Feb 15 | 2018
Like Russia, India is a major player when it comes to global food and drink supplies. Both nations have much in common – and a strong trade relationship that is heightening year-on-year.
Indian foodstuff producers have a lot to offer Russia. It is a key consumer of some of India’s top export products – and Russia’s recent ban on goods from the EU, Norway, Australia, and the US means it has had to look elsewhere for supplies of in-demand products. This has all played into India’s hands. Let’s see what Russian importers are buying from Indian firms – and the prospects for Indian food and drink throughout Russia. India: a leading global food & drink supplier Between January-October 2017, India exported foodstuffs worth approximately $26 billion. The nation exports large volumes of meat and poultry, fish and seafood, and dairy products. It also exports billions of dollars’ worth of fruits, vegetables, spices and tea and coffee annually. Taking a look at India’s biggest import categories, between Jan-Oct 2017, reveals some impressive export figures: • Fish & seafood - $5.3bl • Meat & offal - $3.3bl • Tea, coffee & spices - $2.7bl • Fruits (incl. grapes, mangoes, oranges, bananas, apricots & avocados) - $1.5bl • Vegetables (incl. cucumbers, lettuce, onions, tomatoes, spinach & carrots) - $983.4m Many of these items are big favourites in Russia, so how much food does Russia import from India? Russia imports $460m worth of foodstuffs from India Russia’s imports of Indian food and drink items totalled $459.7m in 2016 – roughly 1.7% of India’s full exports. Tea and coffee is by far and away the biggest product group, with total imports amounting to $175.3m (including extracts used in food production). Split individually, Russia bought tea worth $103m during 2016, with coffee imports totalling $7.96m. Indian tea and coffee producers were well represented at WorldFood Moscow 2017, with Tea Board India, Premier’s Teas Ltd, and the Coffee Board of India all in attendance. Tea in particular couldn’t be more of a Russian drink. It’s ingrained in every day life in Russia, with 187,590 tons of the drink consumed every year. Total annual tea and coffee imports total nearly $2.9 billion across the Russian Federation, showing the potential power of Russia’s import market for hot drink producers. Up next is frozen shrimp and prawns, of which Russia imported $42.4m worth in 2016. Crustaceans are amongst India’s top food export items – and Russia has the seafood import sector to match. $1.3 billion worth of seafood makes its way into Russian consumers’ hands each year, with $202m spent on frozen shrimp and prawns. Other popular import product groups include: • Rice - $32.8m • Grapes - $28.3m • Frozen boneless beef cuts - $19.1m • Ground nuts - $9.36m • Pickled foods (incl. cucumbers & gherkins) - $7.3m A whole host of sectors open to Indian suppliers in Russia India benefits from not being under embargo when it comes to supplying Russia with food. That means it’s entire food industry, from major categories like meat and poultry, through to specialist products, such as herbal or flavoured teas, are free from import restrictions. This opens up a vast number of options for Indian exporters. Russia’s total imports of food and drink items came to $27.9 billion in 2017 – the first signs of import growth for three years – showing how the nation still looks beyond its borders for quality foodstuffs. India-Russia free trade deal in the works following rising trade Away from the pure food trade, India and Russia’s trade relationship has been tightening in recent years. This has resulted in more trade activity between the pair. In 2017 it jumped up 22%, reaching a new total of $7.4 billion. 2025’s target is to raise bilateral to $30 billion. A new free trade agreement between the Eurasian Economic Union (EAEU), of which Russia is by far the largest member and economy, and India is being discussed. Initial talks took place between January 30-31 2018. If a deal is struck, it will make moving produce in and out of Russia a much easier prospect, with import tariffs and fees dropped or lowered. A “green” transport corridor, wavering customs inspections and procedures, has also been introduced from Southern Russia, through Central Asia, to India. Logistics connections between the two nations are strengthening. India and Russia’s robust trade relationship is set to grow stronger in the near future. Now is the time for Indian businesses to start growing their contacts throughout Russia.