Putin’s Visit: India seeks greater cooperation in diamond, pharma and tourism

Leading a high-powered Russian delegation, Putin will arrive in New Delhi on his official visit in late evening on December 23. Source: ITAR-TASS

Leading a high-powered Russian delegation, Putin will arrive in New Delhi on his official visit in late evening on December 23. Source: ITAR-TASS

Despite global economic difficulties, bilateral trade is expected to touch $12 billion by the end of this year.

Ahead of the Russian President Vladimir Putin’s visit to New Delhi, for his summit talks with Prime Minister Dr Manmohan Singh, Indian ambassador to Moscow, Ajai Malhotra said the relations between the two countries were never so close as they are today.

“The relations between India and Russia are very friendly,” Malhotra said, referring to Putin’s coming visit to India. “Whether it is on the government level or on the people to people contact level, the overall relations are extremely good. On political level, the mutual relations are the best, so far,” he said.

“The leaderships of the two countries, have huge amount of goodwill to continuously strengthen this traditional, time-tested friendship between India and Russia, which has developed into a ‘special, privileged strategic partnership,’” he added.

“Our present ‘special, privileged strategic partnership’ is the fruit of efforts by earlier generations to nurture our unique ties. The progress of our economies in recent years has opened new vistas for cooperation, which will undoubtedly further intensify,” Malhotra noted.

Leading a high-powered Russian delegation, Putin will arrive in New Delhi on his official visit in late evening on December 23. The summit level talks between the two sides, in restricted and expanded formats, will be held on December 24.

Russian sources expressed optimism here that during the talks, Putin and Dr Singh will discuss and take specific steps in order to further develop the Indo- Russian strategic partnership in trade, economic, energy, and cultural and humanitarian spheres.

At the same time, they also expressed some concern at the reports by media outlets in both the countries, which have been disproportionately focusing in the past months over a few disputes, especially in the fields of defence, telecommunications and nuclear energy.

“In  a way, they have hijacked the good work done and splendid success achieved in many other areas of bilateral cooperation, such as, in the field of  diamond trade, pharmaceuticals and tourism, which have gone a long way forward  in raising the level of  trade and economic cooperation,” they said. “The successful cooperation in these areas which does not get desired coverage in media, has really added a feather in the overall achievement of bilateral trade and economic cooperation, but has remained overshadowed by few disputes, in defence, nuclear energy and telecommunications.”

India and Russia have decided to achieve a target of $20 billion in bilateral trade by 2015. With this purpose, the two countries seek greater cooperation especially in the spheres of diamond, pharmaceuticals and tourism.

Despite global economic difficulties, the bilateral trade has registered an impressive growth of 30 percent during January–September 2012, compared to January–September 2011. It is expected to reach about $12 billion by the end of the year, compared to about $9 billion in 2011.

According to an estimate, India-Russia cooperation in diamond trade is likely to contribute about $1 billion in the bilateral trade turnover, and in view of the growing “diamond ties,” this share is expected to substantially increase in the near future.

The diamond trade between the two countries got a new thrust last March when the Russian state monopoly Alrosa signed five agreements with Indian companies to supply diamonds worth about $1 billion. The long-pending deals on bilateral diamond trade were a part of a new strategy to transform bilateral economic ties with India that have not matched the level of political ties and strategic partnership.

Alrosa, which produces about a quarter of the world’s rough diamonds, plans to supply about $1 billion worth of rough diamonds to India this year. It signed three agreements with Diamond India Ltd and another two deals were signed with private companies, Ratilal Becharlal & Sons and Rosy Blue. The three companies are expected to buy diamonds from Alrosa worth a total $490 million over the next three years.

Recently major companies in the Russian jewellery industry have also started taking interests with Indian products and designs and see tremendous trade potential in cooperation with their Indian counterparts.

