Russia’s membership of WTO will have a “positive impact” in boosting its bilateral trade with India which is currently hovering around 10 billion dollars a year, far below their potential, according to Indian officials.
The officials said Russia’s formal accession into the World Trade Organization (WTO) after 18 years of negotiations was a bright spot amid the turbulence in the European economy.
The Russian entry into WTO will have a “positive impact” on bilateral trade and investment with India and also be “a considerable positive enabler”, according to Foreign Secretary Ranjan Mathai.
Prime Minister Manmohan Singh has already welcomed Russia’s entry into the WTO but he voiced concern over the current level of Indo-Russian trade volume. By contrast, the Russia-China trade is around 60 billion dollars each year.
Indian and Russian officials during talks between Prime Minister Singh and President Dmitry Medvedev in Moscow were one in agreeing there is a huge potential to expand bilateral trade for which a ambitious target of 20 billion dollars has been set for 2015.
Pharmaceuticals is one area which India is targeting for greater exports to Russia.
While closer integration with the global trading system will bring economic benefits to Russia, some estimates claim that it will give the economy a boost equivalent to the value of 1 per cent of GDP per year; the rest of the world also stands to gain.
Although the tariff rates for imported goods have been declining ever since Russia first began its transition to a market economy 20 years ago, WTO membership will further accelerate the process of trade liberalisation.
Tariffs on over 700 categories of products will be abolished or reduced, with the average import tariff rate expected to fall from 10 per cent to 7 per cent.
India has expressed its readiness to enter into a Comprehensive Economic Partnership Agreement with the Customs Union comprising Russia, Belarus and Kazakhstan and has already decided to set up a Joint Study Group in this regard.