India was among the first countries to recognize it as an independent country in 1991 and establish diplomatic ties. The Government of India is committed to strengthen relations and enhance our cooperation with Azerbaijan in all areas, including political, economic, commercial, cultural and educational. India- Azerbaijan relationship has been growing stronger with every day. We have seen good growth in the bilateral trade in the last 10 years.  In the last couple of years, our trade has been affected by the global downturn in the world economy but there is a great deal of potential for enhanced economic and commercial cooperation between the two countries for mutual benefit. It is my mission as the Ambassador of India here to facilitate the efforts for realizing the potential for mutual cooperation in all areas and make the relations between India and Azerbaijan even closer and further stronger.

 

Make in India’ is a major initiative by Indian government

CE: What could you tell about the potential of the Indian economy growing at the fastest rates globally?

Sanjay Rana: As you may know,Indian economy has been making great strides and we are being seen as the engine of global growth. In spite of the global downturn, India has continued to record high growth rates of GDP between 7 to 8 %. Today, India has become the fastest growing large economy in the world. World Bank, IMF and other institutions have projected even better growth in the coming days. We are not only having a high growth rate; we are also going up in various global indicators. We are now the most preferred destination for Foreign Direct Investment (FDI). In the year of 2015, we have received highest ever FDI of more than 55 billion dollars. This has been made possible by several economic reforms that have been undertaken under the leadership of Prime Minister Mr. Narendra Modi. In last two years, major reforms have been undertaken making it easier for foreign companies to do business in India. This has made India the most open economy in the world for foreign direct investment. We have jumped 12 ranks in the latest global ranking on Ease of doing business by the World Bank.

 

CE: Do you invite Azerbaijani investors to India?

Sanjay Rana:  We woulddefinitely like to welcome the Azerbaijani companies to invest in India. As you know Azerbaijan is very strong in oil and gas sector. This is also a priority sector for India. We are the fourth largest consumers of petroleum products in the world. We also are big refinery hub; India is the second largest refiner in Asia and we export refined products to other countries. We also have substantial reserves of gas and shale gas and many industries are shifting to using gas fuel. There is ample scope for growth in India in oil and gas sector. Several international companies like BP, Cairn Energy, Shell, BG Group have invested in India. Investment opportunities are in Upstream, gas pipeline, CGD network, LNG Terminal, Petrochemical and Refinery. The National Exploration Licensing Policy provides a contract framework for the exploration and production of hydrocarbons through a competitive bidding system. It is a transparent and level playing field for Indian private and national oil companies as well as foreign investors - all enjoy the same fiscal and contract terms. Investors from Azerbaijan are welcome to come and invest, and develop oil and gas fields in India. “As Azerbaijan companies have capacity and expertise in these areas, we would like them to come and be more proactive in the oil and gas sector of India. There are many opportunities for investment in renewable or alternative energy sector also.

 

CE: Is it planned to bring Indian inventions in the field of alternative energy to Azerbaijan?

Sanjay Rana: Renewable energy or alternative energy is an important sector for India. We have been working on developing this sector in India. In India’s total installed energy capacity of around 270 GW, renewable energy sources contribute around 77 GW comes from. India has vast untapped renewable energy resources. Wind energy is the largest renewable energy source in India. The Government of India has set targets which will take the total renewable capacity to almost 175 GW by the end of 2022. National Solar Mission aims to generate 1,00,000 MW of solar power by 2022. India offers unlimited growth potential for the solar PV industry. The government has created a liberal environment for foreign investment in renewable energy projects. Foreign Direct Investment (FDI) up to 100% is permitted under the automatic route for renewable energy generation and distribution projects. This has created a positive environment among investors keen to tap into India’s potential and investors in Azerbaijan should consider this opportunity.

 

CE: For which economic areas does India attract investments?

