Prime minister of the Russian Federation, who reached New Delhi on an official trip to India on Tuesday morning, said that the level of trade between Russia and India is likely to touch $10 billion by 2010.

He was speaking at the Second India-Russia Forum on Trade and Investment, organised by the Confederation of Indian Industry and Federation of Indian Chamber of Commerce and Industry.

"The two countries should work closely to achieve the target of $10 billion bilateral trade by 2010. The two sides need to look at new areas of co-operation. Russia can become India's most important economic ally, if the two sides engage seriously with each other," he said.

He pointed out how the businessmen in India and Russia were working tirelessly to reach the target and how work is on in the field of oil, gas, mining and machinery industries.

Speaking on behalf of India Kamal Nath, Minister for Industries and Commerce, said that the business ties between the two nations were running below potential.

"We should address the issues of high transportation costs and inadequate exchanges between Indian and Russian businessmen to boost our trade volume. The north-south corridor provides the shortest link between India and Russia, through Iran and the Caspian Sea. The corridor could help reduce costs by nearly one-third. The diversification of high-value trade items could offset the transportation cost disadvantage," Nath said.

The minister also said that India would like to revive tea export and Indian banking sector can strengthen the Russian financial sector.