Market potential: promising areas for Indian exports to Russia in 2024

Merchandise trade between Russia and India reached 65 billion dollars in 2023. The Russian-Asian  Business Council expects this figure to hit 100 billion dollars by 2030. 

A supplier you can rely on

Interfax has reported on the promising direction of Indo-Russian trade relations, quoting Russia’s then Deputy Prime Minister and Minister of Trade and Industry Denis Manturov as declaring Russia’s intention to apply the most-favoured nation (MFN) principle to trade flows from India. “We consider India to be a reliable supplier of components and equipment for road construction and the chemical and pharmaceutical industries,” said Manturov.

A significant share of exports from India to Russia falls under the categories of plastics, pharmaceutical products, railway components, tram components, and electrical and electronic equipment.

“India has a wide range of products that can be exported to Russia,” says Olga Kulikova, a business ambassador for Business Russia in India. Key categories include:

• chemicals
• foodstuffs
• electronics
• consumer goods
• pharmaceutical products

Kulikova believes that these are just some of the product categories that are suitable for the Russian market. “In fact, the spectrum could be much broader, as Russia imports many commodities from China and other countries that could be replaced by products from India. That said, when initiating supply from India, it is important to keep in mind Russian import requirements and company standards to ensure that the partnership is successful and the needs of Russian consumers are satisfied.”

Imports to Russia

Source: Rosstat

Let’s get into some specifics relating to the products in greatest demand.

Medicines and medical equipment

Russian pharmaceutical manufacturers import more finished drug products and pharmaceuticals from foreign pharmaceutical developers every year. In 2023, India outpaced Germany to become the country’s largest supplier. Around 293.9 million packages of Indian medicines were imported into Russia last year – almost 3% more than the previous year.

The Russian government has taken numerous steps to facilitate pharmaceutical imports:

• A simplified procedure for the registration and import of medicines into Russia has been introduced and extended until 2025.

This procedure primarily covers the registration of medicines that are equivalent to those already available on the Russian market, and import authorisation for originator drugs with labels in a foreign language.

• The timelines for government registration and expert assessment of drug product quality have been reduced by 30 days. An interdepartmental commission provides a list of medicines that can be imported under the simplified procedure.

Imported medical devices must undergo government registration. Devices must be entered into the Registry of Medical Devices. If the registry already contains information on a device, it can be imported into Russia and traded by any importer. If a device model has never been supplied to Russia before, then samples of the device must be provided in order for the registration procedure to take place before delivery of the entire consignment. In addition to standard documents like the invoice and contract, customs clearance will require the importer to provide the following documents:

• Marketing authorisation
• Certificate or declaration of conformity
• A licence issued by the Ministry of Industry and Trade of the Russian Federation or evidence that the device has been included in the Single Registry of High-Frequency Devices (HFDs) or Radio-Electronic Means (REMs) of the EEC, if the device falls under these categories.

Chemicals

Indian companies are already supplying organic compounds and phosphorus-based products to Russia, including fertilisers, additives for lubricants, and chemicals for the mining industry. The list of chemical products urgently needed by Russian industry includes dozens of organic and inorganic compounds; for example, titanium dioxide (pigment), Terephthalic acid (TPA), polyvinyl chloride (PVC) polymerisation catalysts, and more. This represents a significant opportunity for importers.

Before concluding a supply contract, importers planning to deliver to Russia are advised to consult with market experts or the regulatory authorities as to whether the import of a chemical is possible and whether any problems are likely to arise during customs clearance.

The Trade Representation of Russia in India or its office in Mumbai can provide this information.

Foodstuffs

Along with citrus, root vegetables, and stone fruits, Russia imports onions, cabbage, garlic, salads, dried vegetables, melons, watermelons, papaya, and other crops. At the beginning of 2024, imports of fruit and vegetable products increased by up to 30% in some categories; in particular, tomatoes by 29.2%, dried vegetables by 27.4%, and root vegetables by 21%. Imports of cabbage, onions, and garlic increased by more than half.

India is one of Russia’s key suppliers of fruit and vegetables. In particular, a significant portion of Indian imports in 2024 has consisted of grapes and raisins, with 14,700 tonnes delivered since the beginning of the year, dried vegetables (2,300 tonnes), and bananas (100 tonnes). Raw tobacco and tea imports were also considerable. The Federal Service for Veterinary and Phytosanitary Supervision (Rosselkhoznadzor) is currently in negotiations over imports of potato and pomegranate, which is also of interest for Indian suppliers.

Information on the categories of agricultural products authorised for import is available on the Rosselkhoznadzor website.

Consumer Goods

India is a manufacturer of textiles, shoes, clothing, home appliances, cosmetics, tableware, and household goods, which are product categories that are traditionally in demand in Russia.

Indian manufacturers wishing to do business on the Russian market in this sector will mainly be competing with Chinese manufacturers.

“India could be a much more active partner on the Russian consumer goods market, which is one of the most open in the world,” claims Aleksandr Borisov, Chair of the Council for the Development of the Consumer Market and the Chamber of Commerce and Industry of the Russian Federation.

Borisov gives the following recommendations for entering the Russian market:

• Conduct thorough research on what potential niches Indian goods could fill
• Be rigorous in selecting your price segment
• Find reliable partners who will help you gain an understanding of your new market and use the rupees they accumulate in Russia to set up mutual payments

Importing electronics

An analysis of the export of electronics from India to Russia reveals that currently the main exports in this sector are electrical equipment and spare parts, sound recording and reproducing equipment, and electronic devices for recording and reproducing TV image and sound. 

A simplified procedure for importing electronics and equipment is in force in Russia until the end of 2024. The new rules allow industry associations, including the Electronics Developers and Manufacturers Association and the Information & Computer Technologies Industry Association, to prepare any necessary notifications.

As a result of another change, customs authorities no longer require notification of the import of technical equipment if it is used as a component for industrial manufacturing of equipment in Russia.

A fixed customs fee has been in force in Russia since 2023 for those legal entities that import electronics, gadgets, and telecommunications equipment. The fee does not change regardless of the consignment size and amounts to 30,000 roubles (about 30,000 INR at the exchange rate on 20.06.2024). 

Key takeaways

“Factors that may encourage Indian business on the Russian market in 2024 are the development of logistics and trade infrastructure between the two countries (including solutions for the North–South Transport Corridor), the lowering of customs and other trade barriers, and the growth of demand for Indian goods and services in Russia,” says Olga Kulikova. So, it’s down to importers to know how to promote their goods on the Russian market, orchestrate their marketing strategy, and explain to Russian consumers what it is that makes Indian goods a cut above the rest.