The second India-Russia Jewellery Summit to increase bilateral trade was held in Mumbai in October.  Fifteen jewellery manufacturers from India and 13 Russian jewellery companies participated in the summit. The first Indo-Russian Jewellery Summit was organised in a year ago followed by the Diamond summit held earlier in 2012. Both events had a good impact on India's trade cooperation with Russia. Since 2009, when jewellery exports to Russia stood at only $3.13million, the exports to Russia increased to $8.2 million in 2011.

In the pharmaceuticals sector too, India has emerged as one of the most reliable suppliers of quality generic drugs to Russia and potential for enhanced exports is promising. India’s major pharmaceutical companies are represented in Russia with many actively exploring the possibility of setting up joint ventures.

During his visit to St Petersburg in June, Union Commerce Minister Anand Sharma urged Russia to let Indian pharmaceutical companies form joint partnerships with Russian companies. India has also asked the Russian side to establish a nodal agency to create joint committee for the implementation of the MoU between Indian and Russian pharma companies. India has already nominated its nodal agency, the National Institute of Pharmaceutical Education and Research (NIPER), under the Department of Pharmaceuticals. Russia has not so far nominated an appropriate nodal agency.

Under the Pharma 2020 programme of the Russian Government which aims at developing domestic production base, leading Indian Pharmaceutical companies have started engaging with Russian partners to consider possibilities of joint investments.  Several B2B agreements were concluded during 2011 in this regard.  During the annual summit 2011, MoU between the Central Drug Standard Control Organisation of India and the Federal Service on Surveillance in Healthcare and Social Development of the Russian Federation on assurance of quality, safety and efficacy of medicines was signed for facilitating future cooperation in this sector.

Earlier this month, Indian ambassador Malhotra opened “India Pavilion” in APTEKA 2012 at Pavilion 3 of the EXPOCENTRE in Moscow in which 21 Indian pharmaceutical companies took part. He also inaugurated a Buyer Seller Meet at the same venue, in which 44 Indian pharmaceutical companies participated. Both events were organized under the auspices of Pharmaexcil, India, with the support Indian embassy.

Indian exports of pharmaceutical products to Russia amounted to $722.2 million in 2011 and increased by 16 percent over 2010. In 2011, India ranked third amongst exporters of pharmaceuticals to Russia. Russia is the second largest destination worldwide of Indian pharmaceutical products.

Recently, Sharma in his talks with Russian counterparts has repeatedly apprised the Russians on the desirability of cooperation in the test and analytical facilities in Russia to certify standards to enable access to Indian pharmaceutical products to Russia as also fast track registration of Indian pharmaceutical products within three months. 

India and Russia have realised, although belatedly, that in order to boost the bilateral trade, people to people contacts are very necessary. In this connection, India has recently taken some concrete steps to increase the flow of Russian tourists to India.

Russian tourist and business peoples’ arrivals into India both increased by 25 percent in 2011-12 compared to 2010-11. “They continue to grow at the same healthy pace in 2012,” Malhotra said, adding “This enhanced interaction has positive implications not only for people to people contacts but also bilateral trade flows.”

Last March, Malhotra, inaugurated the “India Pavilion” at the 19th International Travel & Tourism Exhibition (MITT) in Moscow. Twenty seven Indian travel, tour, hotel and spa companies participated in MITT.

India has already lifted the restriction of a two month gap on re-entry of foreign nationals coming to India, with the exceptions of some counties. The provision relating to a gap of at least two months between two visits of a foreign national to India on a tourist visa would no longer apply to Russian nationals. Indian embassy on June 11, 2011, had liberalised the visa regime for Russian tourists visiting India. Russia had reciprocated with a more liberal visa regime for Indian citizens effective December 1, 2011.

 “It would further enable growing people to people contacts between India and Russia and positively impact the bilateral trade cooperation through the flow of tourists from Russia to India, which is already growing at 20 percent in 2012,” Malhotra said.

Dadan Upadhyay is an Indian journalist based in Moscow.

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