Indian Leather Sector Eyes Russian Market Amid Sanctions

Over 20 executives from India's leather sector will visit Russia to explore investment and export opportunities, despite payment challenges due to Western sanctions. The delegation will participate in the Euro Shoes Premier Collection fair in Moscow. India aims to boost bilateral trade with Russia to USD 100 billion by 2030.

Over 20 executives from India's leather sector are set to visit Russia this month in a bid to seek investments and tap into growing export opportunities.

The three-day trip, commencing on August 26, will include participation in an international fair—Euro Shoes Premier Collection in Moscow.

According to R Selvam, Executive Director of the Council for Leather Exports, India's current leather exports to Russia range between USD 60 million and USD 80 million, a figure poised for growth given the market potential.

'We're aiming to attract investment and technology collaboration in tannery and product manufacturing,' Selvam told PTI.

Despite payment issues due to Western sanctions on Russia, businesses dealing in Rupee can still ship goods. India's leather export rose from USD 44.84 million in 2022-23 to USD 62.48 million in 2023-24, although a decline was noted in the April-June period of the current fiscal year.

Payment problems, specifically the non-issuance of bank realisation certificates (BRC) by banks, have impacted exports, particularly following sanctions on Russia's SEBR Bank by the US Office of Foreign Assets Control. Due to these sanctions, several Indian banks are not issuing BRCs for payments from Russia.

Both nations are in discussions to conduct trade in local currencies and reduce non-tariff barriers, aiming to boost bilateral trade to USD 100 billion by 2030. India's bilateral trade with Russia currently stands at approximately USD 67 billion, with a significant trade deficit driven by crude oil imports.