Inaugural address of RRM at the Russia-India Defence Conference (Moscow, April 17, 2015) It is a great pleasure for me to be here with you at this conference which will discuss intensification of defence and economic cooperation between our two countries. I compliment ASSOCHAM and Sberbank on this timely initiative. Our two countries have a proud history of warm and cordial relations, based on an extraordinarily broad-based foundation of interaction over centuries, cultural affinities, intensive cooperation in multiple sectors and shared views on major global political and economic developments. The practice of Annual Summits between our two leaders has ensured the continued vibrancy of our special and privileged strategic partnership. During the landmark visit to India of the President of the Russian Federation in December last year, our two leaders reaffirmed their determination to further intensify and diversify our bilateral partnership. 1 In this endeavour, defence and economic cooperation have special significance. The joint statement issued at the Summit noted the shared belief of our two leaders that economic relations constitute a key pillar of a strong strategic partnership. Speaking at the media conference with President Putin, our Prime Minister drew attention to the fact that Russia has been India’s foremost defence partner through decades and reaffirmed that, even as India’s options have increased today, Russia will remain our most important defence partner. He also suggested to President Putin that Russia should locate manufacturing facilities in India for spares and components for Russian defence equipment. President Putin responded warmly, assuring our Prime Minister that Russia would support the establishment of a modern industrial complex in India. Our two leaders are therefore clear in their vision for the future development of our economic cooperation. It is now up to our officials and to our corporate entities to translate this vision into reality on the ground. Your discussions at this conference should make a valuable contribution to this. 2 Since coming to office in May last year, our government has initiated a number of reforms in our procedures and regulations to encourage foreign enterprises to manufacture in India, both for consumption in our country and for exports. A prime initiative was the launch of a national programme of ‘Make in India’, which is designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property, and build best-in-class manufacturing infrastructure. In the last nine months, we have liberalized the foreign direct investment policy regime in the defence sector permitting up to 49% foreign investment through the government route and providing the possibility of an even higher proportion where access to modern and state-of-the-art technology is involved. We are also committed to promoting our domestic defence industry through preferential treatment to acquisitions involving buying Indian or buying and making in India. We are actively encouraging Indian companies to partner with foreign companies in joint ventures and technology transfers. These measures open up a much wider range of opportunities for Russian manufacturers to partner with the 3 Indian public or private sector companies for joint manufacturing in India. The Russian defence industry is already very familiar with India because of our long history of defence cooperation. But many of you may still not be fully aware of the extent to which our industrial strengths and capabilities have advanced in recent years and of the enhanced quality of our human resources, which make manufacturing in India an attractive proposition. The extensive deployment of Russian platforms and equipment in our armed forces provides a natural context for India-Russia joint ventures. In the dialogue between our leaders, as well as between our Defence Ministers, we discussed the potential for establishing facilities in India for repair and maintenance of Russian defence platforms and for manufacturing subassemblies and components. We have identified defence platforms that can be manufactured or integrated in India. As many of you are already aware, these discussions cover major platforms such as Su-30 aircraft, Mi-17 helicopters, light helicopters, T-90 tanks, infantry combat vehicles, submarines and naval frigates. We are also looking for partnership with Russian original equipment manufacturers for joint ventures or co- 4 production of a number of other components for our Russian and other weapon systems. Successful implementation of these projects can take our defence cooperation to significantly higher levels and foster a more integrated defence relationship. Already, through projects like BrahMos, our defence cooperation has transcended the buyer-seller phase to one where we jointly develop and manufacture equipment for the needs of our countries as well as for exports. We are now poised to expand on this model. I believe it is important that business and industry in both governments are properly sensitized about the prospects and opportunities of collaboration in these sectors. The strong political will to intensify our defence cooperation has been clearly articulated by the leaders of our two countries. Objective economic factors also promote this direction. Our two governments will continue to extend their support, but it is essentially for industry to take up the challenge of exploiting the potential to the full. I wish your conference fruitful deliberations on these practical issues. **** 5