Russia has committed to invest around USD 500 million in India’s Infrastructure sector and signed a Memorandum of Understanding (MoU) to equally invest in National Infrastructure Investment Fund (NIIF), to form USD 1 billion joint investment fund ‘Russian Indian Investment Fund for investment opportunities in India and growth of Russian business in India.

In a press statement, Indian Prime Minister Mr. Narendra Modi said, “Our efforts for early setting up of the Investment Fund of US Dollars 1 billion between National Investment and Infrastructure Fund (NIIF) and Russia Direct Investment Fund (RDIF) will help advance our infrastructure partnership. We also want our economic linkages to connect the regions and states in both countries.”

Government of India had set up the Rs 40,000 crore National Investment and Infrastructure Fund (NIIF) Ltd in December last year to maximize the economic impact through infrastructure development in commercially viable projects in both Greenfield and Brownfield projects including stalled projects.

PTI quoted Mr. Krill Dmitriev, Chief executive of RDIF saying, the money would be invested in various infrastructure projects with Russian component, like transport infrastructure, energy, petrochemicals and other different projects.

On the sidelines of the BRICS Summit in Goa on Saturday during 17th India-Russia Annual Summit,  both the countries have signed 16 MoU,  including; Haryana smart city project, MoU between Indian and Russian railways, formation of Russian Indian Investment Fund,  energy cooperation agreement, Co-operation in shipbuilding, LNG sourcing and other.

Recently released  a joint report of the PwC-NAREDCO-APREA projected that India will require investment of USD 1 trillion over a period of next 5-7 years to meet the Infrastructure and housing demand. In the last few years, the Indian government has made various efforts to bring the investment in infrastructure sector, on the same line government brought various policies and made relaxation in the FDI limits in construction and infrastructure sectors.

In Budget 2016-17, government announced Rs 2.21 lakh crore budgetary allocations for much needed infrastructure sector and road sector alone allocated Rs 97,000 crore. In last two years, the Ministry of Road Transport and Highways, approximately awarded road projects worth Rs 2 lakh crore in the country and it planned to award works worth Rs 7 lakh crore in the next five years to develop National Highways in the country. For this year itself, National Highways Authority of India (NHAI) has aimed projects worth Rs 1 lakh crore.

Earlier this year, President Mr. Pranab Mukherjee had said, India is planning to invest over USD 120 billion for the development of airport infrastructure and navigation services over the period of next 10 years. As per the statement of Indian Railway Minister Mr. Suresh Prabhu, to improve railway infrastructure and mobility services, Indian railways would invest USD 140 billion over next 5 years.

As urban population is rising gradually, the government is committed to investment in urban transport infrastructure like metro/mono rail systems. Currently  over 500 km of metro rail is under construction  cross the country like Mumbai, Hyderabad, Chennai, Ahmedabad, Delhi and other cities.  For this fiscal, government has set aside Rs 100 billion for the various metro rail projects.

As infrastructure projects have revived in the last two years especially, road projects, led to the demand of construction equipment in the country.  As huge investment is coming from foreign countries and private sectors in infrastructure projects and government commitment towards revival of infrastructure sectors, would further drive the construction equipment market. As more projects started coming on the ground, the sale of the machinery will go further.

Source: Information has been obtained from Government, PTI, UITP & media reports