India and Russia Signs Protocol on Trade and Investment
The Fourth India-Russia Forum on Trade & Investment was organized by the Ministry of Commerce & Industry and Ministry of Economic Development of the Russian Federation, held here today. Mr. Sergei Ivanov, Deputy Prime Minister of the Russian Federation, and Shri Anand Sharma, Minister of Commerce & Industry of India, participated in the meeting of the Forum.
During the Forum, the following was agreed and a Protocol was signed by Shri R.P. Singh, Secretary, Department of Industrial Policy & Promotion, Ministry of Commerce and Industry and Mr. S.S. Voskresensky, Deputy Minister of Economic Development, Russian Federation.
1. Both sides expressed satisfaction at the growth of bilateral trade and investments while recognizing that the level of economic relations still remained modest compared to the sizes of the two economies and their potential. In this context, both Sides noted the positive contribution of the Forum in strengthening bilateral economic engagement through establishment of direct B2B contacts.
2. Both sides agreed that enhancement of bilateral investment and trade cooperation is one of the main ways to widen the ambit of and further strengthen the strategic partnership between India and Russia.
3. Both sides noted with satisfaction the signing during the Forum of agreements between Russian and Indian companies in different sectors.
4. Both sides also welcomed the decisions taken during the 16th session of the IRIGC-TEC held in New Delhi on 18 November 2010.
5. During the Forum, presentations on bilateral investment opportunities and prospects for cooperation in the IT sector as well as sectoral business round tables were organized. Salient points of the discussions are given below.
Chemicals and Fertilizers
6. Both sides recognized the complementarity between the resources in Russia and the growing demand for fertilizers in India. Both sides also agreed that they must pursue possibility of joint investment in the fertilizers sector in two countries as well as in other resource-rich countries with the possibility of buy-back arrangement. There are sufficient opportunities for the manufacture of nitrogenous fertilizers using natural gas feedstock from Russia. Steps should also be taken for setting up of the joint venture for mining of potash and phosphate and production of phosphatic fertilizers for consumption in India.
7. In line with this Forum’s desire during its last Session, it was noted with satisfaction that an inter-governmental MoU was concluded on cooperation in the mineral, fertilizers sector during the visit of Russian Prime Minister to India in March 2010, and that fertilizer had become one of the largest items of trade between India and Russia.
8. Indian side proposed to the Russian business entities that they should leverage the conducive investment atmosphere in India and invest in the Indian chemical industry. Indian Government is setting up the Petroleum, Chemicals and Petro-Chemicals Investment Regions (PCPIR) in Vishakhapatnam, Dahej in Gujarat and Haldia in West Bengal. Russian companies may consider investing in these regions.
Pharmaceuticals and Life Sciences
9. Both sides expressed satisfaction over the progress made in cooperation in the pharmaceutical sector, called for investment in the joint ventures in two countries and agreed that there exists huge potential for participation by Indian companies in the Pharma 2020 program of the Government of the Russian Federation.
IT & Communication
10. Both sides agreed that there is enormous potential for cooperation in the IT Sector for mutual benefit. The Forum also recognized the need to identify specific projects for collaboration between Indian and Russian companies in areas such as, establishment of techno-parks, BPO, KPO, IT Skills and telemedicine. Both sides also felt that finalization of the framework inter-governmental MoU on Cooperation in the area of IT would lead to increased interaction between the two countries in IT Sector.
11. The Russian side invited Indian companies to participate in the Skolkovo Innovation Center.
12. Both sides expressed satisfaction on increasing cooperation between two countries in the area of telecommunication. Indian Telecom industry is one of the fastest growing in the world and this sector offers consideration potential for investment by Russian companies. Further, there is also scope for Indian companies in Russia in the area of E-governance, since Russia is targeting to provide all State services electronically by 2015. Other potential areas for cooperation include, telemedicine, IT training and education.
13. Both sides noted that India and Russia have been long-standing partners in steel sector and this partnership has yielded excellent results over the period. There is considerable scope for participation in modernization and establishments of steel manufacturing facilities in two countries, which needs to be explored.
14. Indian companies like SAIL and MMTC have expressed interest in procuring coking and thermal coal from Russia. Indian companies can also participate in development of coal projects in Russia to meet the demand for coking coal for India’s increasing steel production.
15. Both sides noted the important role played by Russian companies in setting up industrial units in core sectors in India during the post-Independence era. This was largely in the Government sector. In the current environment, while this process will continue, the private sector in the two countries has to assume a greater key role in promoting industrial cooperation.
16. Both sides expressed satisfaction over conclusion of long-term contracts between Indian and Russian companies for direct trade of rough diamonds. Indian side requested that in view of the potential of the Indian market, signing of such long-term agreements with MMTC Limited, Hindustan Diamond Company Private Limited (HDCPL) and Surat Rough Diamond Sourcing India Limited would greatly promote cooperation in this sector.
17. Both sides emphasized the need for identification of mutually agreed areas of cooperation in the mining sector. It was also proposed that both sides identify respective partner organizations from the two countries and work out a mechanism for contact and information.
18. Both sides outlined the prospects for enhanced cooperation between Indian and Russian companies in the Oil and Gas Sector in the following areas:
(i) upstream – oil and gas field
(ii) downstream – construction of refinery
(iii) joint projects in third countries both in upstream and downstream projects
(iv) participation of Russian companies in such projects in India.
19. Both sides agreed to contribute to cooperation in the trade and investment area at the regional level, especially in the area of energy efficiency, new technologies.
Banking and Finance
20. Both sides urged financial organizations including banks of the two sides to work towards providing banking services to further trade and investment relations between the two countries. Both sides also welcomed the opening of representative office of Gazprombank in India.
Trade & Investment relations
21. Both sides agreed on the need for proactively enhancing the investment climate, as well as furthering mutual trade in accordance with their respective relevant legislations.
22. Indian business representatives in the Forum urged that the proposed agreement on mutual recognition/ equivalence of standards and conformity assessment procedures for facilitating trade of goods especially agriculture and animal products between India and Russia be expedited. They also called for necessary measures to be taken to enable export of meat products from India to Russia including through recognition of the Indian certification mechanism.
23. Both sides intend to continue the useful and regular dialogue, placing special emphasis on the further development of bilateral cooperation on issues regarding modernization.
24. The two sides agreed that strengthening the contacts of businesses between India and Russia is very critical and underlined that all existing mechanisms should be utilized effectively for this purpose. Both sides re-expressed that India Russia CEO Council is an important mechanism available for B2B contract between two countries and it has an important role to play in identifying specific areas of cooperation and impediments faced by the businesses of the two countries.
25. Both sides agreed to expand cooperation to implement the decisions made in this Forum for furthering of bilateral investment & trade relations..
26. Noting the success of “Russia-India Business-dialogue” held within the framework of Saint Petersburg International Economic Forum (SPIEF) 2010, the Russian side invited participation of Indian companies in the 15th session of SPIEF in June 2011.
27. The next meeting of the India-Russia Forum on Trade & Investment would be held in 2011 in Russia on a mutually agreed date.