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India and Russia to discuss comprehensive economic pact

The Hindu, India

India and Russia to discuss comprehensive economic pact

By Sandeep Dikshit

‘Aiming for a common Eurasian market’

16 December 2011

India and Russia will add another facet to their bilateral relationship by holding talks on a Comprehensive Economic Partnership Agreement (CEPA), an omnibus free trade agreement, during Prime Minister Manmohan Singh’s confabulations with the top Russian leadership here on Friday.

India and Russia have very close ties in defence, science & technology, nuclear and space sectors but have been trying to plug the gap of low bilateral trade for a number of years with modest success. “We are ultimately looking at a common Eurasian market,” said government sources while referring to Russian Prime Minister Vladimir Putin’s vision of having a customs union with several republics of the former Soviet Union.

“With Russia, most of the issues relating to CEPA have been sorted out. But we have to now see how this fits in with the Russia plan of customs union.”

For India, tailoring the CEPA to fit in with Russia’s customs union with Kazakhstan, by far the largest Central Asian country, and Byelorussia will help enlarge the market for Indian entrepreneurs.

The sources said the summit meeting between Dr. Singh and Russian President Dmitry Medvedev will address the deadlock in talks on Kudankulam 3 and 4 civil nuclear reactors by declaring their broad concurrence to all the terms and conditions but a signing ceremony is not on the cards. A joint statement to be issued after the summit meeting is slated to take the civil nuclear partnership between the two countries a step forward. On the Russian offer to host an Indian enrichment and reprocessing (ENR) plant on its soil and offer shares to New Delhi does not seem to have found favour as yet with South Block. In a move that began in the G-8, the Nuclear Suppliers Group has tightened rules for transfer of ENR equipment and technology. India terms this unfair because the exemption given by NSG, it says, was for the full fuel cycle of which ENR is a part. Caught between the need to honour their commitment to India and the need to comply with the decision taken by the civil nuclear cartel, Moscow sought to find a middle path by suggesting that the plant be set up in Russia. “We are still talking. We haven’t reached closure. Russia has international obligations to which they would be sensitive. We already have the full fuel cycle [and are in no hurry]. So let us see how to cooperate,’’ said the government sources.

The sources said one of India’s major defence acquisition in terms of technology and ability to strike fear in the adversary – the Nerpa nuclear-powered submarine – will be leased by the end of next month. Unlike a diesel submarine, the nuclear powered version does not have to intermittently come up for air to recharge its batteries, and can thus lurk beneath the waves for indefinite periods giving no clue about its location.

Hydrocarbons will be another focus area where India has been trying to close several exploration deals without much success. After demurring for years when the offer was made on a platter, India has now evinced interest in the blocks off Yamal Peninsula. It is also keen on a stake in Sakhalin-III and the Trebs and Titov gas fields.