Focus on firming up trade ties

Defence ties still form the fulcrum of 'privileged' strategic partnership between India and Russia and Russian-made military equipment accounts for 70% of Indian arms supplies, reports Jayanth Jacob.

Defence ties still form the fulcrum of 'privileged' strategic partnership between India and Russia and Russian-made military equipment accounts for 70% of Indian arms supplies.

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But the two countries are trying hard to make business ties a key aspect of the strategic relationship as Prime Minister Manmohan Singh and president Vladimir Putin reviewed the bilateral relationship and noted they "shared common views on all the important issues."

The bilateral trade remains a paltry $10 billion despite showing a 30% annual growth, and it is just $5.5 billion more than the two defence contracts signed in New Delhi on Monday.

The target of $20 billion by 2015 is not comparable with the $100 billion target with China or south east Asian countries.

The tussle over $3 billion Sistema investment after the 2G case verdict has become a sore point.

But, the two countries are hopeful of boosting the trade especially since the Russian accession to the World Trade Organization, that New Delhi says would provide "further opportunities to augment bilateral trade and investment."

"There is still untapped potential in areas such as pharmaceuticals, fertilizers, mining, steel, IT, civil aviation, telecom, infrastructure, food processing, innovation and services, which we will work to exploit," the PM said.

The two sides have also set up a US $2 billion fund to invest in trade and economic cooperation projects.