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NT Bureau
Chennai, Jan 16:

        Optimising the India-Russia shipment route, development of investment cooperation, quick access to information on trade opportunities and the expansion of inter-banking cooperation are the four issues that need attention to boost Indo-Russia trade, said Russia's Ambassador to India, Vyacheslav Ivanovich Trubnikov.

        He was speaking at a session on India-Russia Trade Relations organised by the Confederation of Indian Industry (CII) here yesterday. The session provided an opportune environment for Indian business interests to encourage bilateral investments and to point out roadblocks in the run-up to President of the Russian Federation Vladimir Putin's visit to India later this month.

        The lack of an efficient shipment route pushes up freight costs and its development through Iran has been delayed on account of the unstable political situation, said Trubnikov.

        A CII study released on the occasion, 'Deepening India-Russia Trade Relations', suggested that the North-South Corridor provides the shortest link between India and Russia through Iran and the Caspian Sea. Once commissioned, the North-South corridor can help reduce costs by nearly one-third.

        Better and more up-to-date information can help businessmen of both countries find qualified partners, the Ambassador said. The launch of the website on trade between India and Russia is a step in this direction. 'The launch of another trade portal to facilitate online interaction between businessmen will be the next step.'

        'Businessmen should be able to use debt funds for bilateral investment, and I hope the Russian-India Investment Forum assists in boosting investment,' the Russian Ambassador said. Both countries should cooperate in research and development and the commercialisation of technology. Further, the network of Russian banks is very underdeveloped in India, and even though there are some Indian banks in Russia, much still needs to be done.

        India-Russia trade, at $2.76 billion in 2005-06, grew by 41 per cent over the previous year. Trubnikov said it should grow further given a series of high-level initiatives taken by both sides in 2006 and 2007. 'The visit of President Putin to India later this month, the Russian-Indian Forum on Trade and Investment in February and another business meeting in June are some of the forthcoming events to foster bilateral trade.'

        India and Russian companies can cooperate on ventures in third countries, said vice chairman of the Sun group, S V Khemka. 'This is easier now than before because Russian business is now in its young adulthood.' Indian businesses need to look ahead in light of the changes shaped by President Putin, and recognise that today's Russia is a stable market economy. Financial services, the real estate sector, infrastructure, the mining sector are other areas that India can look to investing in Russia, said Khemkha.

        Another sector India is already present in a big way in Russia is the pharmaceutical industry. Although Russia is India's second biggest market for pharmaceutical products, India's position has actually fallen to fifth rank, behind France, Germany, Slovenia and Hungary, Firoz KH Khan of Ranbaxy Laboratories Ltd pointed out. In his presentation, Khan emphasised India's competitiveness in terms of production costs, setting up plants and clinical research. He said that Russia is the 8th largest pharma market and the 9th largest generic market in the world.

        The CII study suggests that a Comprehensive Economic Cooperation Agreement, under consideration now, can be viable only if there is a viable route for transport of goods. Both India and Russia need to resolve problems concerning the issue of visas since the movement of professionals is important here.

        The greatest area where the two countries can cooperate on investment-related matters is in the area of energy. There is already a lot of investment from India in Russia and new areas and models can be considered in future, says the CII study.

        The study also suggests building a strong platform to share views on innovation and R&D in manufacturing. This would help both sides to cut costs in production and learn from each other on how to improve productivity.