Negotiations are underway between the finance ministries of India and Russia to restructure the $3 million debt owed by New Delhi to Moscow.
Following the breakup of the USSR, the terms of the unique rupee-rouble trade also had to be renegotiated.
In 1993, the two countries decided that they would rework the terms on which trading would be done.
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However, the tricky issue of the outstanding debt that India owed the USSR had to be resolved.
In 1997, the Indian government suggested that 10 per cent of the debt be kept for projects with government equity.
The suggestion was ignored by the Russian government. However, when President Vladimir Putin visited India a week ago, he said part of the Indian debt could be used as investment towards joint ventures.
The government of India has been arguing that a higher percentage of outstanding debt be used to pay for investments.
Because the prices of Indian commodities exported to Russia has been rising, using the debt to pay for commodities is not in India's interest.
Putin