Addressing a meeting hosted by the Diplomatic Academy of Russian Ministry of Foreign Affairs on Wednesday, Shringla said India-Russia trade, amounting to USD 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 USD 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 USD 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 USD 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.
“We are looking at long-term arrangements for the supply of coking coal from Russia for Indian steel plants. An India Energy Centre will be opened in Moscow next month,” he said.
Underlining that it is important to diversify and expand the India-Russia trade basket, he said, there is interest in taking forward cooperation in railways, transport and logistics, civilian ship building and repair, inland waterways, pharmaceuticals and medical devices, minerals, steel, chemicals, including petrochemicals, ceramics, agro-industry, timber, high technology and scientific research.
Indian companies are actively exploring investments in Russia in energy, minerals, infrastructure and healthcare, he said.
“As diplomats we should not be looking at what is traditional but try to do which is new, which adds momentum to the relationship,” he said.
The year 2020 marked the 20th anniversary of the establishment of the India-Russia Strategic Partnership and the 10th anniversary of its elevation to a Special and Privileged Strategic Partnership.
“As described by Foreign Minister Sergey Lavrov recently, the India-Russia relationship is truly very close, very strategic, very special, and very privileged,” he said.
He said the long-term convergence of interests, sensitivity to each other’s core concerns, mutual respect and trust shared by Prime Minister Narendra Modi and President Vladimir Putin and growing people-to-people contacts are key drivers of the bilateral partnership.
He said defence, energy, space and civil nuclear cooperation have been its traditional pillars. In terms of security and defence ties, he said, India and Russia have strong military and military-technical cooperation.
He said the two countries are cooperating in manufacture of the “BrahMos” missile system and licensed production in India of SU-30 aircraft and T-90 tanks are standout examples of India’s cooperation with Russia. “We also plan to begin the manufacturing of AK-203 rifles, through an India-Russia joint venture in India, involving full technology transfer,” he said.
Acknowledging that the COVID-19 pandemic revealed several choke-points and vulnerabilities in global supply chains, he said this has allowed India and Russia to analyse where they can stand together to overcome over-dependence and over-reliance on certain economies.
He said India and Russia have prioritised the International North-South Transport Corridor and the Eastern Maritime (Chennai-Vladivostok) Corridor as alternatives to the limited and expensive traditional routes.
“We are also exploring trilateral contact with partner countries like Japan and the first Track-II Dialogue on ‘India-Japan-Russia Cooperation in the Russian Far East’ was held In January 2021 in the virtual format. It has identified potential areas for trilateral cooperation,” he said.
He underlined that cooperation on the peaceful uses of nuclear energy is an important aspect of the strategic partnership, and the Kudankulam Nuclear Power Project (KKNPP) is a cherished joint project.
“We have agreed to commission 12 Russian-designed nuclear reactors in India in the coming years,” he said.