Translated material
Brothers in GDP
Russia and India are trying to increase each other's economic growth rates
If two states at the stage of rapid economic growth join forces, the potential of each of them will increase significantly. India's GDP is approaching a trillion dollars, and Russia's has already reached this mark. It is rapid economic growth that explains the increased activity in Russian-Indian relations recently. “This will give a synergistic effect,” Indian Minister of Trade and Industry Kamal Nath repeated several times in a row yesterday at the opening of the first Indian-Russian forum on trade and investment.Three weeks ago, during his visit to India, Russian President Vladimir Putin set the goal of increasing mutual trade turnover from the current $3.8 billion to $10 billion by 2010. And double it by 2015. Yesterday, Minister of Economic Development and Trade German Gref called these plans the first stage. “We must increase not just exports , but our commercial presence (in the Indian market - Ed. ),” he told reporters.
On the one hand, the presence at the forum of representatives of 200 Russian and 300 Indian companies clearly demonstrates mutual interest. On the other hand, the implementation of large-scale joint projects is associated with great difficulties. “We lack information about each other, we lack trust,” admitted Mr. Gref, “but the main problem is bureaucracy.” Thus, only two Russian state-owned banks are allowed into India - VEB and VTB. The rest were unable to overcome the Indian government's "permitting order." Today, German Gref, during negotiations with his Indian colleagues, will try to ensure that at least two more Russian banks can gain access to the Indian market.
The largest projects are expected to be implemented in the fuel and energy complex. Gazprom offers Indian companies as many as eight projects for implementation in Russia, India and third countries. But the details have not yet been disclosed. Businessmen fear that the deal may fall through.
In addition, negotiations are underway to develop the electricity sector , including nuclear, coal, mining, pharmaceuticals and projects in the field of precious metals processing. The total potential of investment projects in the two countries, according to Mr. Gref, is more than $3 billion. In turn, Indian Minister of Commerce Kamal Nath said that more than 70% of investments in India bring profit, and 15% give a world record profit indicators.
Nevertheless, the Indian side is so far much more active than the Russian side in investment activities. At the end of 2006, the volume of accumulated Indian investments amounted to $2.7 billion, that is, 2.2% of the total volume of foreign investments in Russia. And Russian investments in India amount to only $142 million. True, their growth last year was 22%. During this year, forum participants expect, there should be a qualitative leap. In part, it will happen through agreements to transfer the rupee debt inherited from the USSR into investments. Now, German Gref said, the conclusion of agreements on two projects is approaching - one is related to the production of titanium, the other with the aviation industry.
The parties also do not forget about the need to develop trade. According to Mr. Gref, a comprehensive trade agreement for 2008 should be signed. So far, almost half of Russian exports to India come from machinery and equipment, and another 17% from ferrous metallurgy. The main Indian export (37%) is the pharmaceutical industry. But, as the parties expect, increased trade should lead to a significant expansion of this list.