Bilateral trade between India, Russia can touch $20 billion by 2015 if trade impediments are removed: FICCI

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A survey conducted by industry body, FICCI, among leading business houses ahead of a three-day visit to India by Russian Prime Minister Victor A. Zubkov, highlighted the concerns faced by Indian exporters in Russia.

Both countries will have to work hard to remove the obstacles that hamper bilateral trade such as insurance cover, Russia's ban on bulk import of farm products, slow registration process for Indian pharmaceutical products, and low safeguards for investments, the survey noted.

One of the main issues of concern is high credit risk.

"Indian exporters say that in the absence of letters of credit (LoCs), they have to negotiate with their counterparts directly. In such cases, Russian importers are asked to pay an advance payment upfront with the remaining amount being paid after the execution of the export order," FICCI said.

"In the past, Indian exporters have faced problems in receiving the balance payment from their Russian counterparts," it said.

The chamber recommended that the Indian Government should encourage the Indian banks to cooperate with their Russian counterparts in developing a system of issuing letters of credit.

The survey noted that Indian companies face difficulties in establishing credit worthiness of new Russian companies.

"Russian banks also do not provide credit reports for companies on behalf of which they conduct transactions. The world over, it is a standard practice for banks to provide credit rating and reports on companies that conduct their transactions through the bank," the survey noted. "However, requests made to Russian banks for such information about their clients do not elicit any response."

The survey also noted that Russia's insurance sector does not offer products that cover risk for stocks and raw materials.

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