India, Russia to produce titanium through JV

Moscow, Apr 16 (UNI) India and Russia have signed a deal to invest the rupee debt, to set up a joint venture to produce titanium dioxide, which is expected to change the whole procedure for clearing Indian debt.

''Russian Deputy Finance Minister Sergei Storchak and his Indian counterparts signed a breakthrough deal in Washington during the spring session of IMF and the World Bank to invest the rupee portion of India's debt to the Soviet Union into a titanium dioxide production unit,'' leading Russian business daily Kommersant reported today.

Under the agreement, signed in Washington, Indian rupee debt worth 126 million dollars to Russia will be invested in a joint titanium production unit in India, adding Russian financial authorities planned to convert the remaining amount of India's debt (estimated at one to three billion) and liabilities of other countries into similar projects.

Under the deal, the parties will build a plant with annual capacity of 40,000 tonnes of titanium dioxide within the next three years.

''Russia is to hold a 55 per cent stake in the company, 51 per cent of which will belong to the state while the remaining four per cent will belong to Saint Petersburg engineering company, Technochim-Holding,'' the paper said.

The project will finally transform the system for return of Indian debt that India estimates at one billion dollar, while Russia deems it to be three times as much, it pointed out.

The parties, however, agreed on the one billion dollar rupee portion of the debt that Russia was going to spend on investment projects in India.

In March 2006, Russian Prime Minister Mikhail Fradkov had suggested using the debt money for investment projects, an idea that President Vladimir Putin supported during his visit to India, last January.

Storchak told Kommersant the final agreement on the titanium production unit still has to be signed.

UNI