Taking a serious view of the "below potential" economic cooperation, India and Russia, on Thursday, agreed to take steps to enhance trade and investment and expedite setting up of a proposed task force relating to rupee debt funds for investment in joint projects.

During wide-ranging discussions with Russian Prime Minister Mikhail Kasyanov and his deputy Alexei Kudrin, External Affairs Minister Yashwant Sinha sought Moscow's co-operation in addressing three major areas of concern to both Indian and Russian business sectors.

These included, absence of physical and financial infrastructure, which Sinha stressed, could only be addressed through better transport links, faster clearance of goods and expanded contacts between banking sectors.

The minister also sought Russian understanding on the need to have a flexible and friendly visa regime to facilitate increased business exchanges and early settlement of outstanding claims of Indian exporters.

The Russian premier shared Sinha's view that existing trade and investment ties were far below potential and that economic and commercial cooperation needed to be at the core of the strategic partnership between the two countries.

Kasyanov assured the minister of Russia's "full understanding and support" towards creation of a conducive environment for growth of economic and commercial ties.

The two sides emphasised on the need to qualitatively expand the existing trade basket by providing a special thrust to merging cooperation in areas like energy, agriculture products and food processing, machinery and equipment, manufactured goods and information technology.

India and Russia have agreed that a proposed task force for considering means of utilising part of the rupee debt funds for investment in joint projects should be set up soon.

Both sides agreed to take all possible measures to not only enhance trade and investment but also to align this engagement with market determined practices.

The two sides reaffirmed their commitment to the full implementation of the joint declaration on strengthening and enhancing economic, scientific and technological cooperation, signed during the visit of Russian President Vladimir Putin to India in December last year.

They agreed that its implementation will impart a new thrust and dynamism to bilateral commercial and economic engagement.

During the talks, it was felt that increased contacts between financial institutions would facilitate building of trust and greater understanding. As a step in this direction, the two sides agreed to encourage opening of branches of their banks in each other's country.

Sinha said that Confederation of Indian Industry would soon be setting up its office in Moscow to boost business contacts.

Both sides underscored the need for imparting a new dynamism to investment ties. While Indian investment of $1.7 billion in Sakhalin-I project and a similar Russian investment in Kudankulam nuclear plant were significant, the two sides stressed that business sectors needed to explore more avenues for mutually beneficial engagement.

It was agreed that cooperative efforts in the field of natural diamonds should be sustained.