Exports to CIS nations plummeting

India’s exports to the nearest block of nine plus two nations – the Commonwealth of Independent States (CIS) which have a population of about 285 million – have drastically come down. Starting from 24.2 per cent in case of Russia to 75 per cent in case of Armenia as compared to export figures of 2014-15 according to the data of department of commerce, Ministry of Commerce and Industry.

Overall trade figures to almost all members of the CIS show a dismal fall. Trade with Uzbekistan came down from 226.3 million dollars to 139.89 million in 2015-16. Trade with Tajikistan slipped from 58.09 to 32.2 million dollars. Trade with Kazakhstan dwindled from 952.3 to 504.8 million dollars.

Total export from India to the CIS block registered a negative growth with 2309.06 million dollars in 2015 to 1499.67 million dollars in 2016.

The percentage fall in exports to member countries of CIS was as follows :

Armenia                    —         75.09 %

Azerbaijan                 —         69.77%

Belarus                                  —         25.86%

Kazakhstan               —         39.4%

Kyrgyzstan                —         33.49%

Moldova                    —         11.15%

Russia                        —         24.28%

Tajikistan                  —         58.55%

Turkmenistan                       —         25.5%

Uzbekistan                —         44.4%

Ukraine                                 —         25.74%

 

This, in spite of several visits of dignitaries with trade delegations from CIS countries to India during 2016. There seemed willingness from the CIS nations to increase trade with India, but logistics seem to have come in the way of increasing bilateral trade. However, the North South International Transport Corridor (NSITC) rail and sea network is the answer to the logistics problem.

While transport by sea from Mumbai to Saint Petersburg requires almost six weeks, it takes only three weeks via the North South International Transport Corridor, as the first freight test run last October has shown. In October 2016, Russian Railways Logistics, Iranian Railways, Azerbaijan Railways, sent out the first shipment from Mumbai to transport and logistics complex in Kaluga Oblast. The transit time was 22 days. The new route reduced delivery time by half and offered shippers rates that were 20% lower than on the rail route through Turkmenistan and Kazakhstan.

The North-South route runs through Russia, Azerbaijan, Iran and India over a length of over 7,000 kilometres.

There appears to be lack of awareness among shippers about the possibilities this service offers. They are used to using other routes which are time consuming and hence also more expensive to CIS nations. There could be a problem with freight containers. Empty containers may accumulate at one end of the route while, at the other end, they will be in short supply. Also, the main problem could be difficulties in customs clearances because, when moving from India to Russia via Iran and Azerbaijan, the cargo has to cross state borders three times.

The importance of the North-South ITC was also stressed during Russian President Vladimir Putin’s visit to India in October 2016 when it was said that it “can become a key factor in the deepening of economic integration in the region.”

The level of bilateral Russia-India trade in 2013 when it amounted to approximately $11 billion dropping to $9.5 billion in 2014 does not correspond to the potential of the two countries.

 

 

 

About TBM 14 Articles
designed and maintained by TBM