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India, Russia likely to resolve dumping dispute, strike trade pact

India and Russia will sign a series of strategic defence and trade agreements and try to resolve the anti-dumping dispute between the two countries when Prime Minister Yevgeny Primakov arrives in New Delhi on December 20.

The Russian ministers for defence and trade and several other top officials will accompany Primakov.

Indian commerce ministry officials disclosed that one of the major issues Prime Minister Primakov wants Russia and India to settle during his visit is the dispute between the two countries on anti-dumping duties.

In November, the Indian government levied anti-dumping duties against hot-rolled steel coils imported from Russia and the Ukraine and also against imports of hot-rolled sheets, strips, plates, and boiler-quality plates from Russia, the Ukraine, and Kazakhstan.

The anti-dumping levy has upset Russia as it exports US $ 30 million worth of steel products to India every year.

Russian officials have charged that the duties were imposed after Indian steel manufactures like the Steel Authority of India, the Tata Iron and Steel Company, Essar, and Lloyd lobbied hard against the imports from Russia.

In a recent letter to the Government of India, Russia protested against the levy, pointing out that New Delhi and Moscow had agreed only last year to exempt certain types of products, steel included, which are traded regularly between the two countries, from anti-dumping actions.

But commerce ministry officials argue that by imposing the levies, India is only following the rules of the World Trade Organisation and the anti-dumping duties will affect only about US $ 7 million worth of steel exports from Russia.

"But since Moscow is unhappy with the duties, there is a likelihood that we will reconsider our decision as India and Russia want to remain strategic trade and commerce partners," a commerce ministry official told Rediff On The NeT.

Therefore, he said, Prime Minister Atal Bihari Vajpayee and Primakov are expected to set up new Indo-Russian inter-governmental commissions to settle anti-dumping disputes.

The commissions could also negotiate long-term trade quotas for Russian exports of metal products, chemicals, and newsprint to India and Indian exports like tea, tobacco and pharmaceuticals to Russia.

But sources said there is a possibility that the Vajpayee government might not lift the anti-dumping levies against Russia all of a sudden, considering the pressure from the domestic steel industry.

Steel majors in India have been arguing that anti-dumping measures against cheap imports will provide much-needed relief to the recession-hit domestic steel industry.

Moreover, countries like Japan, South Korea, and South Africa, which are next on the firing line of the anti-dumping duties, will also criticise India if it exempts Russia from the action.

Indian officials said Primakov's first visit to India will also result in a major breakthrough in Indo-Russian military ties as he and Vajpayee are expected to sign a long-term military-technical document.

The document, which will be valid till 2010, will cover military supplies, technical co-operation, exchange of specialists and experts, and defence research and development.

Russia has been India's primary defence supplier for many years and both countries have been bound by a series of military agreements over the years.

Defence officials said the document would pave the way for India to purchase sophisticated Russian anti-missile batteries to counter Pakistan's Ghauri ballistic missiles. Russia has reportedly offered to supply S-300v/Antei-2500 batteries which military experts claim is superior to the US equivalent, the Patriot.

Russian and Indian defence officials have already finalised the framework for military co-operation which includes defence hardware and future purchases of Russian defence equipment. It will also include fitting of latest weapon platforms on the remaining Sukhoi-30 multi-role fighters and the delivery schedule of these aircraft besides the ongoing upgradation of MiG-21 and MiG-29 fighters.

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