India, home to the world’s third-largest automotive market is also a key exporter of vehicles and spare parts. The industry has evolved from being just an assembler to a full-fledged design and manufacturing powerhouse. And this is exactly why the Russian automotive industry is hoping India to fill the void left behind European and American carmakers.
In a recent interaction with Financial Express Online, Alexey Valkov, Deputy Director, Roscongress Foundation and Director, SPIEF (St. Petersburg International Economic Forum) said, “There is huge opportunity in the market in lieu of the American and European automakers have left.”
At present, Russia-India trade has crossed a record $49 billion (Rs 408,219 crore) in trade, with crude oil and fertiliser contributing the lion’s share. The pharmaceutical industry is also growing, but when it comes to automotive segment the trade is minuscule. In fact, according to United Nations data, India’s share of motor vehicle exports to Russia has been shrinking from the high of $11.2 million (Rs 93 crore) in 2010 and sliding to just $1.66 million (Rs 13 crore) in value.
Chinese vehicle manufacturers have taken over the streets of Russia post the exit of American and European carmakers, this is where the Indian automotive industry could play a competitive role.
Valkov believes that “the automotive industry is one of the most obvious ones,” where India and Russia industry can further cement their relationship.
“It is very evident on the streets of Moscow, St Petersburg, for example before the pandemic there were hardly one or two Chinese car brands. But now, practically the majority of new cars are represented by Chinese brands, if we speak about the earlier retail showrooms of the American and European brands, they have been rebranded and selling Chinese cars.”
Experts believe that at present, there may not be any significant presence in Russia by Indian automakers, and some may even want to play it safe by not upsetting their European and American operations. A future possibility of Indian carmakers exploring Russia as a potential export hub or setting up regional manufacturing for the local market is still an attractive possibility, given the historical close ties between the two countries.
