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INDIA and Russia have agreed on the ‘broad parameters’ for using Russia’s long-standing debt to India to finance investments in the country. Specific joint venture projects to be financed by the $1 billion worth of debt money will be identified later.

Addressing a press conference on the conclusion of the first India-Russia forum on trade and investment, commerce & industry minister Kamal Nath said the funds would be invested as Russian equity in projects in India that would be set up in partnership between the entities of both countries.

According to official sources, India owes $1 billion to Russia, including interest, and the funds have been lying with Reserve Bank of India.

The agreement will boost Russian investment in India — which currently stands at a paltry $94 million — in a big way.

Two way trade between India and Russia is also low at $2.6 billion (in the fiscal 2005-06) compared to $30 billion of bilateral trade between China and Russia. India’s exports to Russia stands at $729 million.

In a bid to give a push to trade and investment, the two sides are looking at the possibility of entering into a comprehensive economic partnership agreement (CEPA). The JSG set up to study a possible CEPA is expected to give its report by the year-end following which negotiations would start.

India and Russia have also agreed to a protocol to boost bilateral trade and investment and identified sectors for boosting trade. Russian minister of economic development and trade G O Gref said that the next meeting of the forum would be held in Moscow next year. Mr Gref led a delegation of 238 businessmen and officials, many of whom were visiting India for the first time. The forum was set up last year to formulate recommendations on trade and investment issues on a regular basis. Its mandate includes covering various aspects of Indo-Russian bilateral trade and investment relations including the possibility of setting up a trade centre each in India and Russia.

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