Sanjay Rana: Yes,as I have said last year we have got Foreign Direct Investment of 55.46 bln which was highest ever. This has been made possible because the government of India has brought major policy reforms in many sectors like manufacturing, infrastructure, defense, insurance, civil aviation, tea, coffee, rubber plantations, single brand retail trading, and asset reconstruction. These reforms have made it much easier for companies to invest in India and this has opened the doors for FDI like never before. ‘Make in India’ is a major initiative by Indian government to facilitate investment, foster innovation, enhance skill development, protect intellectual property, and build best-in-class manufacturing infrastructure. Under the ‘Make in India’ campaign, there were many opportunities for foreign investors to participate in high- value industrial sectors like defense, construction, renewable energy sources and railways Infrastructure projects or even in food production manufacturing in which 100%  FDI is allowed in India. “Make in India” is a key priority in India under which we are inviting manufacturers and producers from all over the world to make products in India. They can benefit from the better conditions for manufacturing which we have in India like huge demographic dividend, large consumer market, emerging knowledge hub, availability of large technical and scientific manpower, developed financial sector and high return on capital for investments in India. There's never been a better time to make in India.

 

Indian companies are interested in investment opportunities in Azerbaijan in industrial and technological Parks

CE: In which sectors do you see presence of Indian investors in Azerbaijan?

Sanjay Rana: This is a very good question. India’s ONGC Videsh, which is our main international oil company, has invested around one billion dollars in development of Azeri–Chirag–Gunashli block of oilfields and Baku-Tbilisi-Ceyhan (BTC) pipeline by buying the shares of Hess Corporation. Our national oil companies are keen to increase their share in the oil exploration and they would be happy to look at the opportunities for the investment in oil sector and petrochemical industry in Azerbaijan. Indian companies are also keen to make use of opportunities in non-oil sectors, like agriculture, which is being given a lot of support by the Government of Azerbaijan. We have seen active steps being taken by the Government of Azerbaijan aimed at developing the non-oil sector and we would be happy to partner Azerbaijan in these efforts. Indian companies are making world class agricultural implements and equipment which are supplied to various European countries. These products are high quality, reliable and good value for money and we would like to supply these products to the agricultural sector of Azerbaijan. Similarly Indian companies are very strong in pharmaceuticals and information technology. They would probably be interested in setting up their industries here, particularly in the industrial and technological Parks being set up here. We would like the Indian pharmaceutical companies to come here and look at the opportunities for business, including joint ventures with Azerbaijani companies and possibilities of setting up manufacturing or packing units for pharmaceuticals.

 

CE: Are there any concrete projects in these areas?

Sanjay Rana: As the first step, Indian companies are applying for registration of their pharmaceutical products in Azerbaijan. Once their products are registered and approved, they would be able to look at various business models whether it will be better to manufacture here or to manufacture in India and package here etc. The availability of Indian pharmaceutical products in Azerbaijan will be a win- win situation for all because Indian companies will get new markets and the customers in Azerbaijan will get high quality medicines at affordable prices.

 

The main way for India to trade with Azerbaijan will be the new North-South transport corridor

CE: Mr. Ambassador, what role will India play in the global transport corridor projects?

Sanjay Rana:  As I said earlier, we see the Caucasian region as our extended neighborhood and we would like to have closer economic engagement with this region. We are very keen to have closer economic relations with Azerbaijan. In the near future, the main way for India to trade with Azerbaijan will be the new transport corridor called International North-South Transport Corridor which is being developed to connect the ports of Mumbai to the Iranian ports of Bandar Abbas and Chabahar. And these ports in Iran will connect by road, by rail to Baku and then to Russia and other countries in northern Europe. Other routes through Caspian Sea are also being developed. India gives high priority to development of  International North-South Transport Corridor because it would cut the time taken by Indians goods to reach Azerbaijan and Russia  by halve and also reduce the freight cost by half.  As you know Azerbaijan and Iran have already started work on constructing a bridge in Astara to connect the railway line of two countries. There are already road connections between Azerbaijan and Iran and the railway companies of three countries Iran, Azerbaijan and Georgia have signed an agreement to facilitate movement of goods from Iran to Azerbaijan and Georgia. We hope that this Corridor would soon start functioning.

 

CE: Are there possibilities of making investments by India in extension of capacities of Chabahar port in the Gulf of Oman?

Sanjay Rana: India has been working with Iran to develop the Chabahar port because we are developing our business and trade with Iran as well as develop the International North-South Transport Corridor. The Chabahar port is being developed as a modern port with all facilities and it is expected to lead to significant investments by Indian companies in facilities there.

 

TAPI could transform regional economic cooperation

CE: What do you think about the TAPI project intended for transportation of Turkmen gas to India? How feasible is it to use this route for export of Caspian gas to the liquid market of India?

