The Indian automotive industry is all set to enter the Russian market now to make its mark against the backdrop of growing bilateral trade totalling $3.5 billion last year.
"This year we are planning to increase the sales of our engineering products to Russia to $1 billion," said Rakesh Shah, chairman of the Engineering Export Promotion Council of India (EEPCI).
In 2006-2007, exports for engineering products from India to Russia amounted to $125 million, and imports from Russia to India were $900 million.
"The two countries have had a long history of business relations and by 2010, we want to achieve a trade turnover of $10 billion," Shah said in an interview with RIA Novosti as he led an Indian business delegation of 144 companies and firms to a St Petersburg tech show March 11-14.
Trade between the two countries had dropped sharply after the collapse of the Soviet Union. However, in 2003-2004 it began to regain its previous levels. Over the past year, trade between India and Russia has increased 84 percent, compared with 68 percent in the previous year.
"Indian goods, including industrial ones, sell well everywhere. The international market has accepted our quality. We have an advantage in prices compared with our rivals.
"China may be our competitor according to volume of sales and deliveries, but where high technologies are concerned, Indian goods are more competitive and of superior quality," Shah said.
The world's cheapest car Tata Nano ($2,500) was designed and developed in India and it has sparked immense interest both at home and abroad.
"As far as I know, it is now exploring co-production possibilities outside India. The auto industry is ready to enter the Russian market."
He said the main obstacle hindering trade relations is a lack of information about each other. Russia often does not know what happens in India, and India is not always clear about prospects in Russia.
More than 290 companies from 13 countries participated in the St Petersburg tech show. One of the main events of the first day was the opening of India Industry Days, when over 140 Indian industrial companies displayed ferrous and non-ferrous metal products, automotive parts, tools, chemical intermediates, computer software, and IT services.
The EEPCI signed two memoranda of understanding with the St Petersburg Chamber of Commerce and the Chamber of Commerce of the Leningrad Region, which will help promote trade and economic cooperation between Russia and India.
He said close ties between Russian and Indian banks are important in order to avoid intermediary services of third country banks. It will help reduce cost of delivered goods.
Transportation, flow of information and linkages will also be crucial in developing trade relations in the future. The Indian government is currently considering simpler visa regulations, he said.
"We know that Russia is a country where one can do business and make a profit. To sell our goods to Latin America, Africa and the rest of the world, we need 20 hours, but to trade with Russia, just six hours.
"Russia is an old friend of India, and I see no reason why trade between our two countries should not develop," said Shah.