Diplomats speak

Santosh Kumar Ganguly
"LEARNING FROM EACH OTHER'S EXPERIENCE"

        Santosh Kumar Ganguly is a career diplomat who has worked in the diplomatic corps of India for over thirty years. For three years, he was Indian Consul General in St. Petersburg. He answered our questions before leaving St. Petersburg.
        - Does the current level of economic and trade relations between India and St. Petersburg correspond to its potential? What could help to broaden business relations between India and St. Petersburg?
        - India has traditionally enjoyed friendly relations with Russia based on continuity, trust, and confidence. After the disintegration of the Soviet Union and the emergence of Russia this continuity became a solid foundation for developing a new strategic partnership with Russia. This did not however happen in the field of trade and commerce where this continuity was badly disrupted with the emergence of new forms of business and trade. Former companies vanished and new structures began from scratch, necessitating bilateral trade relations between the two countries. Obviously the level of trade turnover between India and Russia decreased considerably since Soviet times. But the tendency was soon reversed. Trade and economic relations began to pick up in 1994, reaching a level of almost two billion dollars in 1997. However this is a long way from the maximum potential of Indo-Russian economic and trade relations.
        St. Petersburg occupies an important place in bilateral trade between the two countries and plays a vital role in supplies of Indian exports to the Northwest of Russia. The trade turnover between India and this region has witnessed a steady growth in the last few years. In 1997, India occupied the third place in exports from St. Petersburg (220.1 million dollars) and 17th place in imports (70.8 million dollars). In 1998, exports to India amounted to 147 million dollars and imports to 76 million. St. Petersburg exports equipment for nuclear reactors, electrical machines, ferrous metals, copper and polygraph products. Major imports are tea, tobacco, pharmaceutical products, and garments. St. Petersburg serves as a distribution point for the Northwest of Russia as well as for its northern and eastern parts.I believe, that, apart from great distance, there are no special reasons that hamper growth of trade between India and Russia.
        - Why isn't India interested in creating joint ventures in St. Petersburg? What are the obstacles?
        - India is a capital importing country with a high level of economic growth. Since 1991 when India embarked on the path of economic liberalization, a large number of positive changes in rules and regulations concerning economy, industry and investments have been introduced. As a result, a lot of new areas have opened up for new investments and private participation. The investment atmosphere has improved considerably and both foreign and domestic investors have taken advantage of this, making India one of the largest investment destinations in the world. This is the main reason why the Indian investor is presently not interested in looking much outside. The outflow of capital from India in the last few years to other countries including Russia has been modest.
        - Why has India placed its orders for construction of a number of frigates, which some specialists call the ships of the XXI century, at Baltyisky Shipyard?
        - India has traditional ties with the city's defence industries, particularly in the naval sector. This cooperation is likely to expand further under the agreement for a long-term program of military technical cooperation between India and Russia that goes up to the year 2010. The actual placement of the contracts is the decision of Rosvooruzhenie, which has the authority to sign agreements on all such orders with foreign countries. The Indian government is happy that the contracts have been assigned to the city of St. Petersburg and are being executed on schedule.
        - During the last few years several delegations of St. Petersburg businessmen were in India and Indian business delegations came to St. Petersburg. Do such visits help in joint commercial employment of new technologies?
        - Exchange visits of St. Petersburg businesspeople to India and the visits of the Indian businessmen definitely lead to better appreciation of each other's potential and a better understanding of how the two economies complement each other, something that may be of great mutual benefit. St. Petersburg has been particularly keen on expanding trade relations with India. More than a year ago a twelve-member delegation of city officials and local industry CEOs led by then first vice-governor Ilya Klebanov, visited India. This preliminary visit will now be followed up by a high-level business delegation led by governor Vladimir Yakovlev. It is expected that a number of agreements and contracts will be signed.
        - What are the common economic interests and problems that India and St. Petersburg share?
        - The major problem facing India today is the development of infrastructure which has severely lagged behind demographic growth and economic and industrial development. Our top priority today is to expedite investments in this sector. Russia faces a similar problem, although the investment priority here is on restructuring the existing industry and infrastructure. Both India and Russia can learn from each other's experience.