India and Russia to Begin Trade Negotiations

India and Russia to Begin Trade Negotiations

Giving a new dimension to their time tested relationship, India and Russia have decided to start negotiations to formulate a trade agreement between them. The agreement has been termed as a Comprehensive Economic Cooperation Agreement, which indicates that it will not be as radical as a Free Trade Agreement (FTA), but slightly short of it. Signing of such agreements brings down import tariffs between nations, and increase the flow of goods and services. Union Commerce and Industry Minister Anand Sharma says, ?his economic cooperation caan no longer be limited to purchase of defence equipment or investment in oil and gas, although these are highly valued by both countries, but must extend beyond government to government trade and investment. Our common target is to achieve US$ 20 billion in trade by 2015.

Industry experts feel that this agreement will boost trade between the two emerging economies, and herald a new dawn in their relationship. It may possibly be a roadmap for arriving at an FTA. Russia is the 12th largest economy in the world, and has the highest per capita income among BRIC (Brazil, Russia, India, and China) economies. Russia? economy grew an average of 7% per annum from 1999-2008, a growth rate similar to that of India and China. While Russia was hit by the global financial and economic crisis in 2009, it has since returned to GDP growth, and its economy is projected to grow around 4.5% per annum until 2015.

set up a two million tonnes a year iron and steel plant near Bellary in Karnataka.