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October 5, 2000
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Russia keen to strengthen trade ties with India

Our Correspondent in Bombay

"We want Indian businessmen to invest and expand their operations in Russia," asserted Russian President Vladimir Putin during his address to the business heads of the Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry on Thursday morning.

Russian President Vladimir Putin with Indian Finance Minister Yashwant Sinha -- Photograph: Jewella MirandaPutin was addressing the meet, jointly organised by CII and FICCI to boost the Indo-Russian trade. Finance Minister Yashwant Sinha chaired the meeting.

"The relationship between India and Russia has always been good in spite of the upheaval that took place in our country. However, our major task now is to boost economic co-operation between Moscow and New Delhi," said Putin.

He said that there was a need to increase the flow of traditional goods from India to Russia and vice versa. "We are ready to buy Indian goods which are cheap and of good quality. These goods are appreciated all over Russia. But I must mention that Russians buy Indian goods more today than they used to do during the Soviet era."

He expressed concern over the dumping of goods and said that an investigation should be carried out by mutual consent to curb the activity. "We need as many favourable conditions as possible for bilateral trade," he added.

Soon after Putin's speech, CII president, Arun Bharat Ram said that in 1999, the Indo-Russian bilateral trade was of the order of $1.57 billion. This, however, can reach $5 billion by 2002, he opined.

The CII president identified six sectors where India could play a major role in Russia: pharmaceuticals, infotech, finance, automobiles, aviation, and energy and engineering businesses.

"We have also planned to set up an office in Moscow to improve bilateral trade," Bharat Ram informed the visiting Russian delegation.

Speaking on the occasion, FICCI president G P Goenka said: "Even Mahatma Gandhi was inspired by the Russian writer Leo Tolstoy and named his farm 'Tolstoy Ashram'."

He pointed out that FICCI was focussing on information technology, hydrocarbons, metallurgy, mining, biotechnology and dollar trade with Russia.

After hearing the questions from the business delegates, Putin told the gathering that Russia has succeeded in attaining stability during the last two years. "We achieved a GDP growth of 7 per cent last year and our inflation rate is under control. Gold and foreign currency reserves have shown improvement, too. On the agricultural front, the harvest has been good this time. This will further stabilise our economy."

He expressed concern over tax exemptions and customs duty, and said that Russia needs considerable improvement in that area. "We are trying to have a unified tax rate by January 2001 This will be a major step towards liberalisation of our economy. And I hope that Indian businessmen will take advantage of this."

He said that Russia plans to move 'step-by-step' towards improvement of its financial markets.

Earlier, Finance Minister Yashwant Sinha said: "The bond between India and Russia is so strong that no force has been able to weaken it."

Sinha stressed that there was a need to have a strong economic relationship between India and Russia, besides on the political and defence fronts. "In the nineties, we could not fully exploit our relationship to strengthen our friendship further. But during this decade we can achieve it."

"Gone are the days when the government could direct industries. In fact, today the private sector and market forces play a vital role in the functioning of the economy," he added.


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