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Shri Kamal Nath, Union Minister of Commerce & Industry, has proposed the setting up of a Joint Study Group on a possible Comprehensive Economic Cooperation Agreement between India and the Russian Federation with a view to enhancing bilateral trade and economic relations. The Deputy Prime Minister of Russia, Mr. Alexander D Zhukov, welcomed the proposal mooted by Shri Kamal Nath during an hour-long meeting with the Russian delegation here last evening and said that such an expert Group would impart a fresh impetus to trade between India and Russia. Recalling the strong trade ties that India traditionally had with Russia, Shri Kamal Nath called for substantive steps to reverse the declining trend in the volume of trade between the two countries and urged Russia to step up its imports of tea, tobacco and manufactured goods from India. Mr. Zhukov suggested the establishment of joint ventures in Russia based on tobacco sourced from India. Shri S.N. Menon, Commerce Secretary, was present at the meeting along with Shri Kawal Sibal, India’s Ambassador to Russia and other senior officials.
Mr. Zhukov, who is in India ahead of the forthcoming visit of President Putin, said that Russia hoped to become a member of the World Trade Organisation (WTO) by 2005 and would be keen to cooperate with India in the WTO.
During the discussions, Shri Kamal Nath flagged the issues relating to the high duty differential on import of bulk and packaged tea which discouraged export of quality package tea to Russia and the grant of Geographical Indication (GI) status for Darjeeling tea. The differential duty structure was meant to be temporary and hence, India has been seeking its revocation. The issue of GI for Darjeeling tea is being pursued with the Russian side during the ongoing negotiations for their accession to the WTO. Shri Kamal Nath conveyed India’s concern over dwindling tobacco exports to Russia, especially since Russia had traditionally been the single largest overseas market for Indian tobacco.
The potential for cooperation in diamonds was also discussed as India is the largest processing centre for rough diamonds, while Russia is one of the world’s largest producers of rough diamonds.
The Russian side expressed concern over anti-dumping investigations in India against certain goods of Russian origin and requested recognition of market economy status for Russia for anti-dumping purposes. Shri Kamla Nath allayed the apprehension expressed by Mr. Zhukov by pointing out that no anti-dumping investigations had been initiated involving Russia by the Directorate General of Anti-Dumping (DGAD) since November 2003 and hence, the concern on this account was not based on any specific decision of the DGAD.
India’s exports to Russia amounted to US $ 708.68 million in the year 2003-2004, showing a decline of 0.66 % compared to 2002-2003, while imports from Russia stood at US $ 959.51 million.
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