India Russia business dialogue
External Affairs Minister S. Jaishankar and Russian Deputy Prime Minister Denis Manturov attended the “India-Russia Business Dialogue” 2023’s inaugural session on April 17 in New Delhi.
- Context
Even though Moscow is facing crippling economic sanctions as a result of its conflict with Ukraine, Russia is planning to sign a free trade agreement (FTA) and an investment agreement with India in order to strengthen business and economic ties between the two nations. This is due to the two countries’ booming oil trade.
Denis Manturov, Russia’s deputy prime minister and minister of industry and trade, spoke to the Indian business on Monday alongside External Affairs Minister S. Jaishankar and claimed that Western sanctions have caused “systematic problems” in international markets.
“We are eager to step up negotiations on the Free Trade Agreement with India with the Eurasian Economic Commission. We are also working to finalise the bilateral agreement between Russia and India for the promotion and protection of investments. I have no doubt that Russian and Indian businessmen would demand trade favours and measures that ensure the protection of investments,” he said on Monday.
Manturov co-chaired the Intergovernmental Russian-Indian committee on commercial, economic, scientific, technical, and cultural cooperation while on a two-day visit to India.
According to sources, Manturov also met with National Security Advisor Ajit Doval and discussed a number of bilateral matters pertaining to the implementation of the strategic cooperation between India and Russia.
Jaishankar claims that New Delhi is in “advance agreement” to establish an FTA with Russia and is also looking into a variety of products that can be marketed to Russia and other major Eurasian markets in huge quantities.
Russia is India’s top seller of weapons, and after the Ukraine War, it has also become India’s top crude oil exporter.
We must identify a market for the goods that India can replace. We require the same level of widespread collaboration on civil projects as there was prior to the sanctions, Manturov told reporters outside the business gathering.
Manturov claims that “cluster investment platform” facilities will be made available to Indian investors who are eager to invest in large-scale infrastructure projects in Russia. These facilities include preferential credits for designing and manufacturing of priority products, subsidies for pilot batches of goods, insurance premium discounts, and income tax preferences.
We will rely on reliable international partners, he added during the intergovernmental consultations. We shall work hard to strengthen our bonds of collaboration. To share knowledge and expertise in the most innovative technology fields.
The Russian side emphasised the widespread use of national currencies, particularly with friendly nations, to conduct international trade and eliminate the need for the US dollar.
“Within the framework of the intergovernmental dialogue, we propose to consider the possibility of widespread use of national currencies and currencies of friendly countries,” Manturov added. “This will allow the minimization of expenses and currency risks,” he added.
“One of the most crucial jobs, in our opinion, is the development of the transport and logistics infrastructure. In particular, he suggested that India might emerge as one of the most important collaborators in the process of creating the International North-South Transport Corridor.
The Russian Deputy PM said that both parties should consider boosting aviation connection to allow for more frequent travel and business between the two nations.
In the meantime, Russian airline Aeroflot plans to boost its flights to India, according to Sergey Cheremin, Minister of Department of Foreign Economic Activity and International Relations, Moscow City Government, who is a member of the team led by Manturov.
- Key Points
- At the India-Russia Business Dialogue 2023 in New Delhi, representatives of Indian and Russian businesses gathered.
- The Inter-Governmental Commission (IGC), among other practical cooperation initiatives between Russia and India, were considered at the event.
Indian External Affairs Minister S.
- Jaishankar declared that India and Russia had already reached their $30 billion bilateral trade goal before the target year of 2025.
- There was discussion of connectivity projects including the Eastern Maritime Corridor (Chennai-Vladivostok Corridor) and the International North-South Transport Corridor.
- Clear payment arrangements must be made, and the Special Rupee Vostro Account System network growth under the settlement of international trade in Indian Rupees was specified.
- A specific focus is being placed on the reciprocal access of products to the markets of both nations.
- The Eurasian Economic Commission and Russia are working to move the free trade talks with India along.
- India – Russia Business Relationship: History
India and Russia have had a long-standing relationship since the Soviet era, which started in the early 1950s. The two countries have historically enjoyed close political, military, and economic ties. Here are some key highlights of India-Russia business relationship history:
Soviet-era trade: During the Cold War, the Soviet Union was one of India’s major trading partners. India imported Soviet-made machinery, equipment, and defense hardware. In return, India exported raw materials like tea, jute, and cotton.
Defense ties: India and Russia have been close allies in the defense sector for several decades. Russia has been a major supplier of military hardware to India, including fighter jets, submarines, tanks, and missiles.
Bilateral trade: Bilateral trade between India and Russia has been steadily growing since the 1990s, when India started liberalizing its economy. In 2019, the total bilateral trade between the two countries was around $11 billion.
Energy cooperation: Russia is a major supplier of oil and gas to India. In 2018, India and Russia signed an agreement to build a liquefied natural gas (LNG) pipeline from Russia to India.
Space cooperation: India and Russia have collaborated in the field of space exploration. In 2019, India and Russia signed an agreement to jointly develop a lunar lander for India’s second moon mission.
Joint ventures: India and Russia have established several joint ventures in sectors such as pharmaceuticals, information technology, and engineering.
Overall, the India-Russia business relationship has been characterized by a strong focus on defense cooperation, with other sectors gradually gaining importance.
