Bilateral trade with CIS countries could touch US$35bn by 2022
While apprehending about deceleration in India’s exports which have been declined for the 13th month in a row, President PHD Chamber, Mahesh Gupta expressed his view that there is enough scope to enhance our exports towards CIS countries of which Russia is a good opportunity at this juncture.
According to him though India and Russia have eventually given new dimensions to bilateral relations in the development of defense, energy, science and technology, however, current level of bilateral trade at around US$6bn is not consistent with the potential trade trajectory. Even though the bilateral relations between the two nations have widened their basket, yet India is not among Russia’s key trade partners.
India’s share in Russia’s total trade is 1.2% as compared with 49% of EU and 3.3% of USA. Russia’s share in India’s trade is meager 0.8% as compared with 12% of EU and 8% of USA.
There is an enormous untapped potential in bilateral trade between the two nations and especially in the food items viz. meat, fruits, vegetables, dairy products and tea among others, said Dr. Mahesh Gupta.
Russia imports US$23bn worth of food items from world including meat and edible meat, fish, edible vegetable nuts, edible fruit, dairy products and eggs among others of which EU contributes around 30% with the export of US$7bn of these food items to Russia. However, India’s share in these items in Russia’s imports is less than 2% with US$0.46bn.
Also India has huge potential to enhance its exports of tea in Russia where already it has significant presence. India with 18% share, presently exports tea amounting to US$114million to Russia of its total imports of US$646 million from the world.
Prospects for growth of trade hint that bilateral trade between the two nations could touch the levels of US$20 billion in the next 7 year by 2022.
The bilateral trade of India has also not grown commensurately with CIS countries.
Presently, the bilateral trade between India and CIS region is at around US$10bn which constitutes 1.3% share in India’s total trade. While, bilateral trade between the two could touch US$35bn by 2022.
However, India has to focus on the strong distribution network which is very crucial to serve the Russian market promptly. For this, India can set up affiliates/offices as nodal agencies for several sectoral products to build connections with the Russian domestic suppliers.
India should enhance efforts to promote ‘Brand India’ by frequently organising India Trade Shows in Russia and connecting Russian prospective buyers and Indian suppliers through Buyer – Seller meets, said Dr. Gupta.