Indian textiles, pharma and cosmetics are viewed positively in Russia
Olga Kulikova, Business Ambassador to India and member of General Council of All-Russia Public Organisation “Business Russia”, opines that Indian programs like Make in India should create investment attractiveness for Russian business tycoons. However, she admits there is a lack of awareness regarding these initiatives of the Indian government in the Russian business community.
IBT: What is your take on the current stature and trajectory of Indo-Russian trade relations? How can these be bolstered in the future?
Olga Kulikova: Currently, Russia-India relations have a high potential but are complicated. Considering the geopolitical issues, interest in the Russian Far East and COVID-19 experience (cooling of relations with China and relocation of production) in the near future, we should expect an increase in trade between Russia and India.
IBT: What impact has COVID-19 had on bilateral trade? What areas can the two countries explore to reconstruct their economies in a mutually beneficial manner?
Olga Kulikova: COVID-19 has led to the decline in Russia-India trade as well as international trade. It is difficult to single out areas, because in a crisis, almost any company can benefit – so, I am sure that we need to support SMEs as they contribute about 30% to the economy. They are also the backbone of the economy in terms of sustainable growth. If we talk about big private and state companies, I believe that the Russian Far East has the prospect of becoming a field for a new level of cooperation between India and Russia, as long as the infrastructure gaps are filled. This process should activate business activity from two sides.
IBT: What are the major sectors where Russia is looking to enhance exports to India? Conversely, what are the critical sectors where you see scope for Indian companies in Russia? What key nuances of the Russian market should Indian companies be wary of?
Olga Kulikova: The major Russian export items are agriculture, fertilizers, building materials, food and IT solutions. For India I think the most prosperous are pharma, Ayurveda, textile and leather.
The brand of India and Indian goods are perceived positively in the Russian market, especially when it concerns pharmaceutical products, textiles and cosmetics. For an Indian company to successfully conduct business in Russia, it is best to solicit support of business communities like Business Russia and Russian Export Center. If you send emails or make cold calls directly to the company, you probably will not get an answer.
Among the nuances, do not be late for meetings and you should know that a smile is not common for Russian businessmen and it does not mean they do not like the partner. I suppose other nuances are very typically European.
IBT: Of late, the Indian government has been taking a series of initiatives to project itself as an attractive manufacturing hub. What investment opportunities does this present for Russian companies in India?
Olga Kulikova: Surely, Indian programs should create investment attractiveness, but I would like to highlight a problem of lack of awareness. Information about Indian programs is poorly presented among Russian sources of information and business communities. As long as this problem is not resolved, the desired fruits of these initiatives will not be materialized.
IBT: What are the areas where both governments can collaborate to improve bilateral ease of doing business?
Olga Kulikova: To improve bilateral ease of doing business, we should help Indian companies enter the Russian market (and vice versa) and successfully conduct business. The most common problems that business faces while starting to function in the Indian or Russian markets are low level of awareness, absence of a coordination institute and lack of legal and financial issues understanding. We could resolve this issue by single window service: setting up a single institute (platform) for consulting, market entrance, promotion and projects implementation. Now we have launched such a platform and we are in the process of attracting the attention of authorities, associations, and investors to increase their involvement in the development of business relations.
IBT: How do you see trade and investment shaping up for both countries over the next decade in the emerging post-COVID international scenario?
Olga Kulikova: Relations with China will change towards cooling, especially if we are expecting the second wave of COVID-19. I expect that some of the enterprises will be relocated from China to India – here it is important that India creates favourable conditions for this scenario to get the maximum benefit.
Investment activity is directly depending on the degree of damage to the economy and on the consequences of the second wave. Most likely, the level of investment will be reduced, but the vector of investment will be directed to the medical sector.
Olga Kulikova is the Business Ambassador to India and member of General Council of All-Russia Public Organisation “Business Russia”. In the past, she has served as a Lawyer and Oil Upstream Project Lead (2005-09). This was followed by her stint as the Head of Legal Department in Moscow Branch (2009-12). Since 2016 – 2019, she has been associated with General Director’s Council.