Despite having strategic synergies, bilateral trade between India and Belarus hasn’t reached its potential. The Dollar Business caught up with H.E. Vitaly A. Prima, Ambassador of the Republic of Belarus to India, to understand the opportunities that the two countries can leverage on to strengthen the bilateral relations.
Interview by Niladri S. Nath | January 2018 Issue | The Dollar Business
TDB: How would you describe the socio-economic relationship between Belarus and India?
H.E. Vitaly A. Prima (VAP): India and Belarus share a cordial relationship based on mutual trust and support. The state visit of the President of the Republic of Belarus to India, in September 2017, has strengthened our ties. During the visit, Belarusian and Indian companies signed a number of mutually beneficial contracts and memorandums of understandings (MoUs). I believe that this strong bond will positively influence the dynamics of bilateral trade. I also believe that a close relationship between India and Belarus will generate benefits not only in areas of trade and economy, but also in areas like science & technology and culture & tourism.
TDB: Despite close relations, bilateral trade remains modest. What opportunities remain untapped?
VAP: Belarus-India trade and economic cooperation is progressing steadily. Bilateral trade turnover rose to $445.5 million in CY2015 from $55.4 million in CY2000. However, in CY2016, there was a slight decrease in trade, in value terms ($402.2 million), due to a fall in prices.
This year, exports from Belarus to India comprised 97 commodities which included potash fertilisers as well as other chemical and petrochemical products. Meanwhile, exports from India to Belarus are mainly pharmaceuticals, agricultural & chemical products and light industrial products.
The decrease in bilateral trade in CY2016 was a temporary phenomenon. Trade partners on both sides will definitely find ways to overcome the setback. Having said that, I agree that we are yet to leverage trade opportunities to the fullest. Large-scale diversification of exports from Belarus can be achieved by focussing on the export of unique technologies and products.
We hope there will be an increase in supplies of potash fertilisers, industrial and technological equipment and petrochemical products to India. Belarus is also willing to purchase high-quality pharmaceuticals, chemical products and other goods from India. Belarus, as a matter of fact, possesses an advantageous geographical position, developed infrastructure and highly skilled manpower that India can benefit from. Our membership of the Eurasian Economic Union (EEU) also opens up avenues for Indian investors and traders.
TDB: What facilities does Belarus offer India investors?
VAP: Belarus offers a globally-acknowledged favourable investment climate. In the World Bank Doing Business 2017 Report, Belarus ranks 37 (out of 190). In Belarus, there are six free economic zones (FEZs) with special tax and customs duty exemptions. The companies setting up units in the free economic zones will get exemption from tax for five years from the year they turn profitable. Once the exemption period is over, the companies can pay profit tax at a reduced rate of 50%. In addition, companies having units in FEZs will be exempt from paying property tax on buildings and facilities.
We assure you that the Belarusian government will provide all possible assistance to companies from other countries with specific and detailed business plans. Recently, we have proposed, to the Government of India, a Belarus-India investment cluster of innovations in the free economic zone at Vitebsk. Our government is interested in developing world-class drug manufacturing facilities there. We also aim to create modern enterprises to attract knowledge and investments from India.
TDB: Recently, Belarus and India signed 10 agreements to expand cooperation. Please give us more insight into those agreements?
VAP: During the President of Belarus’ recent visit to India, about 10 inter-governmental agreements and MoUs were signed. They cover areas like science and technology, education, agriculture, etc. In addition, a number of commercial agreements and memorandums of intentions for joint-development and manufacturing in oil and gas, defence, tourism, pharmaceuticals, etc., have also been signed. These MoUs will help create the necessary framework for Belarus-India engagements.
Alongside, a trial batch of Belarusian harvesters and heavy-duty trucks of different cargo carrying capacities will be exported to India. We hope to see a new wave of cooperation leveraging the Belarusian tractor brand, Belarus.
Moreover, Belarus is keen to contribute to the Skill India initiative. We believe that the extensive experience Belarus has will be instrumental in supporting various initiatives of the Indian government in reducing unemployment and upskilling workers. We are working on several projects to open Centres of Excellence in several states in India for some cutting-edge industries.
MoUs have also been signed between the Belarusian State Concern of Oil and Chemistry and the Ministry of Petroleum and Natural Gas of the Government of India, which will facilitate setting up large-scale collaborative projects. Belarus is ready to offer Indian companies the most advanced technologies for oil enhancement. The MoU signed between Belarus and India’s NBCC, opens broad prospects for mutually-beneficial cooperation and engagement in infrastructure projects in Belarus and India, as well as in other countries.
The cooperation in defence sector has been initiated through the Joint Belarusian-Indian Commission on Military-Technical Cooperation. We also have regular exchange of delegations in specialised exhibitions like MILEX and DEFEXPO. Such exhibitions not only maintain a constant exchange of information, but also open up opportunities for new areas of interaction.
TDB: India is currently negotiating a free trade agreement (FTA) with EEU. What kind of trade potential does the FTA hold for India and Belarus ?
VAP: We welcome the progress in the preparation of the draft FTA between the Eurasian Economic Union (EEU) and India. The agreement is intended to contribute to the further development of trade and economic cooperation between India and EEU members. The FTA with EEU will facilitate free movement of goods, services, capital and labour as well as pursue a harmonised and unified policy in the sectors determined by the treaty and international agreements within the Union. Nowadays, every country needs to diversify into new markets and EEU will give India opportunities for profitable placement of capital and seamless supply of manufactured goods to the vast market of the five-member states – Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia – with a trade potential of up to $62 billion and a large number of consumers.
TDB: Together, both countries are considering a technology demonstration centre to showcase Belarusian technology. What’s the latest on that front?
VAP: In cooperation with the Department of Science and Technology and the International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI), we are creating a technology demonstration centre in Hyderabad where Belarus will showcase its latest technologies. The selection of technologies is based on the demand of the Indian businesses and is aimed at giving them the necessary edge in the highly-competitive domestic and international markets. We expect details of this project to be finalised this year. The project is likely to materialise soon.
TDB: What would you like to convey to Indian policymakers and companies?
VAP: Indian policymakers are doing a great job by creating an extremely attractive environment in India for businesses from all across the world. We appreciate the thoughtful and constructive attitude of the government and private bodies. There are close links between the Belarusian Chamber of Commerce and Industry and the Federation of Indian Chambers of Commerce & Industry (FICCI). We want Indian companies to be more active and aggressive in promoting innovative ideas and projects in Belarus. They should consider us a reliable partner and friend.