Import and Export opportunities to tap with $100 Billion Trade Deal signed by PM Modi and Vladimir Putin Between Russia and India

A strong foundation has been laid down between the two nations after India’s Prime Minister Narendra Modi’s official visit to Russia with President Vladimir Putin to promote bilateral trade and economic relations with a trade roadmap aimed to achieve a 100-billion-dollar (Rs. 8.34 lakh crore) target in annual trade volume by 2030. This is one of the greatest import and export opportunities that every import export businessman should consider for expanding business.

The Goal is to improve 

1. Import Export Trade Structure
2. Trade Procedures/Processes
3. Emphasising transactions in Indian Rupees (INR)
4. Offering Duty benefits, and 
5. Enhancing logistics support
6. Focus on “Make in India” products

Why does India want India-Russia Trade Volume, Growth and Balance to go to next level?

1. India- Russia Trade reached a record USD 65 billion in 2023.
2. A significant trade growth of 66% in the previous year and an additional 20% trade growth in the first quarter of 2024.
3. India faced a trade deficit of $57 billion with Russia in 2023-2024 period.
4. Hence India is aggressively looking forward to increase Export to Russia.

Major Decisions and Initiatives

1. Removing Trade Barriers: Both India and Russia aim at removing barriers to facilitate smoother trade.
2. Local Currency Exchange: Introduction of a system for transactions using Indian Rupees (INR), to reduce dependency on the US dollar and manage exchange rate risks.
3. Simple Customs Procedures: To speed up the process and movement of good trade between India and Russia by simplifying custom procedures.
4. Improved Connectivity Routes: Developing new maritime and land transport routes such as:
   
   
   • Chennai-Vladivostok maritime route
     
     
     
   • Northern Sea Route, and 
     
     
     
   • International North–South Transport Corridor via Iran
     
     Image Sources – Internet
     
     
5. Investments in Energy and Infrastructure: Focus on increasing investments in the energy sector and infrastructure development to support trade growth.
6. Diplomatic Expansions: To strengthen diplomatic relations between India and Russia opening two new consulates in:
   • Kazan and 
   • Yekaterinburg
7. Memoranda of Understanding (MoUs): Signing of 22 MoUs across various sectors including: 
   • MoU on Climate Change, 
   • MoU on Legal Arbitration, and 
   • MoU on Pharmaceutical Certification.
8. Business Engagement and Relations: Organising B2B meetings, business promotion events, and exchange of business delegations to improve commercial relationships.

Trade Dynamics Import and Export opportunities

1. Trade in INR: A Game Changer

A key feature of this trade roadmap is trading in Indian Rupees [INR] to reduce dependency on the US dollar, lowering transaction costs and risk of exchange fluctuations. For Indian exporters to grow their businesses by providing a stable revenue line, creating a favorable environment for business expansion.
Takeaway : Learn offering the Price with Incoterms (CIF or FOB) to be prepared in INR instead of $ (USD)

2. Duty Benefits: Making Trade Easier Both India and Russia have agreed to offer duty benefits on different types of goods to promote trade. These exemptions and reductions on import duties will provide Indian products a more competitive edge in the Russian market, encouraging exporters to explore and expand their offerings.
Takeaway: Keep an eye on exemptions/benefits Govt will announce. Import Export Federation will duly announce it as soon as it is declared!

3. Logistics Support: Smooth Functioning of Supply Chains Effectiveness

Improved logistics support is a focus of this roadmap. By improving transportation and infrastructure links, the time and cost associated will be significantly reduced with shipping goods between India and Russia. The efficiency of logistics is expected to enhance the overall competitiveness of Indian exports.

Takeaway: Study 3 different trade roots mentioned above and identify based on your location in India how logistic costs can be improved to get more profit.

What products to focus now on for Indian Exporters?

With a strong connection to a prominent supermarket chain in Russia, the Import Export Federation is in a prime position to leverage these opportunities. Here are some promising products to consider to make out of all the Import and Export opportunities:

1. Agricultural Products: Coffee, tea, mate and spices.
2. Textiles Industry: Cotton, wadding, felt, nonwovens, yarns, twine.
3. Engineering Products: Machinery, nuclear reactors, boilers.
4. Fertilizer, Food Products, Energy Oil and Coal
5. Organic Chemicals and Inorganic Chemicals
6. Pharmaceuticals Products
7. Iron and Steel
   

Top 10 Beneficial Steps to get maximum out of all Import and Export opportunities

1. Research the Market: Understand the demand and preferences of Russian consumers.
2. Establish Connections: Leverage the Federation’s network to establish relationships with Russian importers.
3. Utilize Duty Benefits: Take full advantage of duty reductions to price your products competitively.
4. Trade in INR Transactions: Reduce currency risk by trading in Indian Rupees.
5. Product Quality: Products should meet the required quality standards in the Russian market.
6. Packaging Quality: Packaging should appeal to the Russian consumers and it should protect goods during transit.
7. Logistics Function: Optimum utilization of the improved logistical support ensures smooth, timely and cost-effective delivery.
8. Comply with Regulations: Stay updated on Russian import regulations and ensure compliance.
9. Promote Your Brand: Engage in marketing activities to build brand recognition in Russia.
10. Get Expert Advice: Partner with trade experts and utilize the Federation’s resources for guidance.

The Import-Export Federation recognizes the immense potential in this strengthened trade roadmap. Our Federation, with strong ties to a leading supermarket chain in Russia, is perfectly positioned to capitalise on all the Import and Export opportunities. We are always eager to hear about the products a new exporter wishes to export to Russia in our Export Business Launcher Masterclass.

For those committed to mastering the entire export cycle to completing the billion dollar opportunity export shipment we have a flexible in-depth online export course and guaranteed support for your first shipment all the Import and Export opportunities.

Media References 

1. ‘India-Russia trade target of $100 billion realistic’ – The Hindu (July 10, 2024)
2. INDIA AND RUSSIA TO BOOST BILATERAL TRADE TO $100 BILLION BY 2030 – Optimizeias  (July 10, 2024)
3. India, Russia set $100 billion target in bilateral trade by 2030 after Modi-Putin meet Telegraph India (July 10, 2024)