Touching on a possible recognition of Russia as a market economy, something being insisted on by the Russian side, Kar noted that as for Indian business this is no big problem for it.
During his recent visit to India, Russia's Deputy Prime Minister Alexander Zhukov did not rule out that in the course of an upcoming visit by President Vladimir Putin to India, the question of recognising Russia as a market economy will be solved once and for all. He said that energetic consultations continued on this subject and "the Indian side has taken a series of steps to give Russia market status".
Kar said she did not think it was a big problem for India whether Russia is considered a market economy or not.
At the same time she emphasised that for more effective development of bilateral trade and economic relations it is necessary to finally settle India's rupee debt to Russia, mainly for arms deliveries from the former USSR.
Kar said that the rupee debt would be gradually rescheduled and there would emerge a new business partnership based on purely financial relations.
India and Russia are now mulling various versions for servicing the rupee debt and in particular its funnelling into investment projects. This was one of the subjects mentioned in New Delhi by Zhukov.
In Kar's view, the present economic relations promise a lot. The level of trade and investment between India and Russia is now well below the potential.
According to Russia's Federal Customs Service, trade with India in 2003 was worth $3.3 billion, with Russian exports being almost five times its imports ($2.7 billion against $584 million).
According to the director of the largest association of Indian industry, the pharmaceutical sector, health, information technologies, telecommunications and power engineering are the most promising areas of cooperation. Besides, Kar noted, Indian private companies are not against working in military technical cooperation, although this sphere in India is a state priority.
