USA, EU sanctions on Russia provide an opportunity for Indian exporters: FIEO

The Dollar Business Bureau | @TheDollarBiz  Though India has lost share in several major export sectors to Russia in the last 10 years, the decision by USA and EU to impose sanctions on Russia may help open new avenues for Indian exporters, says M Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO). Despite strong bilateral ties, trade between India and Russia remains stunted. According to the Ministry of Commerce, trade between the two countries stood at around $6 billion in FY2013-14, which is a fraction of India’s total annual trade of around $764 billion, and there are 33 countries with which India does more trade than Russia.

M. Rafeeque Ahmed, President, FIEO

The FIEO President says that this is mainly because India does not account for any major imports by Russia. “Unfortunately, we have negligent or nil share in few major imports in Russia like Machinery ($57 billion), Electrical and Electronic Components ($35 billion), Plastic Goods ($11 billion) and Medical & Optical Goods ($10.8 billion),” M Rafeeque Ahmed says. Moreover, India has lost share in key traditional sectors such as Pharma, Tobacco, and Tea & Coffee. According to FIEO, India’s share in Pharma exports to Russia declined from 8.2% in 2001 to 5.8% in 2012; Garments from 3.2% to 1.8%; Organic Chemicals from 6% to 2.4%; and Inorganic Chemicals from 6.5% to 0.3%. However, sanctions on Russia by USA and Europe and Russia's response present an opportunity for Indian exporters in new sectors. M Rafeeque Ahmed says that opportunities exists in footwear, rubber goods, furniture, lightening equipment, poultry, meat products and dairy products. The FIEO President adds that India’s quality and competitiveness will be tested (Read: Russia rejects Indian consignment of rice) and hopes that the “Made in India Show” in Russia during 24-26 September 2014 will help boost India’s exports to Russia. The FIEO President also says that Indian exports have done reasonably well in first four months of FY2013-14, showing a growth of 8.62% in April-July, 2014, and reaching $107.8 billion. “We would be able to cross $350 billion mark in FY2014-15,” he adds.    

This article was published on August 23, 2014.