India-Russia trade target of $10bn faces major hurdles

July 30th, 2008 - 8:53 pm ICT by IANS  

New Delhi, July 30 (IANS) The targeted $10 billion Indo-Russian bilateral trade by 2010 faces major hurdles, trade experts from both countries agreed during a video conference Wednesday. During a video bridge between Moscow and Delhi organised by the Russian news and information agency Ria Novosti, Indian and Russian business representatives and trade experts said these hurdles need to be removed if the targeted trade volume is to be achieved by 2010.

This strategic target has been agreed upon between the two countries at the highest political level.

The Indian side in Delhi was represented by Rajan Kohli, deputy secretary general of industry lobby Federation of Indian Chambers of Commerce and Industry (FICCI), Pripuran Singh Haer, secretary general of the India-Russia Chamber of Commerce, and Rajan Madhu and Jyotsna Choudhuri, respectively the president and general secretary of the India-CIS Chamber of Commerce and Industry.

The Russian side in Moscow was represented by Georgy Petrov, vice-president of the Russian Chamber of Commerce and Industry, Andrei Volodin, senior researcher with the Institute of World Economy and International Relations at the Russian Academy of Sciences, Nikolai Grunin, senior expert at the Asian and Australian division of the foreign trade department under the economic development ministry, and Yevgeny Yasin, leading Russian scholar and former minister of economics.

Both sides agreed that the most important hurdle was the lack of information about each other. While Indian business is unaware of the changes in the Russian economy and how to do business with Russians, Russian business too was unaware of how the Indian economy has changed since the days of the Soviet era.

The information gap is so glaring that the two sides could not even agree on the actual volume of trade currently between the two countries. While Indian speakers said the volume of trade was around $3.5 billion, the Russian side said it was $5.3 billion.

The two sides, however, agreed that there was a huge potential for bilateral trade. Speaking on behalf of Russian business, Petrov said, “Even if the trade volume is $5 billion, it is not good enough given that both the economies are more than trillion-dollar economies”.

“Even $10 billion is not good enough,” Petrov said, a view the entire Indian side agreed with.

The second hurdle was that there has been no progress on a five-year-old proposal to build a North-South Transport Corridor through Iran.

Currently, bilateral trade is routed through European countries such as Finland and Germany. Both sides agreed that the political will needed to implement the corridor seemed to be lacking.

The meeting discussed other issues such as expansion of the trade basket and easier visas for Indian business among others, but the two sides did not seem to see eye to eye on how these hurdles could be removed.

The meeting, however, ended with both sides agreeing that every effort must be made by next year to remove these hurdles as 2008 has been declared the Year of Russia in India, while 2009 has been designated the Year of India in Russia.

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