New Delhi, Oct 18: The unique relationship between India and Russia has weak economic component because the relation is government-driven, a high-ranking Indian diplomat said here Thursday.
“A government-driven relationship is not enough to boost economic relations and trade.. it needs the private sector to push the relationship,” said Ajay Bisaria, joint secretary (Eurasia) in India’s foreign ministry at a forum on India-Russia relations, jointly organised by the Federation of Indian Chambers of Commerce and Industry and the Ministry of External Affairs.
Admitting that the target of doubling bilateral trade by 2015 to $20 billion from its current levels of under $10 billion would be “challenging to meet”, Bisaria mentioned some on-going initiatives for a qualitative change in the relationship.
“A Russia-India joint investment fund is being pushed by the government. Russia and China have a similar fund among themselves,” Bisaria said.
According to Bisaria, the government has been talking to the public sector State Bank of India for a $1 billion fund, but not enough private sector corporates have come forward to participate.
“A Comprehensive Economic Cooperation Agreement between India and Russia will be critical in this regard,” Bisaria said.
Such an agreement was discussed at the summit of both countries’ leaders and there has been some progress, said Alexey Idamkin, political counsellor in the Russian Embassy here.
“There has been some progress and a consensus reached on a mechanism – a Joint Study Group – towards preparing a comprehensive economic agreement,” Idamkin said.
“India has taken the initiative to revive the International North South Transport Corridor project that involves countries like Russia and Iran. It is a purely economic project and politics don’t enter here at all,” Bisaria said
This transport corridor, passing thorugh Iran, among other countries, besides providing boost to economic activity in the region, would provide a time advantage of 40 percent over the Black Sea route to Europe.
Speakers at the forum pointed out how the Indo-Russian relationship has been unique and enduring on the basis of coinciding interests in political and strategic spheres.
India’s former foreign secretary Kanwal Sibal pointed out that India had imported over $30 billion of defence equipment from Russia during 2001-2010.
In the context of the realisation about greater private sector involvement to carry forward the relationship, Bisaria drew attention to the sectors ripe for investment.
“There is a $18 billion pharmaceuticals and $16 million IT market in Russia for Indian investors to look at. Russia is also opening out a $33 billion privatisation opportunity. India is projected to invest $3 billion in infrastructure over the coming years… there is the planned Delhi-Mumbai industrial corridor.
“There are huge opportunities coming up and the private sector needs to capture it,” said Bisaria.