When Russian President Vladimir Putin meets Prime Minister Narendra Modi on Thursday, the camaraderie will be more than usual as Moscow is in as much need of a steady trading partner as New Delhi.
The two leaders are expected to lay the ground for greater trade between the two countries in products such as diamonds, farm goods, heavy machinery and pharmaceuticals.
Ties in defence, civil aviation, and energy — including civil nuclear — will also form a significant part of the discussions.
Putin comes here at a time when his country is facing sanctions from Western powers, and Russia, in turn, has reduced trade with them following the Ukraine crisis. India, on the other hand, is looking for greater trade ties closer home.
“Russia has already made a beginning by allowing import of buffalo meat and dairy items from India. We expect the visit to result in further deepening of trade and investments,” a Government official, who did not want to be identified, told BusinessLine .
On the energy front, the two leaders are expected to oversee commercial deals as well as some policy tie-ups.
Putin and Modi are likely to announce a Joint Study Group (JSG) to look at the feasibility of a Free Trade Agreement between the two countries. The FTA will aim at multiplying the present low level of bilateral trade of $6 billion by bringing down tariffs on key products and removing non-tariff barriers on both goods and services.
India’s exports to Russia at present are less than 1 per cent of that country’s total imports. New Delhi is hopeful of getting Moscow to agree to turn India into a diamond hub by selling diamonds directly to it.
“We could save a considerable amount in commissions charged by trading hubs like Brussels if diamonds come directly to India,” the official said.
India has to sort out certain taxation issues before it is profitable for diamond exporters to treat it as a full-fledged hub, but the Gems & Jewellery Export Promotion Council is hopeful of signing pacts for dealing in small quantities of diamond with Russian company Alrosa during the President’s visit.
Pharmaceuticals is another area where there could be collaborations between the two as Russia wants to buy generics from India.