By KUNA
New Delhi : India Russia trade can cross the targeted 10 billion usd by 2010 and further increase to 20 billion usd by 2015, if trade irritants and procedural hassles are resolved, India’s leading trade body said Saturday.
“The obstacles in improving Indo-Russian bilateral trade relate credit risk, insurance cover, Russian ban on farm items import, registration time for pharma products and investments safeguards,” according to a study released here today by Indias leading business chamber — Federation of Indian Chamber of Commerce and Industry (FICCI), — ahead of Russian PM Victor A Zubkovs visit to India on Feb 12-13.
The FICCI study revealed that the payment system involving the letter of credit is highly ineffectual in the case of business dealings with Russia. “Indian exporters say that in the absence of letters of credit they have to negotiate with their counterparts directly. In such cases Russian importers are asked to pay an advance payment upfront with the remaining amount being paid after the execution of the export order. In the past, Indian exporters have faced problems in receiving the balance payments from their Russian counterparts,” the study said.
“Some of the Indian companies have pointed out that it is extremely difficult to establish the credit worthiness of new Russian companies. While several small companies were set up in Russia during the 1990s, bank reports and credit rating reports on these companies are not available. This makes dealing with such companies a risky proposition,” the FICCI said.
“Indian companies also lament that Russia has imposed ban on bulk import of agricultural commodities from India. According to a recent notification brought out by Russias animal and plant health watchdog Rosselkhoznadzor import of certain agricultural commodities like tea, coffee, rice and tobacco from India would be banned with effect from January 28, 2008. Indian traders based in Russia have reported that the ban has been imposed on bulk imports but would not affect import of plant products packaged for retail trade,” the study said.
During Zubkovs visit, the two countries are expected to hold discussions on measures to enhance bilateral trade by addressing the irritants.