Tatarstan’s main treasure is its people

by Igor Sapunov

It also shares common interests with India, while offering loads of possibilities to foreign investors across diverse sectors.

Highlights:

  • Tatarstan is one of the most economically developed regions in the entire Russian Federation.
  • Its special economic zone, Alabuga, brings in 59 per cent of the total revenue and 34 per cent of tax revenues from all of the country’s SEZs and provides 39 per cent of private investment in Russian SEZs.
  • IT, medicine, agriculture, mechanical engineering and energy are some sectors that hold great potential for bilateral engagement between India and Tatarstan.

Today, we can confidently announce that Tatarstan is not only one of the most economically developed regions in the Volga district but also the entire Russian Federation. With an area of 68,000 sq km, located right in the middle of the European part of Russia, it is home to dense coniferous and deciduous forests as well as two main water arteries – the Volga and Kama. However, the region’s main treasure is its people. Today, nearly 4 million people representing 173 nationalities live here. More than half of the population – 2.2 million people – comprises able-bodied citizens, employed in local enterprises.

Despite agricultural activity being the main source of income in most parts of the region, seven large federal investment sites successfully operate in the territory. One of them is Alabuga, a special economic zone (SEZ) of the industrial type with truly impressive performance indicators. It brings 59 per cent of the total revenue and 34 per cent of tax revenues from all of the country’s SEZs and provides 39 per cent of private investment in Russian SEZs.

Currently, there are 33 resident companies, including international ones, operating in industries such as engineering, chemistry, building materials production and metal processing.

The main distinguishing feature of Alabuga is the availability of communication channels and noticeably lowered tax rates. In particular, the income tax rate is 2 per cent for the first five years, 7 per cent from six to ten years and 15.5 per cent until 2055.

The key argument for a foreign investor in choosing a production site may be the fact that, in accordance with the regime of the free customs zone, imported equipment and products used in the territories of the Tatarstan’s SEZs are exempted from customs duties.

Tatarstan is pursuing an active investment policy. Following this aim, in 2011, a special executive body, Tatarstan Investment Development Agency (TIDA), was established with the aim of attracting investments, including foreign ones, supporting and implement investment projects, participating in the formation of a favourable investment climate in the republic and increasing the investment attractiveness of Tatarstan.

TIDA’s employees are doing their best to enhance an inflow of FDI into the republic, expanding the network of affiliate contacts, familiarising representatives of foreign companies with the investment, economic and production potential of Tatarstan.

As a result, the republic took the ninth place among the other 85 subjects of Russia in terms of the volume of FDI. Statistical data shows the rising interest of foreign entrepreneurs and investors in Tatarstan. Towards the end of the year, every three days, at least one company with foreign capital was registered here.

Currently, the biggest investing countries are China, the US, the Netherlands, Turkey and UAE. Today, large-scale projects of companies from these countries are being implemented on seven investment sites. In Chelny, a territory with advanced social-economic development, two plants of the Chinese company Haier were launched, which will produce washing machines and TVs. The total investment is about $51.3 million (3.8 billion rubles).

The Turkish Republic, due to its historical-cultural affinity with Tatars, has a close partnership with the republic and presented by a number of companies. Kastamonu Entegre, Hayat Kimya, Automotive Glass Alliance RUS, Trakya Glass RUS, Dizayn Group and Coskunoz Alabuga successfully conduct their business in Tatarstan.

The Republic of Tatarstan is currently actively looking for new foreign investors. One such investor could be India. Unfortunately, the partnership experience between our parties is modest.  In 2019, by the Decree of the President of the Republic of Tatarstan Rustam Minnikhanov, a working group was created to consider the possibility of developing cooperation with India’s Dhillon Group, which is engaged in the production of plastic packaging, development of information technologies, real estate.

There are niches for bilateral cooperation. Even at first glance, there are several areas that can be singled out where the Republic of Tatarstan and India may have common interests. In particular, both sides pay great attention to the development of IT, medicine, agriculture, mechanical engineering and energy.

Tatarstan Investment Development Agency holds events aimed at attracting investments into these sectors on a regular basis. One of these was the third Industry Forum on Public-Private Partnerships: Invest in Health. The key issues of the event were the exchange of experience between Russian regions in the implementation of PPP projects in the healthcare sector, the reasons for terminating concession agreements and attracting private investment in the industry.

The Republic of Tatarstan is always open to new projects, ready to hold a dialogue and to provide foreign investors with everything they need for making their business comfortable!

Invest in Tatarstan, invest in Success!

Igor Sapunov is the Deputy Chief Executive of the Tatarstan Investment Development Agency.

About the Author: Igor Sapunov