India exploring possibility of inking FTA with Russia
Financial Express | Saturday, November 11, 2006
India exploring possibility of inking FTA with Russia
ARUN S
• Concerned over the dip in exports to Russia, the govt wants to expand India’s trade
• It has already held one round of discussions with Russian officials in Moscow
• Another round of bilateral talks will take place this month or early next month
NEW DELHI, NOV 10: With bright chances of Russia becoming a member of the WTO, India has begun preparations to explore the possibility of increasing economic cooperation with the country, leading to a free trade agreement (FTA).
The government has been concerned over the dip in Indian exports to Russia and is now planning to take steps to help expand the trade basket. Indian officials have already held one round of discussions with their Russian counterparts in Moscow. Another round of talks, led by commerce secretary G K Pillai, will take place this month or early next month.
To add more value to existing 10-12 export items, a market research and promotion study would soon be done, sources said, adding, the government was trying to find out reasons for low penetration of Indian services in sectors like IT and health in the Russian markets.
The government has also decided to give more focus to gems and jewellery, food-processing, auto-components, nanotechnology and biotechnology. It is making efforts to promote the North-South corridor, which passes through the Iranian port of Bander Abbas. Currently, not many exporters are using this faster route. Officials said an increase in trade with Russia through this route would help the Indian products to make inroads into Central Asian, Western European and Chinese markets.
In 2005-06, Indo-Russian trade had showed a 41% growth to touch $2.75 billion. Of this, imports from Russia were at $2 billion (minus defence imports) while exports to Russia accounted for just $733 million. Fertilisers, steel and iron constituted the majority of India’s imports, whereas spices and pharmaceuticals formed most of the exports.
RIS DG Nagesh Kumar said, “Ultimately it is imperative to sign a comprehensive economic partnership agreement (Ceca) with Russia as the potential great. A joint study group has to first sort out the issues regarding inking a Ceca.”
CII’s international trade policy head TS Vishwanath said, “Last year, there was a negative export growth to Russia. Many Indian exporters have the issue of lack of transparency regarding barriers in terms of customs.”
