India’s efforts to boost sagging farm exports has got a shot in the arm as Russia has agreed to drop a stringent condition that was obstructing Indian supplies of dairy products to that country, sources said, reports Banikinkar Pattanayak in New Delhi. Once formalities are completed, dairy majors like Amul and Mother Dairy will be able to take advantage of strong demand in a potentially big market.
Russia turned to India for imports of dairy products in 2014 after it had banned such supplies from the EU, Australia and the US, protesting against sanctions following its annexation of Crimea.
But supplies from India couldn’t take place as Russia put a rigid condition that the dairy products be made of milk procured from a firm having at least 1,000 animals, reasoning that large dairy units must have adequate system in place to check the quality of products.
However, after a recent meeting of the two sides in Dubai, Russia has agreed to do away with that condition, as Indian officials have conveyed that most of the dairy units in the country are small and mid-sized and can’t comply with the rule, one of the sources told FE. India, however, is leant to have assured them of quality of products.
An import protocol is expected to be signed soon with Russia’s Federal Service for Veterinary and Phytosanitary Surveillance, which will pave the way for Indian dairy product supplies to that country, the sources said.
Analysts say since Russia has imposed restrictions on imports of milk, dairy products, fruit, vegetable, meat, fish and several food items from the EU, Australia, US, Canada and some others, India can take advantage of the curbs and better tap the Russian market not just in dairy products but in a wide range of agricultural commodities. Russia was the largest importer of food products from the EU before the sanctions were imposed. According to an earlier report in the Russian media, Russia’s restrictions on food supplies from the EU could cost the latter a whopping $16 billion a year.
India’s farm exports to Russia, however, stood at just $487 million in 2014-15, representing less than 2% of its total farm exports and compared with $493 million a year before (without dairy exports). Once dairy majors are able to export and subsequently strengthen their position there, such exports will add $150-200 million in the first year itself to the overall farm exports from India, said analysts. Considering that India’s farm exports to Russia are negligible, there is a huge amount of untapped potential for the country, they added. India’s farm exports are expected to fall to $30-33 billion in 2015-16 from almost $39 billion a year earlier.
India is the world’s largest producer of milk, apart from being a big exporter of meat and marine products. However, exports to Russia have been mostly confined to tea, coffee, guar gum and processed fruit and vegetables.
Russian officials had earlier conducted inspections of milk processing units of Amul and Mother Dairy to explore the possibility of Russian imports of dairy items from them.