NEW DELHI -- Russian President Vladimir Putin suggested part of India's debt to Russia could be converted into setting up Indo-Russia joint ventures to enhance bilateral trade.

"Debt repayment to Russia can be adjusted against joint ventures by businessmen of both sides," Putin told Indian industrialists.

He added that "good results" can be achieved by investing part of Indian debt into joint ventures in India. He did not elaborate.

The Russian president, who arrived in New Delhi on Tuesday, also urged Indian industrialists to invest in his country, particularly in the energy and fuel sectors, AFP reported.

"We are modernizing the tax, judicial and administrative systems and we are improving our basic legal framework," Putin told the industrialists at a New Delhi hotel.

Putin added there has been a high level of industrial growth in the Russian economy, with growth output in the first three quarters rising to about four percent.

However he urged Indian captains of industry to concentrate on investments in the energy and fuel sectors, which had recorded a combined growth of eight percent.

Putin said the list of goods traded between the two countries was too narrow and needed to be expanded.

He added there were already indications trade between the two countries would improve, referring to two nuclear reactors Russia is building in India.

Putin also pointed out the low rate of trade between the two countries was the result of both the countries turning to market economies in the early 1990s.

"A fall in trade due to India and Russia becoming market economies is understandable, nothing unexpected about that," Putin said.

Indian Foreign Minister Yashwant Sinha told the meeting that India would work together with Russia "to completely transform relations". Pledging to remove impediments blocking bilateral trade between India and Russia, Sinha said: "The two governments are determined to revitalize and reinvigorate all agencies responsible for promotion of trade and economic relations."

Sinha echoed Putin's plea to Indian industrialists to invest in Russia, saying it was a huge market and that it was transforming. Ashok Soota, president of the Confederation of Indian Industry said: "We hope to double the trade turnover between Russia and India to three billion dollars in the next two years."

"The current Indo-Russian annual bilateral trade excluding defense deals amounts to a mere $1.4 billion.

"India-Russia ties are perhaps the only exception to the rule that political ties follow economic ties," he said.

Soota identified metallurgy, energy, information technology, banking, bio-technology, service sector, education and entertainment as areas where the two countries could have joint ventures.