Russia, India Close on Nuclear Deal

NEW DELHI -- Russia and India on Tuesday edged closer to a multibillion-dollar nuclear deal to build four more reactors in southern India that has been delayed because of international restrictions against New Delhi.

The two countries signed a preliminary deal ahead of a visit Tuesday to New Delhi by Prime Minister Viktor Zubkov, where he was accompanied by a delegation of Russian business leaders, including top executives at state-owned bank VTB and the Sistema conglomerate.

"An agreement on building additional reactors at the Kudankulam atomic station has been initialized," Deputy Prime Minister Alexander Zhukov told reporters in New Delhi during the visit.

Zhukov said the initialization -- which means the signing of a preliminary deal -- had taken place just before Zubkov's visit.

Russia and India have been working for more than a year on a deal that will allow Russia build the reactors at the Kudankulam nuclear power plant in the southern Indian state of Tamil Nadu.

The deal cannot be finalized because of restrictions on India imposed by the 45-nation Nuclear Suppliers Group, or NSG, and the limits are unlikely to be lifted until a U.S.-India deal on civilian nuclear cooperation is ratified.

Russia is building two 1,000-megawatt reactors at Kudankulam as part of a deal signed in 1988. Russia agreed in January to build four more reactors at the site.

During Zubkov's visit on Tuesday, VTB and Sistema both opened offices in New Delhi.

VTB became Russia's first bank to open a branch in the country, opening its New Delhi branch at a ceremony attended by Zubkov and the bank's chief executive, Andrei Kostin.

"The faster economic growth presents a good business opportunity," VTB deputy chairman Vasily Titov told reporters. The bank, which last month became Russia's first bank to open a branch in China, plans to open a branch in Shanghai in two weeks, Titov said.

Services conglomerate Sistema is looking to invest in India's telecoms, real estate, microelectronics, tourism and mass media sectors, the firm's chief executive, Alexander Goncharuk, said Tuesday.

It also plans to invest $4 billion to $7 billion to expand its Indian telecoms unit Shyam Telelink and will raise its stake in the firm within two years, he told reporters at a conference.

Sistema, whose key asset is mobile phone operator Mobile TeleSystems, purchased a 51 percent stake in Shyam for $58.1 million in 2007.

It has an option to raise that to 74 percent, the maximum allowed under Indian law.

Shyam Telelink currently provides code division multiple access, or CDMA, services in the western Indian state of Rajasthan, and in January it received licenses to offer services in the remaining 21 zones of the world's fastest-growing telecoms market.

"India is a strategic market for Sistema ... Besides telecoms and real estate, the next direction is high-tech," Goncharuk said, referring to its microelectronics firm Sitronics.

The firm will bring its real estate business Sistema-Hals to India and will look at opportunities around New Delhi, Goncharuk said.

Goncharuk declined to say when Sistema would introduce to India the rest of its diversified portfolio, including Sitronics, saying the details would be announced later.

n Russia will immediately lift a ban on the import of some plant products from India, including raw tobacco, the Agriculture Ministry's plant and animal health watchdog said Tuesday, Interfax reported.

n Aeroflot and India's Kingfisher Airlines signed a memorandum of understanding on a code-sharing deal in New Delhi on Tuesday, Aeroflot said in a statement.