Friday, September 16 2005 15:41 Hrs (IST) - World Time -

New Delhi: Giving a significant thrust to their bilateral relationship, India and Russia will set up a Joint Study Group (JSG) to explore the possibilities of a Comprehensive Economic Cooperation Agreement.

"Politically there is an in-principle agreement on setting up the JSG, which may be announced at the Indo-Russian Summit before the end of the year," Kanwal Sibal, India's Ambassador to Russia, told reporters on sidelines of a CII (Confederation Of India Industry) conclave in New Delhi.

He said India was particularly keen to invest in the energy sector in Russia, with ONGC making a proposal to Gazprom to source oil and gas from the country on a long-term basis.

Petroleum Minister Mani Shanker Aiyar, who has already visited the country twice, would be visiting it for the third time when he goes to Sakhalin site at month end.

"We have identified areas of interest to us where potentially, if conditions are created, India would be willing to invest substantial sums in Russia's energy sector. Russia can be a major partner in India's quest for energy security," he said.

Identifying banking and technology sectors as the drivers of the bilateral relationship, he said there was a need to ensure that issue of business visas did not hamper this growth.

"Problem in obtaining Russian visas is discouraging many companies and businessmen, including in the IT sector, to seriously look at opportunities in Russia," he said.

Pointing at the growing cooperation in the banking sector, Sibal said while State Bank of India and Canara Bank had established first Indian commercial bank, ICICI has bought a Russian bank.

The Export Import Bank of India was negotiating additional credit lines with two major Russian banks, which would help in facilitating bilateral trade that has been on a decline despite a very strong political relationship.

Noting that Russia had one of the largest automotive markets in the world, Sibal said there was a huge potential for both sides to work together.

He said Mahindra & Mahindra group is launching their Scorpio very soon in Moscow, Petersburg and Rostov-on-Don, while Tata Motors was planning to unveil its full range of products-trucks, buses and pick-ups in the Russian market.

Speaking on the occasion, G K Pillai, Additional Secretary, Ministry of Commerce said there was a huge potential for joint ventures in tea packaging, IT, oil sector and hoped that the issue of higher level of certification for import of bovine meat and egg powder from India would be sorted out soon.