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India, Russia identify new prospects for bilateral cooperation, investment cooperation

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Kirill Pushkarev

By: Kirill Pushkarev

Kirill Pushkarev is the Head of Press Service, Group of Companies of the Russian Export Centre, a national institution for support of non-resource exports in key and promising markets such as India, by providing a wide range of financial and non-financial support measures to Russian exporters and their foreign partners.

 

With bilateral trade between India and Russia showing a robust growth, growing by 17% to $ 11 billion in 2018 alone, Russian Export Centre is focusing on providing a wide range of financial and non-financial support in order to realize the full potential of the bilateral trade between the two countries by improving export conditions and leveling existing trade barriers.

For decades, Russia and India have maintained close economic cooperation and extensive cultural ties. For Russia, India is the most important trade partner and a priority target region for Russian non-resource exports. Over the past three years, bilateral trade between Russia and India has demonstrated robust growth and development. In the past year alone, it grew by 17% to USD 11 billion. At the same time, Russian exports increased by 20% to USD 7.8 billion. Russian non-oil exports to India include mechanical engineering products, the agro-industrial products, precious stones, metals, metallurgy, chemical products, and timber. At the same time, domestic business is ready to expand the sectoral supply line in IT, pharmaceuticals, biotechnology and food industry etc.

Russian Export Centre (Part of VEB.RF Group) is a national institution for support of non-resource exports in key and promising markets such as India, by providing a wide range of financial and non-financial support measures to Russian exporters and their foreign partners. The REC focuses on improving export conditions and leveling existing barriers in the implementation of foreign economic activity. Russian Agency for Export Credit and Investment Insurance (EXIAR JSC) and ROSEXIMBANK JSC, are the shareholders in REC.

Last year, the REC Group supported USD 200 million worth of Russian exports to India. Certainly, this amount is far below the potential for business cooperation between Russia and India. Therefore, REC has been developing and implementing new formats for promoting Russian goods and services on the Indian market. In February 2019, a significant step was taken with the establishment of Russian-Indian forum of small and medium-sized businesses. The forum was launched by Denis Manturov, Minister of Industry and Trade of the Russian Federation and Suresh Prabhu, Minister of Trade, Industry and Civil Aviation of India. About 80 Russian companies, ready to act as reliable and experienced partners for implementing projects in India, and about 300 Indian companies participated in the discussion on strengthening cooperation. More than 200 B2B meetings were held, and bilateral agreements were signed.

Also Read: India-Russia Special and Privileged Strategic Partners

Recognising the potential of the Indian market, a bureau of Russian Export Centre has been established in Mumbai. The bureau provides a full range of support services to Russian companies for smooth on-boarding in India. It helps the companies from finding reliable partners in India, to advising them on various aspects of doing business (from customs clearance to protecting intellectual property), ensuring their participation in exhibitions and business missions, organising business meetings and negotiations, etc. In addition, it also supports in lending and insurance of Russian-Indian export transactions. With the direct participation of the Bureau, it has been possible to sign a number of commercial contracts like contracts for the supply of hovercraft, food and wood products. In addition, projects related to financing the supply of secure storage systems are also being developed. In order to expand Russian-Indian business contacts, REC organises B2B tele-bridges.

Russian companies get the opportunity to discuss the prospects for business cooperation directly with their Indian colleagues. Already more than 200 companies from the two countries have taken part in such teleconference bridges, which focus on presentation of domestic products and services in various sectors, interaction in the field of data protection, bidding on electronic trading floors in India, logistics, tourism, and provisioning for financial and non-financial instruments for export support.

In order to further expand cooperation between Russian and foreign companies, REC also facilitate interactions with foreign companies; imparts specific market knowledge; and helps in marketing outreach. To date, 57 such agreements have been concluded, and 14 companies plan to operate in India.

Going forward, agreement on a free trade zone will be an important driver for strengthening the Russian- Indian trade and economic partnership. Due to the emphasis laid out by both the governments an agreement between the EAEU countries and India is in an active stage.

North-South Corridor

The North-South Corridor, having a route length of 7200 km from St. Petersburg to the port of Mumbai, envisages a multi mode transport corridor of ship, rail and road networks, connecting the South and Southeast Asia with Northern and Western Europe through Russia. Development of the corridor opens up great prospects for bilateral business and economic cooperation.

According to preliminary estimates, the throughput of the corridor is 1.4 million passengers and up to 7-8 million tonnes of cargo per year. The North-South international transport corridor is one of the largest transports and logistics projects currently being implemented in the Caspian region. It is designed to transport goods from India and the Persian Gulf states to Northern and Western Europe through the Caspian countries. For the sake of comparison, the transportation of goods from Mumbai to St. Petersburg through the Suez Canal around Europe takes about 30 days, covering a distance of 14,500 km, whereas through the North-South corridor, it takes only 14 days.

With a 50 percent reduction in travel distance and time, the economic efficiencies of the corridor could not be more emphasised. Some of the priority issues in implementing this corridor include customs tariffs alignment between participating countries, creation of a joint company and determination of corridor manager in each country.

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