India-Russia Surpass Trade Target Ahead of Schedule, Reset It to $50Bln

Despite a strong strategic partnership, India-Russia trade ties never lived up to their full potential. During President Vladimir Putin’s visit to Delhi next week, 100 CEOs from each side will meet for a mega bilateral business summit, the first of its kind.

New Delhi (Sputnik), Rishikesh Kumar — India and Russia have expanded their bilateral trade target to $50 billion by 2025 from the current level of $30 billion, a target achieved seven years earlier than the set timeframe. 

The two sides have felt the need to develop bilateral cooperation in attracting companies to the special economic zones (SEZs) of both countries.

A representative office of Russian Export Center JSC will be opened in Mumbai this October. It will provide comprehensive support to Russian exporters entering the Indian market by organizing targeted activities, advising in the field of logistics and customs regulation and providing information to Indian companies on Russian exporters to India, as well as facilitating financial support.

Meanwhile, the Ministry of Economic Development of the Russian Federation and India's Ministry of Commerce and Industry are preparing a joint action strategy for enhancing bilateral trade and investment. The strategy will be presented during the India-Russia Annual Summit, officials told Sputnik News.

Moscow and Delhi will also soon test the implementation of the Green Corridor project before it is rolled out in a full-fledged manner. The Green Corridor project was mooted by Russia's Federal Customs Service. It has proposed that the two countries create a list of entrepreneurs or companies whose goods, on a reciprocal basis, will not have to pass through a customs inspection during border crossings, according to sources familiar with the subject.

READ MORE: India Mulls Using National Currencies in Trade With Russia

Russia is already implementing the Green Corridor project with Finland and Turkey. Moscow has also signed such agreements with China and Italy. The Russian government considers the Green Corridor project as one of the most important levers for increasing mutual trade.

"The main advantage of the 'green corridor' is that goods being transported by entrepreneurs will not have to undergo customs inspection and examination when crossing the border – measures now commonly used to minimize risks. This also applies to documents. Samples and specimens will not be taken. The provision of original copies of documents is not needed, and so on," explained a person familiar with the matter.

Both countries would have lists of entrepreneurs or companies characterized as "bonafide participants in foreign economic activities." To include one's name on the registry, a number of criteria need to be met: the company must have no outstanding unpaid customs duties and absence of rulings on administrative violations in the countries among which the project is being implemented.

The mechanism itself should work as follows — an electronic pre-declaration is issued for the cargo; it is assigned a unique individual number in accordance with the identifier in the "green corridor" registry. The customs inspector thus already knows what goods are being shipped and does not need to inspect them — then without stopping, the cargo passes through the customs clearance post.

In addition, it is assumed that for green corridor participants, there would be a separate post and a special inspector to serve them at the customs terminal.

Another project, the completion of which is being eagerly awaited, is the International North-South Transport Corridor (INSTC), a route which primarily involves moving freight from India, Iran, Azerbaijan and Russia via ship, rail, and road. It will substantially reduce the time taken and cost for transport of goods between India and Eurasia once fully functional and increase economic activities between India and the resource-rich Russia as well as European markets.  

The INSTC has moved closer to implementation after India decided to join the TIR international customs convention.

A study conducted by the Federation of Freight Forwarders' Associations in India showed that the INSTC would be 30 percent cheaper and 40 percent shorter than the existing routes.

READ MORE: Russia May Help India to Launch Country's First Manned Space Mission — Reports

Meanwhile, Russia and India are also looking to strengthen cooperation in the field of civilian aircraft manufacturing and also to expand collaboration in the aluminum sector.

India has proposed to develop collaboration between the Geological Survey of India (GSI) with its Russian counterpart to explore deep-seated or concealed mineral deposits in India.

To provide India with world-class infrastructure, Russia has expressed interest in developing cooperation between Sinara — Transport Machines JSC and Indian Railways in the field of supplying track equipment for the construction, repair, and maintenance of railways, as well as other projects in the field of railway engineering.

Diamonds have led to an increase in Indo-Russian trade. With the aim of upholding and promoting the sustainable growth of the market, both India and Russia are cooperating on the development of diamond marketing campaigns by the Diamond Producers Association (DPA).

Within the framework of multilateral international cooperation in the diamond sector, Delhi and Moscow have expressed mutual interest in establishing a permanent secretariat of the Kimberley Process (KP) and improving its peer review mechanism within discussions that are still ongoing in the KP.