Impact of Russia-Ukraine war on MSME exports to be assessed after situation stabilises: MSME Minister
Trade, import and export for MSMEs: MSMEs had a share of 57 per cent and 59 per cent in India’s total exports to Russia and Ukraine respectively during the April- January period in FY22.
In terms of the MSME sector’s exports to the world, exports to Russia and Ukraine had a share of only 1.17 per cent and 0.18 per cent respectively, according to the government data.
Trade, import and export for MSMEs: Even as the ongoing war between Russia and Ukraine is likely to have some impact on India’s trade with the two countries, more precise implications on MSMEs including that of sanctions imposed on Russia can be assessed only after the situation stabilizes, MSME Minister Narayan Rane said on Monday. “The information on immediate impact on exports of the MSME sector due to the Russia-Ukraine war has not yet been reported,” Rane said in Rajya Sabha on Monday. The minister noted that government is in the process of taking appropriate steps which may arise due to the war.
According to the data on MSME exports to Russia and Ukraine shared by the minister, MSMEs had a share of 57 per cent amounting to Rs 1,632 crore in India’s total exports to Russia worth Rs 2,854 crore during the April-January period in FY22. Likewise, MSMEs’ share in India’s total exports to Ukraine worth Rs 426.78 crore during the period was 59 per cent amounting to Rs 255 crore. However, in terms of the MSME sector’s exports to the world, exports to Russia and Ukraine had a share of only 1.17 per cent and 0.18 per cent respectively.
“As of now exports are not happening to the two countries, hence, it is certainly impacting exporters as there is no payment mechanism also currently in place. Once the war is over, we might see some opportunities as well emerging for India,” Ajay Sahai, Director General and CEO, Federation of Indian Export Organisations (FIE) told Financial Express Online.
Depending on the situation ahead, India may recover its losses and get more market as well for products in not just the two countries but also other countries where Russia and Ukraine are major suppliers of products like petroleum products, iron, steel, wheat, etc., according to Sahai.
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Russia has been a major supplier of oil and gas, metals, fertilizers, and wheat in the world. Similar are Ukraine’s exports to the world including petroleum products, wheat, and steel other than coal, machinery and transport equipment, etc. India’s bilateral trade with Russia and Ukraine stood at $11.9 billion and $3.1
billion in 2021, as per the official data. India’s exports to Russia included pharma,
organic chemicals, auto components, electronics, etc while exports to Ukraine were pharma products, agrochemicals, food products, and more.
“India exports a lot of medicines to Russia and Ukraine. If this turns out to be a long-lasting war, there would be an impact on exports from India even as it might also lead to scarcity of drugs in these two countries,” J Jayaseelan, Vice President, Indian Pharmaceutical Association and Managing Director, Sai Mirra Innopharm had told Financial Express Online.