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Deal clinched on use of Russian rupee fund

New Delhi, Jan. 25: India has agreed to Russia using the Rs 4,500-crore rupee credit fund in joint ventures in India. On the cards are a project to develop a medium-sized transport aircraft and one to produce 40,000 tonnes a year of titanium dioxide in Orissa.

Prime Minister Manmohan Singh told journalists after his meeting with Russian President Vladimir Putin, “We have agreed to use these resources for the multi-role transport aircraft and titanium dioxide projects.”

The fund, set up in 1993 to liquidate India’s debt to the former Soviet Union, has, so far, not been used for investments in India.

Russia’s attempts to use the fund to invest in IISCO Steel Plant and the Kudamkulam nuclear plant had been thwarted by the Indian government, which preferred purchases of Indian goods and services with the money.

However, the fund will now be used for the titanium dioxide project in Orissa and to develop the multi-role transport aircraft in a collaboration between Hindustan Aeronautics Limited (HAL) and two Russian aviation firms.

Russia will buy three-fourth of the titanium dioxide, which imparts brightness to products such as paints, sunscreen and chocolate wrappers. The joint venture will be between Tekhnokhimholding from St Petersburg and Kerala’s Minerals & Metals Ltd.

The aircraft project is a $700-million joint venture between HAL and Russian aviation companies Ilyushin and Irkut Corporation. The parties will design, manufacture and market the multi-role transport aircraft.

HAL has pegged the demand for the aircraft at 200 in India and Russia. The aircraft can be used for military operations as well as for cargo handling; it can also be turned into a 100-seater passenger aircraft.

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