PM for diversification of Indo-Russian trade

Observing that Indo-Russian trade is far below its true potential, the PM sought its diversification to high value items.

Observing that Indo-Russian bilateral trade is far below its true potential, Prime Minister Manmohan Singh has sought its diversification to high value items and investments in sectors like machinery and agriculture.

“Currently, India’s exports to Russia are around USD 1 billion, which is less than 1 per cent of India’s overall exports and Indian imports from Russia are about 1.2 per cent of Russia’s total exports,” he said in an interview to Russia’s government agency RIA Novosti ahead of his two-day Moscow visit beginning on Sunday.

According to him, relatively high transportation costs and inadequate exchanges between Indian and Russian businessmen were some of the reasons for low trade volumes.

“Diversification of trade to high value items such as gems and jewellery could offset the transportation cost disadvantage. Rationalisation of tariff lines, setting up of joint ventures and greater information exchange would also contribute to enhancing trade,” he said.

“Additionally, there is potential for investment in sectors such as machinery, automobiles, pharmaceuticals, agricultural and food products.”

The Prime Minister called for a greater involvement of the private sector, which is essential to expanding bilateral trade. Quality standards and certification requirements also need to be mutually agreed upon.

“I look forward to discussing these issues with President Putin,” Singh said ahead of Monday’s summit in the Kremlin.

Story continues below this ad

Singh said the two governments had set up a Joint Study Group last year to examine measures to boost bilateral trade to USD 10 billion by 2010 and to study the feasibility of signing a Comprehensive Economic Cooperation Agreement.

The report of the Joint Study Group has been submitted, and is in the process of examination by the two governments.

Responding to a question about the lack of mutual investments, he noted the fact that India and Russia are two of the fastest growing economies in the world and both the nations have been attracting significant Foreign Direct Investments.

“One of the reasons for the currently limited investments seems to be the lack of information and awareness among the business communities on both sides. We set up the India-Russia Forum on Trade and Investment last year for business-to-business interaction. The first meeting of this Forum was held in February, 2007 in India with the participation of over 500 businessmen from both countries.”

Story continues below this ad

The next meeting of the Forum is scheduled for February 2008 in India.

“Our banks and financial institutions are now meeting regularly and more banks are seeking to establish correspondent relations. This should contribute to facilitating investments between our two countries,” he said.

According to Singh, in the field of Indo-Russian technological cooperation there are “excellent” prospects.

“Without doubt, there are excellent prospects. India already has extensive cooperation with Russia in the field of science and technology under the umbrella of the Integrated Long Term Programme. This programme has been in operation for 20 years, and has many achievements”.

Story continues below this ad

“The setting up of seven Joint Centres of Excellence is one example. Marketing of technologies is an important focus area for both our countries. We are planning to set up a Joint Technology Centre,” Singh said.

Nanotechnology and bio-technology are two potential areas of special significance for future cooperation, he said.

Speaking on the space cooperation, Singh recalled that it dated back to the launch of the Indian satellite ‘Aryabhatta’ in April 1975.

“Indian and Russian space agencies are cooperating in the joint development and use of the Russian satellite navigation system GLONASS, in a joint satellite project involving university students from both sides called YOUTHSAT, and through Indian participation in the Coronas Photon scientific mission.

Story continues below this ad

“I am particularly excited about our joint mission for lunar exploration,” Singh said ahead of the signing of a bilateral pact in the Kremlin on Monday, which would take Russia onboard in ISRO’s Chandrayan lunar mission.

Singh expressed confidence that the Year of Russia and India to be conducted in 2008 and 2009 respectively in both the countries is an important joint effort to further strengthen the understanding and bonds of friendship at the people-to-people level.

“The events will encompass diverse fields of human endeavour, including art and culture, science and technology, and economy and industry. Exhibitions, trade fairs, industry and media interactions, scientific exhibitions, seminars, books fairs, film festivals, and fashion and food events will form part of the Year of Russia in India, involving federal and regional governments on both sides,” Singh said.