President Vladimir Putin arrived for the eighth two-day BRICS Summit in Goa today.
In a first, Moscow has agreed to pump in $500 million into the Indian infrastructure space, along with an equal investment by the newly formed National Infrastructure Investment Fund (NIIF), to form a $1 billion 'Russian Indian Investment Fund'.
The Russian Direct Investment Fund (RDIF) will invest $500 million into the joint fund, which will support "attractive investment opportunities and growth of Russian business activity in India," RDIF chief executive Kirill Dmitriev said.
"The money will be invested in infrastructure projects with Russian component. We will look at energy, petrochemicals, transport infrastructure and different projects where our companies can also have a foot in India," he told Press Trust of India over phone.
An agreement to start the fund, the first of its kind partnership for the newly-formed NIIF, will be signed before Prime Minister Narendra Modi and President Vladimir Putin on the sidelines of the eighth two-day BRICS Summit beginning today, he said.
Mr Dmitriev said the actual money flow from the arrangement will be much higher as Russian businesses tend to invest a lot more when the RDIF signs agreements like these with any other country or institution.
"There would be more money from Russian banks, Russian companies and other partners of the RDIF," he explained and pegged the actual investment from Russia, including those by companies, can go up to $8 billion through an arrangement like this.
Interestingly, at a time when India is actively considering to start projects connecting Iran with Central Asia, Mr Dmitriev said the RDIF is also open to investing in other countries beyond India.
"Though most of the investments will be in India, some can also be outside of India. It can be in other countries as well," Mr Dmitriev said.
The RDIF was started in 2011 to make equity co-investments alongside reputable international financial and strategic investors, while the NIIF was floated by the government last year keeping in mind the needs to put up infrastructure.
Having a corpus of Rs 40,000 crore, the NIIF is a vehicle to attract equity investments from domestic and international sources, and the government plans to contribute 49 per cent to the corpus.
It will invest into the infrastructure sector in commercially viable projects, both greenfield and brownfield, including stalled projects.