The Russian Direct Investment Fund (RDIF) and State Bank of India would each invest up to USD 1 billion in the consortium, the Russian sovereign wealth fund said in a statement.

The entities would team up to facilitate access to long-term capital in Russia and India and actively promote mutual investments.

The USD 10-billion RDIF's Chief Executive Officer Kirill Dmitriev and State Bank of India Chairman Pratip Chaudhuri signed the Memorandum of Understanding (MoU) here for establishing the consortium.

Prime Minister Manmohan Singh and Russian President Vladimir Putin were also present on the occasion.

The consortium can make investments in India and Russia. "Basically we are creating this platform that has capital allocated for high return projects in interesting sectors, with synergy between India and Russia," Dmitriev said.

Once the agreement is in place, RDIF and SBI would team up to facilitate access to long-term capital in Russia and India besides promoting mutual investments.

The emphasis would be on projects geared towards "higher purchasing power of the population", creation of value addition in the extraction and processing of natural resources as well as development of manufacturing businesses and service sector companies.

"... the co-investment consortium , given the government support, helps mitigate the risks that might arise from the global economic situation," Dmitriev said.

Chaudhuri said with the partnership, the bank would have access to interesting and very attractive projects from an investment point of view.