Russia's Far East has presented opportunities for foreign investment since the mid-2010s, particularly from 2015 onward, with a series of preferential regimes introduced to target both domestic and foreign investors, Artyom Lukin, a professor of international politics at the Far Eastern Federal University in Vladivostok, told Sputnik India on Monday.
He revealed that there is no distinction between Russian and foreign entities in this regard — anyone investing in the economy of the Far East is
entitled to certain benefits.
Additionally, a special law on international advanced development territories is currently under discussion in the State Duma and is expected to be adopted in the coming months. This law specifically aims to attract foreign investors, welcoming them on favorable terms, he noted.
However, Russia has yet to see a significant influx of foreign investments into its Far East, Lukin highlighted.
He believes that investors base their decisions on a balance of potential profits versus risks. If the potential profits significantly outweigh the risks, they will invest. Conversely, if risks dominate, investments won't materialise. Unfortunately, it seems that, for now, perceived risks outweigh potential gains.
India has invested significantly in the region, with the
Oil and Natural Gas Corporation's (ONGC) involvement in the Sakhalin-1 project standing as the largest Indian investment in the region, the academic underlined. ONGC, which joined the project in the mid-1990s, has continued its participation despite sanctions.
"Other Indian investments in the Far East are relatively minor. For instance, a tea packaging factory was established in Vladivostok a few years ago, importing Indian tea for local packaging and distribution. There is also a small diamond-cutting workshop owned by Indian investors, but it operates more like a small-scale enterprise," Lukin emphasised.
The region is opened for foreign investment, particularly from friendly nations, including India, Lukin said. He emphaisised that Indian Consulate General in Vladivostok, which serves the entire region, offers crucial consular support to Indian businesses. The local governments, including those in Primorsky Krai and other regions, would also be eager to welcome Indian investors, whether small, medium, or large-scale.
Indian interest, like that of other countries, primarily revolves around Russian raw materials, including
timber, coking coal, and seafood, Lukin underscored. He also mentioned an attempt to establish a coal enterprise on the
Kamchatka Peninsula with Indian investments, which, however, was unsuccessful.
Lukin remarked that seafood holds great potential, as the Russian Far East is renowned for its high-quality, environmentally friendly products like
fish, crabs, and squid, which could appeal to the Indian market, currently underdeveloped in
terms of seafood consumption.
Another link between the two regions is the increasing number of Indian students coming to study in the region, the professor stressed.
The university's Indology department ensures the presence of individuals familiar with India and proficient in Hindi, he further disclosed, making the region ready for business interactions with India and facilitating smoother communication and collaboration.
Moreover, the establishment of a direct maritime corridor between
Vladivostok and Chennai is a positive development, he suggested.
While direct transportation between the Far East and India has existed to some extent — such as crude oil shipments from Sakhalin — this initiative aims to establish a regular container shipping line. Currently, containers often travel through intermediate hubs like Shanghai or Vietnam before reaching their destination, the expert observed.