The Hindu Business Line : Indo-Russian panel identifies oil, gas & IT as key business areas

INDIA'S trade and investment with the Russian Federation will get a boost with the Joint Inter-Governmental Commission identifying oil, gas, ferrous and non-ferrous metals, construction and IT as the key focus sectors for business in the two countries, the Deputy Prime Minister of the Russian Federation, Mr A.D. Zhukov, disclosed here on Friday.

Speaking at an interactive meeting organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here, Mr Zhukov told industry leaders that the volume of bilateral trade and investment could rise significantly in the next few years if India recognised the statutes of the Russian Government as a market-based economy.

The time to enter Russia, he said, was opportune, as it had emerged as an attractive investment market, primarily because of the lowering of the tax burden by over five per cent in the last few years. This was slated to come down further from 2005. Simultaneously, VAT would also be lowered.

Mr Zhukov said the structure and nature of the Russian economy had been transformed and the industry would find it highly profitable to invest in high tech areas such as automobiles and tourism, not just in traditional sectors such as tea and coffee.

Regarding financing arrangements for Russian projects in India, he said, "Financing depends upon settlement of debt, and it is our hope that the Inter-Governmental Commission would be able to thrash it out."

Mr Zhikov said options for the use of debt rupee funds for financing of projects had been explored. These could take the shape of building a titanium dioxide plant in India for re-exports to Russia and construction of an aluminium plant, metro and other infrastructure projects.