Ahead of Russian President Vladimir Putin’s visit later in January, Indian industry leaders want a permanent vehicle to discuss and manage non-tariff barriers and developing reliable trade routes is created. The Confederation of Indian Industry (CII) released a book “Deepening India-Russia Trade Relations” in which they argued that the proposed Comprehensive Economic Cooperation Agreement (CECA) will work only if a shorter and more economically viable trade route is worked out.
It specifically complained that the “North-South Corridor” where Indian ships have to use the Suez Canal to enter the Russian port St. Petersburg via Kotka (Finland) and Rotterdam (Netherlands) is long, time consuming, and expensive. Asking for “greater attention from both countries,” the CII asked for shorter route using a combination of sea and land links. Specifically, it suggested the use of Iran to connect ships from Mumbai to Bandar Abbas in Iran and then land or train route it to Astrakhan in Russia that could reduce travel time by 10 days.
Indo-Russia bilateral trade relations has proceeded a lot since the negative growth in the post Cold War 1990-1999 period but has not reached anywhere near its potential. Indian exports to Russia in 2005-06 is valued at USD.74 billon (less than the 1994-95 USD.85 billion). But two way trade last year is valued at USD 2.76 billion which grew by about 41% over the year before. New Delhi and Moscow want to grow the trade to USD 10 billion by 2010 but given present circumstances, that target looks a bit far-fetched.
Apart from energy, where India already has good investments in Russia, CII proposes a stronger platform to encompass research and development in manufacturing to cross-pollinate knowledge and learning on productivity besides achieving cost benefits. For growth in services, CII says that there must be greater recognition of each others’ service sectors that would allow free movement of people, resources, and capital.