India and Russia have resolved to expand the use of their national currencies in bilateral trade. Towards this, the two sides will encourage payments in national currencies for bilateral trade.
A working group set up for this purpose will make recommendations on eliminating the existing barriers and stimulating transactions in national currencies. This will also end the dependency on the volatile dollar in bilateral transactions and step up economic interactions.
This will mean a return to the Soviet era rupee-rouble transactions, which had resulted in India emerging as the biggest trade partner of the former USSR in the developing world with two-way trade to the tune of $5 billion in 1991.
"The Central Banks of the two countries have agreed to hold consultations to study the possibility of using national currencies transactions in foreign economic operations between Russia and India," Bank of Russia said in a release.
Russia has made the rouble fully-convertible since July 2008 and is keen to add it into the basket of global reserve currencies on the backdrop of sliding value of the US greenback.
The two countries will promote bilateral economic, trade and investment cooperation to contribute to the enhanced role of emerging markets in the world economy and to foster sustainable, balanced and inclusive global growth.
The two leaders recognised the enormous untapped potential in bilateral trade, investment and economic cooperation. The two governments will intensify efforts to identify measures to facilitate the full realisation of this potential.
They have encouraged Indian and Russian enterprises to explore more fully new opportunities arising from increasing national focus on infrastructure development and expanding the manufacturing sector. It is expected that Russian companies will utilise the opportunities in a wide range of Indian sectors and will 'Make in India'.
The leaders agreed that the initiative launched by India and the Eurasian Economic Commission for a Joint Study Group (JSG) to explore the feasibility of a comprehensive economic cooperation agreement covering trade in goods, services, investment cooperation, movement of natural persons and mutual recognition of standards, is of great importance for bilateral economic cooperation.
The Russian side will support the productive work of the JSG so that this group completes its study within an optimal timeframe.
The leaders noted that the International North-South Transport Corridor can vastly improve the efficiency of bilateral trade by significantly reducing transit time and freight costs. India and Russia will work together to conclude the necessary multilateral arrangements and outreach to step up the use of this corridor at the earliest.
The leaders noted with satisfaction the progress made in promoting direct trade of diamonds between the two countries and particularly in facilitating enhanced diamond trade through diamond exchanges in India. These measures should expand the share of direct diamond exports from Russia to India significantly.
India-Russia mutual investment should become a new point of growth in bilateral economic cooperation. There will be constant focus on the agreed plans for bilateral investment cooperation, the sides will take all necessary measures to support successful implementation of such plans.
An emphasis will be laid on promoting Russian investments in India in major infrastructure projects like DMIC, Smart Cities and Freight Corridors, as well as in broader sectors like telecom, power and roads.
In Russia, Indian companies' participation in Industrial Parks and technology platforms, in sectors like pharmaceuticals, fertilisers, coal and energy will be encouraged.
The two countries will encourage specialised investment funds to invest in these sectors and in the joint manufacturing of high technology products. In this context, they welcome the initiative of a direct investment fund of $2 billion between Rosnano and suitable Indian investment partners for implementation of high-tech projects.
To protect the legitimate interests of investing companies and promotion of investments, the two sides plan to enter into discussions to renegotiate the existing bilateral agreement, initially agreed on 23 December 1994.
The two sides also agreed on mutual trade facilitation measures, particularly with regards to simplified customs procedures. In this context, they agreed to finalise shortly a protocol on a "Green Corridor'' project. The leaders also invited companies of the two countries to realise the substantial opportunities in engineering, pharmaceuticals, information and communication technology, chemicals, fertilizers, metallurgy, agro and animal products, and transport.
The two sides will promote further strengthening and increasing the effectiveness of our bilateral inter-regional cooperation with a view to enhance trade and investment, tourism, cultural and people-to-people contacts. The leaders expressed confidence that a web of linkages between these and other regions and cities will bring substantial benefits to these regions and cities and bolster India-Russia partnership further.
With these and other initiatives, the leaders agreed to step up efforts for enhancing bilateral trade in the coming years and set a target of bilateral trade turnover of goods and services at $30 billion by the year 2025. It is expected that the level of mutual investments by then will be over $15 billion each way.
"While global political equations continue to change, India-Russia relations remain unique and India intends to keep its foreign policy unchanged so that the significance of the partnership will improve further," Modi stated.