The Hindu Business Line : India, Russia to set up joint forum on trade, investment

The Union Minister for Commerce and Industry, Mr Kamal Nath, with the Russian Minister for Economic Development and Trade, Mr G.O. Gref, in the Capital on Monday. - Ramesh Sharma

New Delhi , Feb. 6

INDIA and Russia on Monday decided to set up a joint forum on trade and investment as a prelude to the feasibility of signing a Comprehensive Economic Cooperation Agreement (CECA) between them, besides projecting increase in bilateral trade turnover to $10 billion by 2010.

The Union Commerce & Industry Minister, Mr Kamal Nath, stated this here at a joint press conference with his Russian counterpart, Mr German Gref, after both of them signed the protocol on completion of bilateral negotiations on the Accession of Russia to the WTO and the memorandum of understanding on cooperation between the Ministry of Commerce and Industry of India and the Ministry of Economic Development and Trade of the Russian Federation.

Both sides have also agreed to strengthen cooperation in oil and natural gas, besides beefing up existing cooperation in crucial areas, the two Ministers said.

Mr Kamal Nath said that India was looking forward to Russia's early accession to the WTO for further cooperation in the multilateral trade forum on the basis of mutual benefit.

As per the WTO accession procedures, the country seeking accession is required to negotiate bilaterally with each member country of the WTO. It is in accordance with this principle that both the Ministers signed the protocol on completion of bilateral negotiations on the accession of Russia to the WTO.

Joint study group: The MoU provides for the setting up of a joint study group (JSG) with a view to assessing the feasibility of signing CECA between the two countries.

The JSG is likely to prepare a roadmap for achieving a significant increase in bilateral trade turnover by diversifying and strengthening relations in a wide range of areas particularly trade in goods, services, investment and economic cooperation. The JSG, to be co-chaired by the Commerce Secretary from the Indian side and his counterpart from the Russian side, is expected to suggest specific measures to stem the decline in India's exports to Russia.

Even though bilateral trade is increasing — with growth of 11 per cent in two-way trade in 2004-05 — India's exports to Russia has been declining over the last few years. Indo-Russian bilateral trade in 2004-045 was Rs 8,369.85 crore i.e., $1862.81 million ($1.8 billion).

Of this, India's exports to Russia amounted to Rs 2,684.33 crore i.e., $597/43 million, and India's imports from Russia valued at Rs 5,685.52 crore, i.e., $1,265.38 million.

`Speed up pacts': Earlier, Mr Kamal Nath held a bilateral meeting with Mr Gref during which trade issues were discussed. Mr Kamal Nath requested for early finalisation and signing of the draft inter-governmental agreement concerning higher offtake of Indian tobacco by Russia through the purchase of cigarettes/tobacco or procuring of cigarettes from a joint venture proposed to be set up in Russia by any Indian company which would procure tobacco from India.

He also requested Mr Gref to accord protection to "Darjeeling tea" as a geographical indication and to recognise "Assam", "Nilgiri" and "Indian tea logo" as labels/well-known original brands and sought facilitating measures for setting up joint ventures between Indian tea companies and Russian business houses in order to augment the export of quality tea from India. Cooperation in diamond trade between Russia and India also figured in the discussions and Mr Kamal Nath urged the Russian Minister to expedite the decisions agreed by both sides for inclusion of MMTC in the list of regular participants for auction and tenders for selling of rough diamonds by Alrosa, the Russian diamond mining company as also to explore the action taken by the Russian side for setting up a joint venture by Alrosa with MMTC for manufacturing jewellery in India.

The Indian side also pleaded with the Russian authorities to quicken the release of payment due to Indian exporters and delink this issue from the overall settlement of state credit. The issue of early conclusion of simplified visa procedure agreement to enhance trade and economic cooperation also figured in the deliberations.

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