India, Russia should diversify trade basket by going beyond traditional sectors: Shringla

Moscow: India and Russia should diversify their trade basket and economic exchanges by going beyond the traditional sectors and cooperating in new areas like railways, transport and logistics, pharmaceuticals, minerals and steel that will add momentum to the bilateral ties, Foreign Secretary Harsh Vardhan Shringla has said.

Addressing a meeting hosted by the Diplomatic Academy of Russian Ministry of Foreign Affairs on Wednesday, Shringla said India-Russia trade, amounting to $10.11 billion in FY 2019-2020, is far below the potential.

"Last year there was a slump but we are finding ways of reviving it. Both countries have set the bilateral trade target at $30 billion by 2025," he said.

One of the steps taken to enhance trade is the commencement of negotiations in August 2020 for the India- Eurasian Economic Union (EAEU) Free Trade Agreement, he said.

The operationalisation of a "Green Corridor and a Bilateral Investment Protection Arrangement are likely to encourage bilateral trade and investment, respectively, Shringla underlined.

Use of national currencies in bilateral trade settlements will also reduce cost and time as well as risk of held-up payments, he said.

Pointing that the oil and gas sector has been a flagship sector of commercial cooperation, he said the two countries have been looking out for ways to diversify economic exchanges going beyond the traditional areas.

He said India is looking at investment in new areas such as coking coal, timber, LNG as there is a huge potential there.

"We have already started a shipping line between Vladivostok and Chennai. We are looking at a significant trade route which was never there, a new route between our two countries."

Stressing that Indian companies have significantly invested in Russia, he said India's investment in the Sakhalin-1 project was one of India's earliest public sector investments abroad.

Till date, Indian oil and gas companies have acquired stakes in five Russian companies/projects at a value of about $15 billion. Rosneft was the leader of a consortium of investors that, in 2017, acquired a 98 per cent stake in India's Essar Oil at a cost of $12.9 billion.

He said India is seriously into the process of privatising many of its oil majors and some are having very serious discussions with Russian companies to see if some of these stakes can be acquired by Russian

companies.