Indo-Russian bilateral trade far below its true potential

FE Team | Published: November 12, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

MOSCOW, Nov 11 (PTI): 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 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.
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.
The next meeting of the forum is scheduled for February 2008 in India.