Institutional mechanism, key driver for trade with Russia: FICCI

New Delhi, Jan 21 (UNI) With a view to doubling bilateral trade between India and Russia to five billion dollars in the next five year, there is a need to set up institutional mechanism for clearing financing problems faced by exporters.

Industry body FICCI has suggested a three-pronged strategy for giving a fillip to the bilateral trade and investment, as the trade turnover in 2005-06 stood at 2.72 billion dollars.

The strategy involves establishing an institutional mechanism to examine and sort out the financing problems faced by exporters, using the unutilised money in the rupee-rouble debt agreement to fund investments in India and leveraging it to attract greater Russian participation and greater interface between Russian and Indian companies to facilitate the flow of information on the business opportunities available in the two countries.

The sectors where India can attract investments from Russia include metallurgy (steel, aluminum), real estate, pharmaceuticals, power, infrastructure (metro projects in different Indian cities) and ports.

Likewise, the sectors that look promising for investments in Russia include pharmaceuticals, tea and tobacco.

Feedback received by the chamber from companies doing business with Russia reveals that certain areas need to be addressed urgently to boost the two way trade and investment cooperation, such as reducing credit risk, strengthening Russia's banking sector, liberalising currency transactions, streamlining tax policy, utilisation of rupee debt for investments in India.

Entry of more Indian banks in the Russian market will therefore be of immense help and would give a big boost to the Indo-Russian business and economic relations, the industry body said.

Further, steps should also be taken to invite Russian banks to set up operations In India. Indian companies have mentioned that in the absence of a proper financial network spanning the two countries transfer of funds takes a long time.

UNI