International Trade

a) International Transit Agreement 

The International North South Transport Corridor Agreement was signed between India, Iran and Russian Federation to facilitate movement of goods via Iran, Caspian Sea and Astrakhan to Russia and adjoining countries of the CIS region. The Agreement provides for a shorter route for trade to Iran, Russian Federation and beyond. Through this transportation route our exports can get a competitive advantage due to lower cost and less delivery time.

3rd Meeting of the Co-ordination Council and 4th Meeting of the Expert Group of the International North South Transport Corridor (INSTC) was held in Delhi, India in October 2005.

The INSTC has been expanded to include eleven new members, namely Republic of Azerbaijan, Republic of Armenia, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Turkey, Republic of Ukraine, Republic of Belarus, Oman, Syria, Bulgaria (observer) (Source: www.instc.org.). Thus in total 8 countries of the CIS region are now the members of the INSTC.  

b) Government of India supported lines of credit 

1.     Under the India Development and Economic Assistance Scheme, the Ministry of Finance, Department of Economic Affairs (DEA) has formulated new guidelines for providing assistance, including Lines of Credit (LoC) to other developing Countries. Countries have been classified into four broad categories- HIPC (Heavily Indebted Poor Countries declared under the Paris Club Initiative), LIHD (Low Income, Medium to High Debt), MIHD (Middle Income, Medium to High Debt), MILD (Middle Income Low Debt).

2.     Countries included in Focus CIS Programme fall under the following categories and are accordingly governed by the following credit terms:

3.       These loans are for importing goods and services and for project exports 
           from India.  As a rule, not less than 85% of the total credit should be used 
           to import goods and services from India. Goods can be imported on 100% 
           FOB basis.

4.     These are commercial lines of credit provided by EXIM Bank and other Banks, with support from the Government of India.

5.         Proposals from two or more countries jointly can also be entertained provided that details regarding the implementing agency, and share of each country in the total credit envisaged, is indicated.

6.        All the proposals shall be forwarded by the Indian Mission in the concerned country to the Ministry of External Affairs with its comments, which, in turn, will forward the same to DEA, with its recommendations.

c)    Inter-Banking Relations

Indian Banks in Russia

1.         State Bank of India and Canara Bank are having a Joint Venture bank viz.
Commercial Bank of Moscow in Russia. SBI is having a stake of 60% whereas Canara bank has a 40% stake in the Joint Venture bank.

2.         ICICI bank Ltd is having a banking subsidiary in Russia.

3.         IDBI Bank has been permitted to open a Representative Office in Moscow, Russia and the bank is in the process of opening it.

Russian Banks in India

1.         No Russian bank has a branch in India.

2.         Three Russian banks i.e. Vnesheconombank, VTB Bank (erstwhile 
   Vneshtorgbank JSC) and Promsvyazbank JSC have representative
   Offices in New Delhi.

3.          Vnesheconombank's sub-office at Mumbai is being kept vacant at
             present. Vnesheconombank which was originally named as Bank for
             Foreign and Economic Affairs of the USSR has been renamed as 
            " Bank for Development and Foreign Economic Affairs" in 
             accordance with the Federal Law of the Russian Federation No.82 
             dated May 17, 2007.

d)    Double Taxation Avoidance Agreement (DTAA)

To promote and facilitate trade, India has already signed Double Taxation Avoidance Agreements (DTAAs) with Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russian Federation, Turkmenistan,Ukraine and Uzbekistan. Negotiations are on for signing the same with Azerbaijan & Tajikistan. Steps are being taken for initiating negotiations with Georgia & Moldova.  

e)    Bilateral Investment Protection Agreement (BIPA)

To promote and facilitate bilateral trade and investment, Bilateral Investment Promotion Agreement (BIPA) has already been signed with Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan, Ukraine, Russian Federation, Armenia &Belarus. Steps will be taken for signing BIPA with rest of the CIS countries i.e. Azerbaijan, Georgia & Moldova.

f)    Some More Steps

Reverse Conference of Heads of Missions/ Commercial Representatives of seven countries of the CIS region namely Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan & Uzbekistan was held at India in March 2006.

There is a regular exchange of delegations with countries in this region through participation in trade fairs of mutual interest and exchange of trade related information.