New Delhi: Seven years after the expiration of the investment treaty between India and Russia, the two nations have initiated talks to swiftly finalize a new agreement aimed at boosting investments and business cooperation, according to officials from both sides.

Virtual negotiations for the new investment treaty took place on July 18-19, shortly after the matter was discussed during a meeting between Prime Minister Narendra Modi and President Vladimir Putin in Moscow on July 9. Both countries agreed to expedite the process of finalizing an agreement to promote and protect investments, officials said on condition of anonymity.

A joint statement issued following the India-Russia Summit in July revealed that the two leaders had instructed officials to begin negotiations on signing a bilateral free trade agreement in investments and services. They also set a bilateral trade target of $100 billion by 2030.

“India and Russia conduct trade in local currencies, the rupee and rouble, and bilateral merchandise trade has seen significant growth. India’s exports to Russia increased by over 35% in FY24 compared to FY23,” an official noted.

“Similarly, Russian imports, primarily petroleum, grew by more than 32%. The booming trade between the two countries is paving the way for expansion into other areas such as trade in services and foreign direct investment,” the official added.

While no specific timeline has been set for concluding the treaty, both sides are aiming to finalize it as soon as possible, officials said.

A second official stated that the countries are “close to moving forward” with the investment treaty, calling it an opportune time to take concrete steps to ensure investment protection. The proposed treaty is expected to enhance mutual investment prospects, he added.

“This is a crucial step toward further strengthening trade and investment ties. Numerous business delegations from Russia have visited India to explore opportunities in sectors such as energy, petrochemicals, infrastructure, construction, and railways,” the second official remarked.

India and Russia had previously set a target of $50 billion in total bilateral investments by 2025, after surpassing $30 billion in 2018. “Investors from both countries share common interests in specific sectors where they can complement each other within the value chain. For example, India is interested in the upstream oil and gas sector, while Russia is focused on India’s downstream sector,” explained a third official.

India has also expressed interest in investing in Russia’s Far East region, the northern sea route, and sectors such as energy, infrastructure, and shipbuilding, particularly ice-class vessels capable of navigating sea ice, officials said.

Other areas of mutual interest include pharmaceuticals, steel, and banking. Russia has invited Indian investors to participate in high-tech projects in its Far East, while India has encouraged Russian investors to establish manufacturing facilities in greenfield industrial cities under its industrial corridor program.

With a bilateral trade target of $30 billion by 2025, merchandise trade between India and Russia surpassed $65 billion in 2023-24, with a trade balance of approximately $57 billion in Russia’s favor.

India exported goods worth $1.74 billion in the first four months of the current fiscal year, showing 32% year-on-year growth. Russia’s exports to India rose by 20.3%, reaching $23.78 billion between April and July 2024.

“Russia is keen to invest part of its trade surplus in India, recognizing the country’s fast-growing economy,” the first official said.

A bilateral investment treaty with Russia, based on a model agreement from 1993, was signed in December 1994 and came into force in August 1996. India terminated this agreement in April 2017, along with several other bilateral investment pacts, according to the third official. The 1993 model text had significant shortcomings, including provisions that were open to broad and ambiguous interpretations by arbitral tribunals, he noted.

Investment treaties are legal agreements between two countries designed to ensure fair and equitable treatment of foreign investments, providing them with the same rights as domestic companies. Using the 1993 model, India signed treaties with 83 countries by 2015, with 74 of these agreements coming into force.

India first encountered problems with the 1993 model in 2011, when it received an adverse ruling in the White Industries Australia Ltd case. This, along with a rise in international arbitrations, led to a revision of the model text, which was adopted in 2015. Following this revision, India terminated investment treaties with 77 of the 83 countries with which it had agreements.

Toronto: Following another significant defeat in a federal by-election, Canadian Prime Minister Justin Trudeau’s government could soon face a potential no-confidence motion, possibly as early as next week.

The defeat occurred in the Quebec riding of LaSalle-Émard-Verdun, where Bloc Québécois candidate Louis-Philippe Sauvé won against Liberal Party candidate Laura Palestini. This by-election was prompted by the resignation of former Cabinet Minister David Lametti, who had secured the seat in the 2021 federal election with a nearly 20 percent margin.

This loss follows a similar defeat in Toronto-St. Paul’s in June, signaling Trudeau’s declining political fortunes. His next hurdle will be surviving the anticipated no-confidence motion from the opposition Conservative Party, whose leader, Pierre Poilievre, declared on social media: “Taxes up. Costs up. Crime’s up. Time’s up.”

Poilievre is pushing for early elections, and recent polling by Abacus Data suggests his party has strong momentum. If elections were held now, 43 percent of committed voters would support the Conservatives, while only 22 percent would back the Liberals. Modeling by Raymond Liu for the National Post suggests that such a result would see the Liberals fall to fourth place in the House of Commons, behind the Conservatives, Bloc Québécois, and New Democratic Party.

Despite these setbacks, Trudeau has not indicated any intention to resign. Instead, he urged voters to stay engaged, emphasizing the stakes of the next election, currently scheduled for October next year. However, a no-confidence vote in the House of Commons could trigger early elections. The Liberals, holding 154 of 336 seats, would need support from either the Bloc Québécois or the NDP to stay in power. Earlier this month, the NDP withdrew from the Supply and Confidence Agreement, putting Trudeau’s political future in jeopardy.