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Image Courtesy: PIB
 
 
The US State Department spokesperson Marie Harf has sounded skeptical about the outcome of Russian Vladimir V. Putin’s visit to India during 10-11th December for the 15th annual bilateral summit.
The other day she reportedly stated: “I know there's a lot of rumours, often of trade deals or economic deals, but let's see what's actually put into practice here.” 
The US might well have to rue the fact that sanctions by the US and its allies are driving Russia to clinch a slew of economic and other bilateral agreements with India. 
In the run-up to Mr. Putin’s visit, the Indian Prime Minister’s Office (PMO) has been nudging ministries to develop positive stance towards certain draft agreements / proposals that have been put forward by the Russians. 
One agreement that in all probability would be signed is the Green Corridor Agreement (GCA), which PMO considers an opportunity to boost Indian exports to the Russian Federation.
As noted by PMO last month, an agreement between the Customs of the two countries for fast track clearances of export consignments can greatly help India’s export to Russia. PMO indicated that Central Board of Excise and Customs (CBEC) has to take a decisive call on the Russian draft on GCA.  
As for the revival of Rupee-Rouble trade, which was phased out after the break-up of the Soviet Union in the nineties, much depends on the two sides putting in an effective mechanism to prevent recurrence of abuse of such trade mechanism by the companies. The businesses from both sides as well as multinationals from the West exploited this mechanism to divert rupee-denominated exports to hard-currency areas, thereby depriving India of opportunity to earn several hundred million dollars. 
Indian pharmaceuticals and engineering companies have pitched for bilateral trade in national currencies. The Finance Ministry and Reserve Bank of India (RBI), on the other hand, are treading cautiously on this proposal which has been talked about for last five years. RBI and its Russian counterpart have a joint committee to work out modalities for bilateral trade in rupees and roubles. 
PMO has noted that an “urgent proposal” for rupee payment for defence supplies to Russian companies hit by US sanctions remained stuck in Finance Ministry.
This stalemate persisted in spite of the fact that both the defence and finance portfolios were till recently held by Mr. Arun Jaitley, according to a political analyst. 
The prospects of Rupee-Rouble trade were articulated by the Indian Ambassador to Russia P.S. Raghavan in an interview with Voice of Russia in September this year.
Answering a question on the issue of trade in national currencies, Mr. Raghavan said: “It is obviously advantageous, because trade between Russia and India is now through the currency of a third country which means that business people have to hedge against two different currencies – between rupee and dollar and then dollar to ruble and vice versa. So if you cut out one currency, obviously transaction costs are lower and trade becomes more competitive.”
Apart from sounding positive on proposed green corridor, he talked about a proposed trade corridor named North South Corridor – from ports in India to ports in Iran, up by the overland route and then into Russia, either across the Caspian Sea or through Azerbaijan. 
The proposed corridor is likely to slash the time for transport of goods from India to Russia by half to 20-25 days, apart from reducing cost of freight. 
An Indian analyst believes that Russia might well convince India to agree for Rupee-Rouble trade at least for certain items by offering concrete proposals to improve India’s energy security through hydrocarbon deals. 
He suggests that Russia should offer strategic technologies that have been denied to India by the 42-countries Wassenaar Arrangement (WA) under the influence of the US. The Russian Federation is a member of WA, which issued a 230-page revised list of dual-use goods and technologies and munitions on 3rd December 2014.  
Noting that sanctions-hit Russia is seeking foreign investment in oil and gas projects, PMO desired that the Ministry of Petroleum and Natural Gas should prepare a “wish list” that should be put before Mr. Putin. 
A source quoted PMO as saying that the bilateral strategic vision document to be signed during Mr. Putin’s visit would be “incomplete if it does not have a healthy hydrocarbon element.” 
Mr. Putin’s visit is likely to result in signing of an agreement for mutual recognition of educational degrees by the two countries. 
PMO realized that an agreement for mutual recognition of degrees is pending with Ministry of Human Resource Development, which has certain technical reservations. This situation has developed in spite of a similar agreement that was concluded with the Soviet Union way back in 1987 and confirmed for Russia by HRD Ministry in 2010.
 
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