India and Russia on Friday adopted a programme for greater economic cooperation that will run till 2030, address the barriers hampering the goods and capital flows and quicken implementation of joint projects including a second collaborative nuclear power unit in India.
The Programme for the Development of Strategic Areas of India – Russia Economic Cooperation till 2030 — will enable the trade between the two countries to be more balanced and diversified. Apart from addressing tariff and non-tariff trade barriers, both sides emphasised on removing bottlenecks in logistics, promoting connectivity, ensuring smooth payment mechanisms, solutions of insurance and reinsurance and regular interaction between the businesses.
MoU signed between Russia’s Uralchem Group and Indian fertiliser companies
An MoU has been signed between Russia’s Uralchem Group and Indian fertiliser companies to set up a 1.8-2 million tonnes urea plant in Russia, a move that will help cut import costs for India.
They also agreed to continue jointly developing systems of bilateral settlements through use of the national currencies in order to ensure the trade goes on uninterrupted. The two nations also pledged to continue their consultations on enabling the interoperability of the national payment systems, financial messaging systems, as well as central bank digital currency platforms.
Putin assures uninterrupted supplies of energy to India
Amid concerns over the US sanctions impeding India’s oil purchases from Russia which has skyrocketed in recent years, Putin assured uninterrupted supplies of energy to India and asserted that remaining units of the Kudankulam Nuclear Power Project would be completed as per schedule. A second nuclear power plant in India with Russian support is on the cards, and the site will be identified expeditiously. Putin also offered to discuss the supply of small modular reactors and floating nuclear plants.
“This comprehensive document gives us a concrete set of objectives to the inter-government commission, the ministries and different agencies to remove barriers to trade and investment,” Putin said after the 23rd India-Russia Summit.
Going by the discussions both sides had in the past two days the target of $ 100 billion bilateral trade can be achieved before 2030, Prime Minister Narendra Modi said.
More than two dozen Indian banks have opened Special Rupee Vostro Accounts (SVRO) to enable trade in local currencies. The use of national currencies is already 96% in commercial deals, Putin said, adding that the growth of Russia India commercial links will be helped by the creation of the free trade zone between India and Eurasian Economic Union (EAEU). The first round of FTA negotiations between India and EAEU – which also includes Armenia, Belarus, Kazakhstan, Kyrgyzstan – concluded recently
“During this visit both sides also underscored the importance of expediting the discussions and negotiations on the Bilateral Investment Treaty (BIT). This will help energise investment in both directions,” foreign secretary Vikram Misri said.
To enable India to export more, Russia has expanded the list of Indian companies that can export marine and dairy products to India. For trade facilitation protocol between the Central Board of Indirect taxes and Customs (CBIC) and the Federal Customs Service of Russia for exchange of pre-arrival information in respect of goods and vehicles moved between the two countries.
In terms of investments, Putin said there will be a large India-Russia pharmaceutical factory to be built in Russia using Indian technology. Russian enterprises will be establishing the production of industrial products in the framework of Make in India.
In a move that could enhance services trade, an agreement was also signed on temporary Labour Activity of Citizens of one State in the Territory of the other State. India also announced a 30-day visa for tourists – individually or in groups – without payment of any visa fee.
Discussions were also held on connectivity projects including the international North South transport corridor, the Eastern maritime corridor that is the Chennai-Vladivostok link and also cooperation along the northern sea route.
Of the total Russia-India trade of $ 68.7 billion, India’s exports are just $ 4.8 billion and imports are $ 63.8 billion leading to a trade deficit of $ 59 billion. Of imports from Russia, $ 56.8 billion is aon account of oil purchases.
