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Vladimir Putin: Thank you, Mr Minister,

I mean to thank the Indian Finance Minister and the Chief Minister of the State. Thank you for the very warm introduction.

When I listened to the Indian Finance Minister speaking in such an emotional and substantive way, I wondered whether I was still in Parliament. He was being so succinct, clear and interesting.

So it remains for me to elaborate on the ideas which have just been expressed by the Finance Minister and the Chief Minister of the State. These are indeed the underlying issues of our relations.

I would like to thank you for the invitation to speak to you here, in the citadel of the Indian economy. I am particularly pleased to be in the city which is a twin of my native city in Russia, St Petersburg.

Our meeting is not a formal event, at least as far as the members of the Russian delegation are concerned. India has traveled a difficult path on the way to becoming a well-organised and cohesive country. But the most important thing is that Indian businessmen share the concept of social responsibility. It means serving the consumer, concern about labour conditions and reasonable profits. The leaders of the Indian business community have declared these principles to be the “dharma”, that is, the mission of entrepreneurship.

The experience of the common interest of business and the state in economic progress is particularly valuable.

The relations between our countries have withstood the test of time and have endured many twists and turns of politics. Our friendship has benefited millions of people and, I would like to stress, it has harmed no one.

Today we have reached a new frontier in the development of our relations, the stage of strategic partnership. We have already amasses concrete ideas that meet not only the requirements of today, but are looking towards the future.

One of our main goals is stepping up economic and trade cooperation. Today it does not match the real potential, the opportunities and needs of the two countries. Our peoples have a wish and a commitment to move forward.

We are also one in that we, political leaders, must be in constant close contact with the business elite and must listen to its assessments and judgments.

In connection with this, I would like to speak about the new opportunities that are opening up in Russia for the development of business. Our economy is growing healthier and more dynamic. Steps have been taken that unshackle the economy and allow it to breathe more freely. We are putting all the government structures in order, strengthening the state and ensuring the prevalence of federal laws throughout Russian territory.

We want our Indian business partners not only to preserve their positions in the Russian market, but to actively develop their business in our country. There are already many examples of the successful work of Indian companies in Russia. As we were passing through the exhibition just now, I saw people with whom I had met many years ago on business in Russia and in Europe. There are examples of successful joint enterprises and joint production.

Russian businessmen are interested in foodstuffs, medicine, light industry, trade and services, and more recently electronics. Russia knows the companies represented at this exhibition, including the plans of the Videocom firm to invest $100 million in the development of the Voronezh television factory. The Governor of the Voronezh Region is present here. I hope these are just the beginning of joint activities.

We know about the traditional ties between Indian and Russian businessmen. We would like to see Indian companies among the major investors in the Russian economy. Such activities will have complete administrative support from the presidential structures and the Government of the Russian Federation.

We welcome the changes in the Indian export-import policy that will promote our bilateral trade.

Today we should seek not only to increase trade, but to improve the structure of trade. So far, the share of hi-tech products in our trade is extremely small. And the flow of traditional goods between the two countries can and must be increased. We have talked about it during the meeting with the Indian Prime Minister and other leaders.

For our part we are ready to see what else needs to be done to give access to more inexpensive and quality Indian goods which have acquitted themselves well in the Russian market. I am referring, of course, to the traditional Indian goods: tea, tobacco, coffee, textiles and medicines. I would like you to note that the Russian Federation today buys more of these traditional Indian goods, in absolute terms, than the Soviet Union did.

Among the problems in the trade and economic field are the anti-dumping measures against many Russian goods in the Indian market.

Constructive interaction on these issues is getting underway, but so far positive changes have been few. While we regard Indian laws with due respect, the Russian side urges you to have consultations before launching anti-dumping procedures in order to promptly achieve mutually acceptable solutions. I can tell you that after corresponding court procedures and the introduction of the decisions, some markets take a long time to follow up with administrative measures.

We must continue to create favourable conditions for expanded Russian purchases in the Indian market as an offset for Indian debts. We should see how to best use the remaining Indian debt, including for investments in priority economic cooperation projects.

Besides, it is time to modernise the entire infrastructure of our economic and trade relations: banking, credits and transportation. The debt resources are limited. If we do not use them now in the areas I have just indicated, we will miss certain opportunities for promoting our economic relations on a long-term and solid basis.

We welcome the Indian initiatives, in particular the participation of the Indian National Oil Corporation in the Sakhalin-1 project. The contract can mark a breakthrough in our trade and economic cooperation because of its scale.

I think we can well establish cooperation in the field of rough diamonds and precious metals, something India is interested in. We are reviewing the possibilities for expanding our joint work. The issues facing the Russian Government will be solved. The feasibility of this project is being studied by Gokhran of the Russian Federation (state depositary of precious metals and gemstones) and the Indian corporation MMTS.

There are good prospects for cooperation in the oil and gas industry. The head of one of the biggest Russian firms, Mr Vyakhirev, who is present here, has signed an agreement with the Indian partners.

The Transportation Ministries of India and Russia have done much work to prepare an agreement on the development of the North-South transport corridor. The Finance Minister mentioned it briefly, and we agree with him that it is one of the most important major projects. It will have a major impact on the expansion of economic cooperation between the two countries and will bring significant changes to the flow of goods in that region of the world.

Russian firms and organisations are ready to join the new developments in India. I have already mentioned Mr Vyakhirev who is present here. His company is working with Indian partners in the Bay of Bengal. Hands-on work has started to implement a major international project, the Kudankulam nuclear power plant.

We are interested in joint work in the oil and coal industries, and in civil aviation. A working group on civil aviation has been set up under the auspices of the Intergovernmental Commission. The early stages of its work have shown that there is interest in and there are opportunities not only for selling planes, but for jointly building planes designed in Russia, including the pioneer in this area, the Saraya-Duet plane.

I would like to stress the importance of an early signing of a Russian-Indian agreement on the recognition of air-safety standards. We very much hope that the relevant Indian agencies will respond positively.

Indian products are well known and liked in all the Russian regions. Many regions of the Russian Federation are ready not just to supply India with goods, but to take part in joint investment projects.

We favour direct trade and economic links between regions and between individual businesses in accordance with the laws of the two countries. We hope to see more active work of the interregional cooperation task force created within the Intergovernmental Commission.

As I prepared for my trip to India, I studied the history of our mutual relations. One of its pages is the odyssey of the Russian Columbus, the explorer and merchant Afanasy Nikitin. The State Governor spoke about it yesterday. As far as I know there are plans to open a monument to him, the Russian who discovered India. A memorial to commemorate the Russian pioneer, as far as I know, is to be opened near Mumbai.

We believe these are symbols that claim our attention because they remind us of the roots of the mutual relations between our peoples.

I am sure that India and Russia will be able to build their relations in the new millennium in a worthwhile manner. As I have said, we have never had any clashes, or even major quarrels or contradictions. That provides a wonderful, and I would say, a unique opportunity for cooperation in the sphere of business that creates an excellent moral atmosphere. You know that mutual trust is very important in business. I think we should try not to miss this chance. We have everything for successful work.

Thank you for your attention.