A delegation of over 20 leading executives from India’s leather sector is set to embark on a significant business mission to Russia later this month, aiming to explore and capitalise on emerging export opportunities. The three-day visit, organised by the Council for Leather Exports (CLE), will commence on August 26, 2024. R Selvam, Executive Director of the Council for Leather Exports, highlighted the immense potential for expanding India’s leather exports to Russia, which currently range between USD 60 million and USD 80 million annually.

“Although our current export figures are modest, we see substantial opportunities in Russia. We aim to attract investments, forge technology collaborations in tannery and product manufacturing, and boost exports in areas such as leather garments, goods, and footwear,” Selvam stated. The delegation’s itinerary includes participation in the prestigious Euro Shoes Premier Collection, an international fair held in Moscow. This platform is expected to provide Indian leather exporters with an excellent opportunity to showcase their products and engage in meaningful business discussions with Russian counterparts.

Despite the significant opportunities, Selvam acknowledged challenges in the form of payment issues stemming from Western sanctions imposed on Russia due to the ongoing Russia-Ukraine conflict. He noted that exporters dealing in the Indian Rupee can continue to ship goods, although the non-issuance of Bank Realisation Certificates (BRC) by Indian banks remains a concern. This is primarily due to sanctions on the Russian SEBR Bank by the US Office of Foreign Assets Control (OFAC).

In response to these challenges, India and Russia are actively discussing mechanisms to conduct trade in local currencies and reduce non-tariff barriers, a move that could significantly enhance bilateral trade relations. The two nations have set an ambitious target to increase bilateral trade to USD 100 billion by 2030, focusing on sectors like electronics, shrimp, and pharmaceuticals, in addition to leather. Currently, bilateral trade between India and Russia stands at approximately USD 67 billion.

India’s exports to Russia reached USD 4.3 billion in 2023-24, while imports were dominated by crude oil, totaling USD 61.4 billion. The substantial trade deficit of USD 57.1 billion underscores the importance of diversifying exports, with the leather sector poised to play a key role in this endeavour.