PM's Russia visit: India hopes for leg up to trade

As Prime Minister Dr Manmohan Singh starts his two-day visit to Russia today, there is hope that the two cold war era partners will find ways to increase economic cooperation as well.

"The volume of our two-way bilateral trade is still far below its true potential," Singh told Russian news agency RIA Novosti and cited high transport cost and inadequate exchanges as reasons. He said he would discuss the issue with Russian President Vladimir Putin on Monday.

At present, India's exports to Russia are worth $1 billion, less than 1 per cent of the total, while imports by India account for 1.2 per cent of Russia's total exports.

Advocating stronger economic ties, Singh said, "Diversification of trade to high-value items such as gems and jewellery, rationalisation of tariff lines, setting up of joint ventures and greater information exchange could change the scene."

The two nations are studying the recommendations of a joint study group set up to suggest a road map for increasing bilateral trade to $10 billion by 2010. Officials said the two countries were likely to sign a Comprehensive Economic Cooperation Agreement soon.

A slew of pacts on trade, energy and technology transfer would be signed during Singh's visit. Although the two countries' defence and strategic relationship is perceived to be passing through a rough patch, mainly due to India's recent dependence on the US and Israel for arms, officials said the two countries would sign a pact to develop and produce multi-role transport aircraft.

A deal on building four additional reactors at the Kudankulam plant in Tamil Nadu is also likely tomorrow, though officials said last-minute changes were still being made in the draft of the agreement. The Kudankulam pact could be a major morale-booster for the UPA government, still coming to terms with scuttling of the nuclear deal by the Left parties.

Officials said Moscow was confident of selling the Kudankulam project to the International Atomic Energy Agency by reasoning that it was a mere extension of its earlier project for building two power reactors of 1,000 Mw. Singh is also likely to talk to Putin on delays in delivery of arms and cost escalations in armament projects.