India and Russia need to correct trade imbalance for local currency settlement to work smoothly

“Leningrad is strategically located in the north west of Russia and it can act as a gateway for Indian entry to the European market as it has the second largest sea port in Russia. A lot of Russian companies are keen to explore Indian market, which is the fastest growing economy in the world and has second largest population. There is huge opportunity for India and Russia to balance the current bilateral trade, which is largely lopsided in favour of Russia. The rupee-rouble trade settlement mechanism will work smoothly only if we correct the current imbalance in bilateral trade. We need to also diversify our trade basket as currently bilateral trade is concentrated in oil & gas, coal and fertilizers. India can export textile, auto-components, pharma and engineering goods, while Russia can export agro products to India,” said Mr. Yalov Dmitry Anatolivich, Vice Governor, Minister of Economy Development of Leningrad Region, Russia at an interactive meeting. The event was organized by WTC Mumbai and All India Association of Industries.

Speaking on this occasion, Ms. Shtokailo Vera Yurievna, General Director, Center for Industrial Development of the Leningrad Region remarked, “Leningrad is the largest region in the north west of Russia and it can serve as gateway to the European market due to its proximity. Leningrad ranks in the top 10 destination in terms of favourable investment climate in Russia and the regional government opened single window clearance system. Fertilizers, papers, building materials, wagons are some of the goods exported from Leningrad.”

In his remarks, Mr. Surovtsev Alexey Vladimirovich, Consul General of the Russian Federation in India pointed out, “Leningrad is the economic and logistics center in the northern part of Russia. The current year is significant as we marked 75th Anniversary of India-Russia relations. We should cherish our glorious past and work together for a prosperous future. I hope this networking event will bring new opportunities for trade, investment and other forms of collaboration between both the countries.”

Earlier in her welcome remarks, Ms. Rupa Naik, Executive Director, MVIRDC WTC Mumbai pointed out, “The current year is the historic year in the bilateral relation for bilateral relation as Russia has become the 5th largest trade partner of India from 25th last year and we are set to attain the USD 30 billion trade target set for 2025 in the current year itself. In April-Sep 2023, our bilateral trade crossed USD 22.6 billion, compared to just USD 13 billion in the entire of last year (2021-22).”

Ms. Naik emphasized the need to balance bilateral trade as currently it is hugely lopsided in favour of Russia, with India importing USD 21 billion worth goods and exporting hardly USD 1.3 billion worth of goods. Ms. Naik suggested the visiting delegation to explore trade and investment opportunities in Maharashtra, which has strong presence of MSME clusters in pharma, engineering, textile, food processing and other sectors.

Speaking about the Leningrad region, Ms. Naik informed, “Leningrad is rich in mineral and forest resource as it has more than 100 mineral deposits and 70% of the region is covered with forest. Indian companies can explore collaboration in oil refining, forestry, lumber, pulp and paper, chemicals, engineering and ship-building as they are dominant sectors in the region.”

A key highlight of the event was the signing of two MoUs, one between WTC Mumbai and the Center for Industrial Development of the Leningrad Region and the other between WTC Mumbai and Union of Industrialists and Entrepreneurs of the Leningrad Region. All India Association of Industries (AIAI) also signed MoUs with these two organizations of the Leningrad Region.

The event was followed by a B2B networking session between the visiting Russian business delegates and their counterparts in India.

The delegation consists of six companies from Leningrad and two firms from St. Petersberg. These companies are engaged in recycling of tyres, manufacturing industrial robotics, polymers for water proofing and industrial coating, cattle feed, hovercraft, wooden articles, communication equipments and others.

Ms. Sangeeta Jain, Senior Director, AIAI proposed vote of thanks for the event.