| Cooperation in infrastructure would, however, be the focus during the India-Russia forum slated for Tuesday and Wednesday, visiting Russian Minister of Economic Development and Trade, Elvira Nabiullina, tells Rakteem Katakey and Rituparna Bhuyan in an email interview. Excerpts: |
| How do you see India-Russia trade developing over the next 10 years? |
| Russia and India are two of the world's largest and most rapidly developing economies. They have a huge potential for increasing bilateral trade, which has started growing in the past few years, and increased by 34 per cent in 2007. |
| But this is still not enough, as their shares in each other's trade is only about 1 per cent, which points to untapped potential. In principle, there are ways to increase trade in sectors of high export interest. |
| There are also considerable possibilities for implementing joint projects in aircraft manufacturing, space exploration, mechanical engineering, non-ferrous metallurgy, the chemical industry, nanotechnology, IT and infrastructure projects. |
| Bilateral economic relations are not limited to trade in goods and services. Since there is a large distance between our countries, we think that mutual investment projects should make up the core of our cooperation. |
| We have agreed with our Indian partners that we will hold annual investment forums to promote such cooperation. These forums should provide a venue for exchanging ideas on possible projects and signing agreements between Russian and Indian companies. |
| The first such forum was held very successfully in February 2007. The Siberian Coal and Energy Company (SUEK) and Inter RAO UES, the import and export operator of Russian electricity monopoly UES, signed agreements with India's SUN Group on joint work and investment during the forum. |
| AFK Sistema, one of Russia's largest diversified corporations, agreed to supply silicon circuits to an Indian producer of DVD players. The second forum will be held in New Delhi on February 12 and 13, 2008. Its agenda includes panels on the key spheres of Russian-Indian cooperation, such as high technologies, power generation, transport, infrastructure, and steel and coal production. |
| What hinders the development of Russian-Indian cooperation? |
| Among the factors that impede Russian-Indian trade are distance and the related problems of transportation, under-developed banking and financial cooperation, tariff and non-tariff restrictions, different compliance standards, insufficient information exchange and the language barrier. |
| How is the agreement to offset India's arrears on earlier Russian loans, by investments coming along? In what areas will these investments be used? |
| On April 14, 2007, an intergovernmental agreement was signed on the establishment of a joint facility for the production of titanium dioxide and other titanium products in Orissa. |
| An intergovernmental agreement on joint development of a multi-role transport plane was signed during the Indian Prime Minister Manmohan Singh's visit to Russia on November 12, 2007, along with an intergovernmental agreement on broader use of the money being repaid by India to Russia under the earlier government loans granted by the former USSR and Russia. |
| The Russian part will be financed out of India's rupee debt. Russia and India are considering other projects to be financed out of the debt money. |
| Besides Russian cooperation in constructing a nuclear plant in India, in what segments in the energy sector are the two countries working jointly? |
| Russia and India are considering expanding their cooperation in the development of oil and gas deposits in the two countries. |
| Also Russian companies are considering cooperating in construction of oil refineries in India. We are also discussing the possibility of joint construction of major transnational gas pipelines. There are also substantial possibilities in technological cooperation. |
| What is the share of Indian companies in the Russian pharmaceutical market? What is the outlook for Indian companies in Russia? |
| Russian consumers view Indian medicines, above all, as a replacement for more expensive medicines made in the West. India's share of the Russian pharmaceutical market is about 5 per cent. |
| Pharmaceuticals account for the biggest share of Indian exports to Russia (33.8 per cent, or $400.8 million, in January to the end of November 2007, according to Russian statistics). |
| In recent years, Indian exports of pharmaceuticals to Russia have been growing at a steady 20-30 per cent a year. |
| That is a good figure, which reflects sustained demand for Indian products and promises good prospects for Indian companies in the Russian market. |
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