A Reuters report says India is keen to boost trade in this way, but some firms are reluctant over fears of sanctions
The requests were made weeks before Foreign Minister S Jaishankar’s visit to Moscow early November, when he met his Russian counterpart (right) Sergei Lavrov. File Pic/AFP
Moscow has sent India a list of more than 500 products for potential delivery including parts for cars, aircraft and trains, four sources familiar with the matter said, as sanctions squeeze Russia’s ability to keep vital industries running.
The list, a version of which has been seen by Reuters in New Delhi, is provisional and it is unclear how many of the items will eventually be exported and in what quantity, but an Indian government source said the request was unusual in its scope.
India looks to boost export
India is keen to boost trade in this way, said the source, as it tries to narrow a ballooning trade deficit with Russia. Some companies have expressed concern, however, about potentially falling foul of Western sanctions.
Also Read: Russia denies planning to give up vast Ukrainian nuclear plant
Indian imports from Russia have grown nearly five times to $29 billion between Feb. 24 and Nov. 20 compared with $6 billion in the same period a year ago. Exports, meanwhile, have fallen to $1.9 billion from $2.4 billion, the source said. India is hoping to boost its exports to nearly $10 billion over coming months with Russia’s list of requests, according to the government source.
An industry source in Moscow, who declined to be named because of the sensitivity of the issue, said Russia’s Ministry of Industry and Trade asked large companies to supply lists of raw materials and equipment they needed. The source added that further discussion would be needed to agree specifications and volumes and that the outreach was not limited to India.
Russia’s Ministry of Industry and Trade, and the Indian foreign and commerce ministries and the prime minister’s office did not immediately respond to requests for comment. Russia’s requests were made weeks ahead of Indian Foreign Minister Subrahmanyam Jaishankar’s visit to Moscow starting Nov. 7, two of the Indian sources said. It was not immediately clear what was conveyed by New Delhi to Russia during the visit.
Western sanctions have crippled supplies of some crucial products in Russia. Airlines are experiencing an acute shortage of parts because almost all planes are foreign-made. Car parts are also in demand, with global automakers having left the market. A source in Russia’s car sales industry said the trade ministry had sent a list of car parts needed to corresponding ministries and state agencies in other countries, including India.
Indian firms hesitant
But some Indian companies are reluctant to export to Russia over fears of being sanctioned by the West, the lack of clarity over payments and challenges to securing insurance.
“There is hesitancy among exporters...particularly on sanctioned items,” said Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO), a body supported by India’s commerce ministry.
Sahai, who is aware of Russia’s request, said even small- and medium-sized exporters who could meet some of the requests and had previously exported to Iran after Western sanctions, were not enthusiastic. Large Indian lenders are also reluctant to process direct rupee trade transactions with Russia, months after the mechanism was put in place, for fear of being sanctioned.
Boost to exports India hopes to achieve with Russia’s requests
Some of the items Russia wants
>> Car engine parts like pistons, oil pumps, ignition coils, bumpers, seatbelts, infotainment systems
>> For aircraft and helicopters, landing gear components, fuel systems, communication systems, fire extinguishing systems, life jackets, aviation tyres
>> Raw materials to produce paper, paper bags, consumer packaging
>> Materials and equipment to produce textiles including yarns and dyes
This story has been sourced from a third party syndicated feed, agencies. Mid-day accepts no responsibility or liability for its dependability, trustworthiness, reliability and data of the text. Mid-day management/mid-day.com reserves the sole right to alter, delete or remove (without notice) the content in its absolute discretion for any reason whatsoever