Rupee-Ruble Trade Must Be Encouraged to Ease Doing Business: Indian Traders' Body

Amid the Russian military operation in Ukraine, many international brands have ceased trading in Russia. According to media reports, the Russian Council of Shopping Centres is negotiating with representatives in India, China, Iran and Turkey to find alternatives to western brands.

The Confederation of All India Traders (CAIT) said earlier this month that it sees a huge opportunity for Indian retailers to step into Russia — amid the exodus of western brands in the wake of an ongoing military operation in Ukraine.

Meanwhile, to fill that gap, Mumbai-based Beyond Squarefeet Advisory had initiated partnership talks between Indian retailers and Russian companies to open shops in Russia.

In an interview with Sputnik, CAIT General Secretary Praveen Khandelwal spoke at length about the opportunities for Indian retailers and why such a situation is a blessing in disguise for them.

Sputnik: What opportunities do you see for Indian traders or retailers amid the ongoing Russian military operation in Ukraine, now that many brands have pulled out of the market there?

Praveen Khandelwal: The situation between both the countries is unfortunate and I can only wish that it improves at the earliest.

However, this has opened the floodgates [for] opportunities for Indian brands and products to make inroads into the Russian market.

Earlier, the requirements of Russia were met by the USA, European Union, the UK and other Western Countries, but with a lot of sanctions in place there is now a huge gap which needs to be filled. This gap can be filled by Indian brands effectively.

The opportunity for India is immense because we share a long history of friendship with Russia and we have been a natural ally. Therefore, good Indian brands and quality products in different sectors will have a bright future for doing export to Russia.

Sputnik: How big is the market for India and which sectors should it focus on?

Praveen Khandelwal: Bilateral trade between India and Russia from April 2020 to March 2021 was $ 8.1 billion, out of which exports from India to Russia were $2.6 billion, while imports from Russia were $5.48 billion.

Purchases increased from both non-Commonwealth of Independent States (CIS) (40.6 per cent) and CIS countries (36.3 per cent). So, the numbers tell the whole story.

Therefore, there is no denying the fact that Russia can be a big market for India and Indian traders and businesses can reap big [dividends] from there.

As far as sectors which can gain a lot, they may include Fast Moving Consumer Goods (FMCG), consumer durables, packed food items, dairy, vegan food items, readymade garments, footwear, toys, textiles, auto spare parts both for two-wheelers and four-wheelers, automobile accessories, lubricant oils, motor oils, builders' hardware, tools, machinery products, computers and their peripherals, computer stationery, other stationery items, paper and some others.

Sputnik: Four Indian brands have signed an NDA (non-disclosure agreement) with Russian companies. Following this, a delegation of Russian investors and franchise owners is expected to come to India in May. How do you view this?

Praveen Khandelwal: The visit of the Russian delegation comprising investors and franchise owners is a welcome step and shall prove to be extremely positive, as this will pave the road for Indian brands and retailers to enter Russia.

However, I personally feel that during the military operation, all such visits should be backed by the Russian Government and every step must be taken to ensure that there should not be a default either on the quality of the goods or payments.

Apart from this, I think that if Indian brands enter the Russian market that will be a win-win situation for both the countries.

Sputnik: With Sanctions on Russia, there will be a considerable impact on trade. Should rupee to ruble trade be encouraged?

Praveen Khandelwal: Due to sanctions, the dollar completely lost its value during the war period. Therefore, the transactions in rupee-ruble should be encouraged to their optimum level.

It has been learnt that both the Russian and Indian Governments have agreed to set up a payment mechanism between the two countries on the pattern of Swift. It will certainly bring ease of doing business (EoDB) between the two countries.

Sputnik: What support do you expect from the Indian as well as Russian governments to encourage trade?

Praveen Khandelwal: Both nations must first identify the items that can be exported from India to Russia, with a short-term and long-term strategy.

A list should be made of those products which are required immediately, and the supply of [those] which got hampered by the exit of western brands or companies can be fulfilled.

However, another list of items for long-term requirement should be prepared and thus supply should be ensured.

It is also imperative on the part of Russia to supply crude oil to India at a discounted rate, which will foster more and better trade relations between the two countries.

On behalf of CAIT, that represents 80 million traders of India, and having more than 40,000 trade associations as its affiliates across the country, I can say we are well-prepared to become a bridge between Russia's demands and Indian supplies.