Looking East: Russia-India food & drink trade

India. Russia. Two massive countries; one by land, the other by population. Together, they represent the economies of the future.

But what about food & drink? Both nations share extensive agricultural and food manufacturing sectors, so how do they play off each other?

The trading relationship between the pair has been under international scrutiny for some time. It’s predicted that food & drink flows between these great countries will evolve as we head into the next decade and beyond.

With that in mind, we’ll examine the current state of play, the sectors where Indian companies can make the most impact on the Russian food & drink market, and Russia’s potential exports to India.

Russia and India’s food & drink trade

Indian food & drink in Russia

There are large selling opportunities for Indian food in Russia.

Indian companies make up a large chunk of the exhibitors taking part in every annual WorldFood Moscow exhibition. Why? Because of the opportunities for India-made food & drink products throughout Russia.

This potential can be shown in the fact that Indian foodstuff exports to Russia’s $28bn import sector are growing. They have been doing so across the last decade. The ongoing embargo on EU, US, Canadian, Norwegian and Australian produce is also helping accelerate export volume and values too.

How much are we talking here? Well, in 2017, India exported food & drink items to Russia worth a total of $630m. This is an encouraging 10.2% rise, compared with 2016’s volumes, according the MIT Atlas of Economic Complexity. For context, exports in 2015 were 5.8% smaller than in 2016. Growth is steadily occurring as the decade rolls on.

Of that $630m, there are a few standout items. The top five Indian foodstuffs in demand by Russian buyers are:

• Tea - $121m
• Tea & coffee extracts - $80.2m
• Frozen Shrimp & Prawns - $49.5m
• Grapes - $40.5m
• Ground nuts - $39.7m

Together, those five product groups represent 52% of India’s total Russia-bound food & drink exports.

Tea: a major export commodity for Indian producers

Russia is the largest importer of tea worldwide, including Indian tea.

Let’s start with tea. Russians are big tea drinkers, and in fact, retailers and wholesalers source a quarter of all of Russia’s $512m annual tea imports from Indian producers. The Indian Tea Board are regular fixtures at WorldFood Moscow for that exact reason.

Russia is the world’s fourth largest tea consumer, responsible for 9% of worldwide tea imports, making it the single largest importer of tea globally. With 94% of Russians drinking tea regularly, essentially every day, it could be argued that this hot drink is Russia’s true national beverage.

Tea & coffee extracts, used in ingredients as well as for health supplements, is also a fairly lucrative market for Indian firms in Russia.

Seafood heads up other top export prospects for Indian food & drink producers in Russia

Shrimp and prawns are in high demand in Russia.

India’s shrimp and prawn catch makes it a global powerhouse, when it comes to worldwide seafood supplies. Russia is no stranger to such products, with frozen Indian products registering highly with the attention of Russian seafood specialists.

As of 2017, India actually holds the joint largest Russian market share of imported shrimps and prawns. Alongside Greenland, it controls 17% of the import market.

Seafood is in an interesting position in Russia right now. Currently, consumption floats at around 22kg per person. Crustaceans, like prawns and shrimp, are the second most popular product on the seafood import market. Russia imported $290m worth in 2017.

Russia offers more opportunities for foodstuff exporters in India

Russia is opening up its food & drink market to more Indian products.

 We briefly touched on the fact that India is free from sanctions facing EU, US, Canadian, Norwegian and Australian food & drink companies.

If you are unfamiliar with the current Russian embargo, producers in the aforementioned countries cannot export fruits & vegetables, meat & poultry, and dairy products to Russia. This means substantial supply gaps have been opened up on the Russian market for countries around the globe to fill.

India, with its rising exports, is well placed to build on its current momentum, and start boosting its exports in key sectors Together, fruits & vegetables, meat & poultry, and dairy represent $8.5bn in Russian imports.

A closer trading relationship between India and Russia

India and Russia are pursuing closer a tighter trading relationship.

Plans are afoot to massively increase overall trading between India and Russia.
Bilateral trade, incorporating all merchandise, not just food & drink, is currently valued about $9.3bn, and is rising at a rate of 20% year-on-year.

Now, both nations have committed to increasing their bilateral trade volumes to $30bn a year. Food & drink has been identified as one of the potential sectors. Additionally, food production equipment and machinery is one area both nations are keen to expand, so there is a lot of activity in the pipeline to be aware of.

A quick look at Russian food & drink exports to India

As it stands, India is not a major export market for Russian food items. As of 2017, they held a value of $163m – just under a sixth of India’s respective exports.

Of these, it’s dried legumes, such as peas and chickpeas, and wheat that form the largest chunk of these shipments. Each of these product groups holds a 52% and 43% share of the market.

As mentioned above, however, both Russia and India want to improve the volumes of their foodstuffs passing between both states, so it will be interesting to see what happens in the near future.

WorldFood Moscow: gateway to Russia's food & drink market

WorldFood Moscow, the largest food & drink exhibition in Russia and the CIS, is the place to meet the buyers searching for chocolate, sugary sweets, baked goods and all confectionery items.

Over 30,000 professionals, from specialist importers, catering companies, HoReCa sector members, retailers, and wholesalers attend each show – all looking to increase their supplies of key foodstuffs and meet their manufacturers.

As an exhibitor, WorldFood Moscow provides the perfect platform for you to enter the Russian food supply chain, start exporting, and grow your sales in a $28 billion import market - $40bn for the whole CIS.

Want to take part? Click here to book your stand.

Need more information? Contact our team today.