The Hindu Business Line : Russian rendezvous

Next year is the “Year of Russia in India” and 2009 is the “Year of India in Russia”. The object of the exercise is to show how the two countries have changed in recent years and to showcase the efforts to chart out new directions for the “strategic partnership” between the countries. The Prime Minister, Dr Manmohan Singh’s recent visit to Moscow should be seen against this background, especially the agreements signed between the t wo sides. Four accords were signed, the most important of which related to the rupee-rouble Indian debt totalling around Rs 8,000 crore, a left-over from the Soviet-era rupee trade arrangement, which allowed bilateral trade to be conducted independent of the dollar.

Issues on the fund’s use have remained unresolved over the past decade, which is why the accord should be seen as a breakthrough. While the Russian side has reportedly said that the fund will be used to benefit bilateral trade, other reports indicate that a part of it will be used for Russian investment in the multi-role transport aircraft project, on which an agreement was signed during the summit. The two other accords signed relate to Chandrayaan-2 — a joint unmanned moon mission by 2011 — and jointly combating illicit trade in narcotics and psychotropic substances. There is little doubt that co-operation in all these sectors is important for bilateral ties. Even so, it is not difficult to agree with Dr Singh that a substantial upgradation of economic relations between the two countries is required because they form “the bedrock of our strategic partnership”. Apart from the rupee-rouble issue, there are other critical areas of economic co-operation, progress on which has been tardy. The Prime Minister is aware of this, as was indicated by his address to Indian and Russian businessmen. Among other things, unless there is much closer interaction between Indian and Russian companies in the conduct of bilateral business and joint ventures in third countries (a point made by the Indian envoy to Moscow), the strategic partnership would be devoid of real economic muscle.

The new bilateral trade target of $10 billion by 2010 should be viewed through this prism, the current turnover of $4 billion being even less than what was notched up during the Soviet regime (Russia’s trade with China now is at $36 billion, that with the European Union at around $330 billion). Clearly, the road ahead is difficult, as is also the case with implementation of Defence projects, such as the delivery of the refurbished aircraft-carrier Admiral Gorshkov, currently plagued by price and other problems. Closer Russian co-operation in the nuclear power sector will also be helpful. But here, too, the long-shadow of the proposed US nuclear-deal with Washington appears to be obscuring the path, for the moment at least.

More Stories on : Editorial | Foreign Trade | Foreign Relations

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Equity and liability classification

Russian rendezvous

Insights from PCAOB report

Why does the American way fail in Japan and India?

Martial Law in Pakistan — The General fights back

Testing time in Winter session

Risk management can be a competitive weapon in financial services

Good performance reports explain all variances

Civil societies