The Hindu : India keen on revamping trade with Russia

Online edition of India's National Newspaper
Sunday, May 18, 2003

International

International

India keen on revamping trade with Russia

By Vladimir Radyuhin

MOSCOW MAY 17. India has mounted a serious effort to improve the mechanism of government-to-government interaction with Russia to promote bilateral trade and economic cooperation. The External Affairs Minister, Yashwant Sinha, last night called for revamping the Indo-Russian Inter-Governmental Commission (IRIGC) for trade, economic, scientific and technological cooperation to make it more efficient and result-oriented. He told the 9th session of the IRIGC, which he co-chaired with the Russian Minister for Industry, Science and Technology, Ilya Klebanov, that the commission needed to invite private sector participation and set up a decision-monitoring mechanism.

"The most important thing that is missing in the IRIGC is business-to-business contacts. These contacts must be intensified to remove the mental blocs on both sides that hamper bilateral trade growth."

During his visit Mr. Sinha met the leaders of Russia's two biggest business associations, the Chamber of Commerce and Industry and the Union of Industrialists and Entrepreneurs, to discuss establishing closer working contacts with India's CII and FICCI.

The Indo-Russian commission, made up of Government officials from various Ministries, has been in existence for 10 years now, but has failed to boost the sluggish bilateral trade, which has been stagnating at about $1.5 billion every since the break-up of the Soviet Union. Part of the problem lies in the fact that the bulk of Indian exports to Russia are financed from the rupee funds generated through the repayment of the old Indian debt to the erstwhile Soviet Union.

"We should move as quickly as possible to a free-currency trade which will put Indian exporters in Russia in a more competitive environment," Mr. Sinha told Indian presspersons after the commission concluded two days of deliberations on Friday. One way of speeding up the transition to dollar-denominated trade would be to convert part of the rupee debt funds into Russian equity in India.

The Minister also suggested that a review be undertaken to see whether some of the commission's 11 working groups could be scrapped or new ones added. He proposed setting up a sub-working group to promote interaction between the medium and small business sectors and forming a venture capital fund to help them jointly commercialise high-end technologies developed under the Indo-Russian programme for scientific cooperation. The IRIGC should also pay more attention to business interaction at regional level.

Mr. Sinha laid special emphasis on ensuring implementation of decisions taken by the commission through close monitoring. It has been decided to set up a monitoring task force within the commission. The Indian side proposed a more thorough scheduling of the working group meetings that precede plenary sessions of the IRIGC, so that there is no last-minute rush.

It would also help if the heads of the working groups meet every other month to review progress and resolve emerging problems.

Mr. Sinha said he was happy with the results of the IRIGC work. "We have not only added incrementally to the relations between our two countries but have broken new ground in IRIGC," he said.

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