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Exports to Russia pick up after a stalemate, new orders on the rise

Senior executives with export bodies told FE that they have received “a lot of enquiries” from Russia. This has prompted them to step up engagement with Russian importers so that, in the event of a cessation of violence in Ukraine, goods can be despatched swiftly.

Ajay Sahai, director-general of the apex exporters’ body FIEO said, “We are also organising interactions between Russian importers and Indian exporters. This is at an initial stage. One thing that is very clear is that Russia is interested in getting many products from India at this point of time. Lets’ see how the situation pans out.”

Domestic exporters are rushing to firm up deals with Russia, as a surge in Moscow’s interest in Indian goods —mainly farm commodities, pharmaceuticals and marine products — has somewhat revived bilateral trade momentum that was disrupted by the war in Ukraine.

Senior executives with export bodies told FE that they have received “a lot of enquiries” from Russia. This has prompted them to step up engagement with Russian importers so that, in the event of a cessation of violence in Ukraine, goods can be despatched swiftly.

Ajay Sahai, director-general of the apex exporters’ body FIEO said, “We are also organising interactions between Russian importers and Indian exporters. This is at an initial stage. One thing that is very clear is that Russia is interested in getting many products from India at this point of time. Lets’ see how the situation pans out.”

In a communication to its members on April 7, state-backed pharma export body Pharmexcil has said the Indian embassy in Moscow has been approached by Russian firms. “While some of them required assistance in getting suppliers of some particular pharmaceuticals, others are interested in distributing them,” it said. The Russian companies that have shown interest include New Technologies, Pharmstandard, Appolo, Pharmamed and Simkodent.

While farm products made up 18% of India’s $3.2-billion exports to Russia until February last fiscal, pharmaceutical products accounted for almost 15%.

India still had a goods trade deficit of $5.5 billion with Russia between April and February of FY22.

Indian exporters have been keen on the resumption of trade after payments for the goods shipped to Russia — before the war broke out in late February — started to flow in recently, ending weeks of uncertainties. Russian importers have resorted to payments in the euro through non-sanctioned banks there. Subsequently, the correspondent Indian banks have released payments to relevant domestic exporters after converting the currencies to rupees. This payment mechanism will continue for now, as New Delhi has denied the possibility of undertaking the rupee-rouble trade.

However, exporters are also conscious of persisting logistics challenges that are hampering any bid to supply to Russia now. Major shipping lines are rejecting bookings to and from Russia, and only very limited Indian supplies are reaching Moscow through Georgia port. However, they hope that once the war draws to a close or ceasefire is announced, supply-chain disruptions will also ease.

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