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Vladimir Putin lays down the red carpet to welcome Indian companies in Russia

Rahul Gupta by Rahul Gupta
3 August 2022
in Economy, Trending
Indian companies
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Russia’s special operations in Ukraine are proving to be a boon for India. After exporting crude oil with a highly competitive price, Russia has now started to become the preferable destination for Indian companies.

Unending sanctions of European and American nations forced multiple western companies to pull out their businesses from Russia. Dozens of companies that were operating in consumer, energy, finance, food, media, services, tech, travel, logistics, and manufacturing business closed their operations in Russia. Considering this pull-out, Russia has laid down the red carpet for Indian companies to fill the void left by western companies.

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Indian companies are on a spree of signing deals with Russia

After the exodus of European, American, and Japanese companies from Russia, Indian companies are on a spree of taking a giant leap in Russian businesses. Reports suggest that from pharma companies to consumer goods firms, Indian companies are on a spree of signing deals with businesses of Russia.

Talking to Bloomberg, Srijit Dasgupta, the financial officer of Berger Paints, said that after the multinational paint companies pull out, a significant opportunity arrived for Berger Paints in Russia. Dr. Reddy’s Laboratories Limited, one of the largest pharma companies in India, has a basket of 40 products and more than 800 employees in Russia. Considering the pullout of other drug-makers, Dr. Reddy’s is expected to gain market share in the Russian pharma market.

India’s coffee exporter, Continental Coffee Limited, has started to expand its business in the Russian coffee market. Also, due to western sanctions, many European coffee exporters are choosing Indian partners to tranship their products to Russia. In a way, Indian businesses have become the centre point of export to Russia.

Russia’s biggest food retailer, X5 Group, has started to expand its trade with India for its 18,000 departmental stores. They are planning to import Indian goods like drinks, canned food, kitchenware, seafood, and rice.

X5 has requested an annual supply of 200,000 kg of tea and coffee, 8,000 tonnes of seafood, 2,000 tonnes of rice, 1.6 million women’s hygiene products, 150,000 cooking ware items, 80,000 units of textiles, 1.5 million bottles of shampoo, and 5 million packs of laundry detergent, besides other items from Indian manufacturers and wholesalers.

West-out India-in

About 40 countries, representing more than half of the world’s economy, have adopted various types of sanctions against Russia. Also, over 1,000 companies have left the Russian business and its market.  The Companies that have announced to suspend of their businesses are:-

  • In consumer goods and retail business – Adidas, British American Tobacco, Canada Goose, Uniqlo, H&M, Ikea, Nestle, Nike, TJX, and Unilever
  • In Energy Sector – British Petroleum, American company ExxonMobil, and British oil and gas company Shell
  • In the Finance Sector – American Express, Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, MasterCard, Visa Card, Western Union, and Western Insurance Group
  • In Food Sector – Carlsberg, Heineken, Little Caesars, Mars, McDonald, PepsiCo, Burger King, Starbucks, and Yum Brands have closed their 70 KFC and 50 Pizza Hut Restaurants
  • Media Companies like Bloomberg, Netflix, Sony, Walt Disney, and Warner Bros have also suspended their business in Russia.
  • Tech companies that have shut their businesses are Amazon, Web Services, Apple, Cogent, Ericsson, Google, IBM, Intel, LG, Microsoft, and Nokia.

Also Read: India-Russia are establishing the modern-day silk route

These sudden pulls have created a huge void in Russian markets. In wake of the situation, Russian President Vladimir Putin had raised various special requests to India and its companies to fill the gap. In June’s BRICS Business Forum meeting, Vladimir Putin had pitched to reroute its trade and oil exports toward India and other BRICS countries. He had advocated opening Indian supermarket chains and cooperating in other sectors to increase its presence in the Russian market.

Till 2021, India’s business with Russia was dominated by the defence sector. More importantly, business was highly in favour of Russia. In Financial Year 2021, India exported $2.6 billion and imported about $5.5 billion worth of goods and services from Russia. The increasing trade will not only help in mitigating the trade deficit but also will diversify India’s relations with Russia. The increasing presence of Indian companies in Russia will boost India’s export in the world.

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