India, Russia to boost bilateral trade, diversify co-operation

Russia and India will increase bilateral trade to $10 billion by 2010 from an expected $7 billion this financial year (April-March 2008-09). The two countries will also diversify cooperation, Russian deputy prime minister Alexander Zhukov said on Wednesday.

''We are not only aiming to boost the figures measuring cooperation, raising trade to $10 billion by 2010, but we also want our cooperation to reach a modern level, by expanding investment and science and research ties," Zhukov told the bilateral commission on trade ahead of the visit of Russian president Dimitry Medvedev to India.

Trade between the two countries grew 54.7 per cent year-on-year to $4.7 billion in January-September 2008, with Russian exports growing 62.6 per cent to $3.5 billion and Indian exports by 36.5v per cent to $1.2 billion,  Zhukov said.

India imports power plants and other equipment, fertilisers, chemical products, copper, nickel, plastic goods from Russia while Russia buys mainly machinery and pharmaceutical goods from India.

Major Indian investments in Russia are directed mainly at the oil and gas industry, banking and information technology – which totalled $820 million in the first half of this year, while Russian investments were in the telecom sector where AFK Sistema has planned to invest $5-7 billion in launching a mobile communications network in India.

The two countries are also jointly setting up a $105 billion antibiotics project with Russia holding a 55 per cent stake and India holding the remaining. The Russian stake will come from the rupee debt India owed the former Soviet Union.

The joint venture is expected to address at least in part, the quality issues with Indian drugs, according to Russian officials. Russia currently imports drugs from India, which account for 4.1 per cent of its market, he added.

The visiting Russian president Medvedev is expected to sign a series of agreements, including nuclear cooperation agreement with India.

Russia will help build another four reactors at Kudankulam nuclear power plant in Tamil Nadu, where it has already built two.

In the wake of the recent terror attacks in Mumbai, the two countries intent to step up cooperation to fight terrorism, Zhukov said.

Medvedev, who begins his three-day visit today, is the first foreign head of state to visit the country after the terror strikes in Mumbai.