In that matter, INNOPROM (Joint India-Russia business exposition), scheduled to be held in New Delhi from September 9 to 11, will be an opportunity to harness the region’s potential. 

In the context of India’s Act Far East Policy, a strategic initiative launched by Prime Minister Narendra Modi in September 2019 at the 5th Eastern Economic Forum in Vladivostok, the stakes are high to deepen economic, trade, and diplomatic ties with the resource-rich Russian Far East. Modi had announced a US$ 1 Billion line of Credit for projects in the Russian Far East Region. 

Beyond China

Moscow is keen on reducing its dependence on China. And the Indian economy requires resources for the next stage of industrialisation. This creates the moment for both to strengthen economic cooperation. 

The region holds an immense concentration of Russia's natural wealth, accounting for major shares of the country's diamonds, precious metals, fossil fuels, and aquatic resources. The macro-region extracts 98% of Russia's diamonds, 80% of tin resources, 90% of borax materials, 50% of gold, 14% of tungsten, and 40% of fish and seafood. About one-third of the country’s coal reserves and hydro-engineering resources are found in this region. Further, the region’s forest area comprises about 30% of the total forest area of Russia.

Over the past few years, the Far East has been a dynamically developing part of the Russian Federation. Unique mechanisms such as Advanced Special Economic Zones are being used to create a favourable investment climate. 

The just-concluded Eastern Economic Forum (11th edition), also attended by Indian experts, highlighted the region's immense opportunities. Addressing the Forum, Russian President Vladimir Putin outlined a renewed 10-year development plan for the Russian Far East extending to 2036, emphasising high-tech industries, infrastructure, and resource processing. Putin launched several facilities involving natural resources in the region.  

India’s Opportunity

While India has invested in the energy sector in the Russian Far East, Indian mining and industrial giants are yet to harness the potential of the region where China’s presence has been increasing. The region offers various markets for Indian businesses. 

Agriculture and food processing require high-quality food products and modern farming technologies. The pharmaceuticals market has openings for affordable generics and medical equipment. The technology and IT sectors are primed for software development and digital solutions suited to the region. Shipbuilding, mining, and tourism present further opportunities for doing business. 

Russia has offered India access to the Tomtor rare earth metals deposit in the Republic of Sakha (Yakutia), with discussions involving Rosneft and Indian state-owned firm IREL to build alternative supply chains.

The Russian government is providing incentives to draw foreign investors to the Far East. Tax breaks include lower corporate tax rates and exemptions for new businesses in key sectors. Special Economic Zones, such as the Vladivostok Free Port, benefit from simpler regulations, in addition to offering infrastructure support. Subsidies are available for agriculture, manufacturing, and renewable energy projects. 

Why Chennai Vladivostok Corridor Matters

Indian industries keen on establishing a presence in the Russian Far East must turn to the Chennai Vladivostok Corridor, or the Eastern Maritime Corridor, which is free from conflicts and tensions. 

Over the past few years, container ships carrying crude oil, metal, and textiles have started coming to Indian ports through this corridor. The corridor significantly reduces cargo transit time by up to 16 days and cuts distance by up to 40%, making it a highly efficient trade route. 

The corridor passes through key waterways, including the Sea of Japan, East China Sea, South China Sea, Malacca Straits, Andaman Sea, and the Bay of Bengal. 

The Eastern Maritime Corridor promises immense potential to unlock new trade opportunities for trade, thereby fostering mutual economic prosperity and resilience.

Northern Sea Route 

Along with this, the Northern Sea Route (NSR), or the Arctic Route, is also opening up opportunities for Indian investors. Russia’s Arctic region has huge deposits of hydrocarbons, including LNG, besides other natural resources such as nickel, copper, platinum, palladium, and rare earth elements. 

Russia wants the Northern Sea Route, which runs along Russia’s northern coastline and is the shortest shipping route between East Asia and Europe, to become a major shipping lane and has invested heavily in infrastructure there. India plans to dispatch its first pilot cargo vessel along Russia's Northern Sea Route (NSR) in 2027 to boost Arctic trade and secure direct energy supplies.

In fact, Russia’s Arctic region of Arkhangelsk is in conversation with India on leveraging the economic potential of the NSR. Located on Russia’s Arctic coast, the city of the same name sits on the Northern Dvina River and is a major cargo hub linked to the NSR.

The opportunities for India in Arkhangelsk include those from building ships for India at shipyards in the Arkhangelsk region, to port facilities to deliver cargo from India and to export cargo to India. 

Indian industries need to take full advantage of goodwill and secure opportunities.

(The writer is a commentator on geopolitics and geoeconomics. Views expressed are personal.)