Europe, India open up new economic vistas

Berlin, October 8 :

It is now more than 15 years since India and Eastern Europe embarked on a drive to transform their economies and to open them up to foreign investment. But it has only been in recent years that the booming economies of India and Eastern Europe have slowly begun to forge new contacts with each other, including between India and the Czech Republic, Poland, Bosnia, the Baltics and Russia.

While India took steps to overhaul its once tightly-controlled economy through a raft of key reforms, East European countries were also moving during the early 1990s to roll back their Soviet-style command economies and push on with often painful moves towards more liberal market systems. Indeed, Russia in recent years has emerged as one of India’s key economic partners, with political ties flourishing against a backdrop of booming trade and growing military and technical cooperation. Moscow’s relations with New Delhi found fresh impetus in 2004, with the two sides aiming to boost bilateral trade from $3 billion to $25 billion over 10 years.

One success of Russian president Vladimir Putin’s tenure was his pushing the concept of a strategic alliance with both India and China, despite deep-rooted friction between Russia’s Asian neighbours. Business links are being consolidated through major economic projects such as the Sakhalin-1 oil and gas developments on the far eastern island of Sakhalin, where both the Russian and Indian sides hold a 20 per cent stake each. And following the dismemberment of the Russian oil company Yukos for non-payment of taxes, India’s state-owned ONGC oil company is expected to join China’s CNPC and acquire a large stake in Yukos’ former main production units. Work also continues in the construction by Russia of two nuclear reactors for India.

Further marking out the change in relations between Eastern Europe and India, the three Baltic states’ national development agencies have now begun cooperating with their equivalents.