Prime Minister of India - Dr. Manmohan Singh

Remarks by PM at the meeting of Indian and Russian Businessmen

"It gives me immense pleasure to meet you all in Moscow. I attach great importance to interaction with entrepreneurs and businessmen of Russia and India. You represent the business and industry of two of the most rapidly growing emerging economies of the world.

In the post-1991 period, the content and format of the economic relations between India and Russia have been redefined. The rapid growth of our markets and economic reforms have created trillion dollar economies in both our countries.

The Indian economy is today witnessing an annual GDP growth rate of about 9%. Never before has such a growth rate been sustained year after year. Our target is to attain a growth rate of 10% in the 11th Plan period.

We have strong macroeconomic fundamentals. Our growth process is largely based on growing domestic consumption. Our foreign exchange reserves have crossed US$ 250 billion. We expect to receive Foreign Direct Investment of about US$ 30 billion this year. Our savings and investment rates are close to 35% of our GDP.

We have a highly favourable demographic profile and a robust educational system. We have plans to establish 6000 model schools in the country, open 30 new Central Universities, 370 new colleges, and undertake a huge expansion of Institutes of Technology, Management and Science. I have announced a major expansion in our vocational educational and skill development programme.

Infrastructure development is today a high priority in India. Our infrastructure needs are estimated at over 450 billion dollars over the next five years. Mechanisms have been institutionalized to sustain high levels of investment through public-private partnerships, systematic bidding systems and innovative financing mechanisms.

There are thus enormous opportunities that are opening up in India and government is playing the role of a facilitator. But there is only so much governments can do. There is no substitute for a vigorous two-way engagement between the business communities of India and Russia. I regard today's meeting as a vital step in that direction.

Trade and investment relations between India and Russia have lagged far behind our excellent political understanding and our joint commitment to strategic partnership. President Putin and I have therefore identified this aspect as having a high priority. We wish to see our economic engagement expand to become a major pillar of the Indo-Russian strategic partnership.

If Russia's trade with China is US$ 35 billion and with the European Union it is more than 200 billion Euros, I see no reason why India-Russia trade should languish at the level of US$ 4 billion.

During my last visit, we had decided to set up an Indo-Russian Joint Study Group to suggest ways to enhance our bilateral trade volume to US$ 10 billion by 2010. I am happy to inform you that the Government of India has approved the report of the Joint Study Group. We have also decided to set up a Joint Task Force to implement the recommendations.

I would like to mention some of the more promising areas for future cooperation. India's energy requirements are going to increase manifold. India has the technological and financial capabilities to participate in both upstream and downstream areas in the hydrocarbon sector. Our refining capacity is projected to double by 2012 from the existing level of 120 million tonnes. There is an expanding market and organized distribution channels. I believe that there are bilateral synergies in this important sector waiting to be exploited.

I would also mention the immense possibility for joint investments in the areas of banking, information technology, telecommunications, high-technology sectors, power, pharmaceuticals and textiles. Indian and Russian enterprises can collaborate in third country markets.

Russia is the second largest producer of rough diamonds in the world. India is the largest processor of rough diamonds, representing more then 80% of the world's mined production. Indian companies have strong presence in the international jewellery market and opportunities for collaboration need to be explored.

India will be hosting the second meeting of the Indo-Russian Forum on Trade and Investment in India in February next year. We look forward to receiving a strong contingent of businessmen and entrepreneurs from Russia. Such meetings should become frequent and lead to tangible outcomes.

It is your enterprise and entrepreneurship that have created the growth story in our two countries. It is this same spirit that we look upon to give a big leap forward to our bilateral economic relations. I assure you that our two governments are fully committed to make this happen."