Sanjay Rana: India is a big consumer of energy and we import most of our oil and gas requirement. We are keen to get assured oil and gas supplies from reliable sources abroad to maintain our energy security. We have welcomed Turkmenistan’s initiative to build the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project. This could transform regional economic cooperation and bring prosperity along the route. When our Hon’ble Prime Minister visited Turkmenistan, he welcomed the agreements between the four countries for the pipeline and underlined the need to implement the project quickly.  He also proposed that multiple options should be explored, including the additional possibility of land-sea route through Iran. India is one of the four countries involved in the project. I am not aware of the details but I am sure whatever obligations India has agreed to in the negotiations between the different partners, we will be fulfilling our part.

 

CE: Do you plan to invite Azerbaijan to this project?

Sanjay Rana: I do not have many details of this project. Azerbaijan is a major player in oil and gas sector in the Caspian region. I am sure if Azerbaijan indicates its interest to various parties involved in the project, its interest will be favorably considered.

 

CE: How do you assess the situation with energy security of India?

Sanjay Rana: India is the fastest growing large economy in the world and requires assured and reliable supply of energy. We import most of our oil requirement so energy security is an important issue for India. We have been able to ensure our energy security successfully by developing healthy partnerships with energy producers as well as investing in energy assets abroad.  For instance, Indian companies buy significant amount of oil from Azerbaijan’s Baku-Tbilisi-Ceyhan pipeline; Indian companies are also investors in the Azerbaijani oil fields. We hope to enhance our energy security in the future by developing our partnerships even further and by increasing India’s investment in oil and gas assets abroad.

 

CE: How did the situation with low energy prices affect the Indian economy? How just is the statement that every $1 rise in oil prices results in additional $400 million subsidization by the Government of India?

Sanjay Rana: India is one of the biggest consumers of oil in the world. We are second largest importer of oil and gas in Asia. So, cheaper oil prices means less expenditure on oil imports. In general low oil prices are good for India and our economy. But there is also a down side that when the prices are low, the investment in the renewable energy or alternative energy sources goes down. I am not sure about the accuracy of the date mentioned by you. The government is working on rationalizing the subsidies.

 

CE: Mr. Ambassador, would like to add anything to the above mentioned?

Sanjay Rana: I would like to say that Indian companies are very keen to do business in Azerbaijan in different roles, as trading partners, joint venture partners and investors. We are very happy to see the proactive steps being taken by the Government of Azerbaijan to make it easier for foreign companies to come and to do business here. This has made Azerbaijan as an attractive business partner and investment destination. Based on feedback from Indian businessmen, I would like to say that some lingering issues like the delays and hassles involved in getting business visas are obstacles which hinder faster growth in business relations. Similarly, Indian businessmen operating in Azerbaijan feel that if they were able to get work or residency permits for longer periods, it would enable them to expand their businesses in Azerbaijan in a better and more planned way. We are also happy that pharmaceutical market in Azerbaijan is being rationalized and steps are being taken to keep the price of medicines at fair levels. We are hopeful that opening of the registration of Indian pharmaceutical products in Azerbaijan would enhance the availability of quality medicine at affordable prices. Indian companies are interested in investment opportunities in Azerbaijan in industrial and technological Parks. For instance, there is interest in setting up a plant for manufacturing Urea for export to India if assured gas supply is available.

The Government of India and Azerbaijan are working together in a proactive way to enhance the business environment.  At the Government level, we have signed agreements for cooperation in trade, investment and technical cooperation. There are MoUs between our Chambers of Commerce for cooperation which we are going to implement. We are also working on new agreements for cooperation in avoidance of double taxation and bilateral investment treaty. In the coming weeks, an official delegation headed by Ms. Sujata Mehta holding position equivalent to Deputy Foreign Minister in our Ministry of External Affairs would be visiting Azerbaijan for discussion with her counterpart on enhancing bilateral cooperation in all areas. Late in this year, we plan to hold the 4th Session of India- Azerbaijan Inter- governmental Commission. So I am positive that in the coming months and years, we will see growing economic and commercial relations between India and Azerbaijan.

I would also like to thank Caspian Energy for taking time to meet and talk to us. Bilateral relations between India and Azerbaijan in business, trade and energy are very important issues for the Embassy of India and we welcome this opportunity which you have provided to us.

 

Thank you for the interview

 Interview made by Sabina Mammadova, Emil Mammadov

 

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