Partnership with India in 2023: Delivery issues

The February 2022 events in Eastern Europe have prompted Asian countries to boost trade with Russia. This decade, Asia is considered the new center of economic power demonstrating an explosive growth. Over the ten years between 2000 and 2010, the gross national product of Asian countries has grown from 26% to 38%. Since 2010s, when the United States and Europe started yielding ground and losing economic power, the strategic partnership potential of Asian countries for Russia has increased.

Vitaly Ankov / RIA Novosti

Extensive imports of Asian goods confirm that their quality has substantially improved since the 1990s and can successfully compete with Western products while prices are more affordable for consumers in the middle and lower segments compared to the upper European segment. While in the past, the ‘made in China’ label was mostly associated with poor quality, today, industrial companies both in Russia and in the West opt for devices and components from Asia. For example, China and South Korea are world leaders in semiconductor manufacturing for many industries, from vehicles, computers to aircraft. Western goods are no longer exclusive and can be substituted with reasonably priced and quality alternatives from China, Taiwan, India, Indonesia and other Asian countries.

Old friends are better than new ones: Prospects of partnering with India

Russia and India have established strong economic and diplomatic ties since the Cold War, maintaining the bond after the collapse of the Soviet Union. If in the early 20th century, India was one of the poorest countries in the world, since the 1990s, this country’s economy has grown, putting it in the top five countries with largest GDPs by 2020. Currently, India is ready to claim the third place after the United States and China.

India ranks second in terms of agricultural production, third in terms of pharmaceutical production and is gradually becoming a global IT giant. In 2021-2022, grain exports from India reached $12.87 bln; Indian medicines are replacing expensive European ones, and every third out of four IT experts on the global market in an Indian national.

In leaps and bounds, contemporary India is moving from being a poor third world country of the 1990s and is now close to a new breakthrough. Russia, which has been cut off from the US and European technology and investment by the sanctions, is looking for new partners. In 2023, India has a chance to develop and improve its old friendship with Russia.

Trade turnover in 2023: What Russian entrepreneurs buy in India

Turnover between India and Russia grows every year. In the first quarter of 2022 alone, it grew by 120% as compared to the same period in 2021. Food and household chemicals are among the most interesting items for Russian industrial production. Especially it refers to spices that are used in food production.

Quite popular are also handmade items such as carpets made from rare natural materials: wool, silk and cashmere. The supply of industrial packaging – tinfoil, film, cardboard – has also increased.

But as household chemicals, spices and handicraft goods are not something new for the Russian consumer, there are new trends of 2023: equipment and parts for Russian production facilities. According to Reuters, in the fall of 2022 Russia gave India a list of 500 items for potential supply, including parts for cars, aircraft and trains.

Russia-India logistics: Ways and kinds of delivery and its proper organization

There were no logistics problems and restrictions between Russia and India before 2022. Due to advanced internet technology, entrepreneurs did not have to spend money, resources and time for visiting their Indian partners. Video link-ups used to be a perfect way to discuss cooperation, receive a video review of a product, order delivery and deal with other business issues. There were no problems with courier and logistics companies that delivered from India to Russia any types of packages, such as small parcels, unit loads and container shipments. In 2022, the situation changed.

On the one hand, the Western sanctions and restrictions have sped up the development of economic relations and trade turnover with India. On the other hand, the sanctions created certain barriers in logistics. First of all, they are related to deliveries and settlements with foreign contractors, partners and suppliers of goods and services. The restrictions affected various types of goods. Russian businesspeople now have to take into account the new conditions for purchase and delivery. Let’s take a look at the goods that have been affected the most.

Shipment of rare and exclusive items from India

In case of a planned delivery of a unique local product, such as a carpet, you need to check whether the product is subject to an export ban, what accompanying documents are required, and how to properly fill out invoices and the customs declaration. Handicrafts are a subject of customs services’ particular attention; Indian customs officials may request a certificate from the Ministry of Culture. Handmade products created over 50 years ago are considered cultural assets of the state and may be prohibited from export, or require special delivery conditions as well as special permitting documents.

Delivery of liquid and bulk samples of goods

For unimpeded passage of such goods through customs control, the following should be considered:

• A manufacturer’s safety certificate, which is mandatory for liquid, bulk and other substances and products, such as those for use in the chemical and food industries as well as agriculture.

• Package integrity: weather-resistant and preferably factory-based packaging is required for bulk, liquid and other goods that may spill and damage other shipped products. Courier services will refuse to carry out the delivery in case the packaging fails to comply with requirements.

• Agreement with a logistics company that provides international shipping services.

• Description of the package weight and dimensions to calculate the cost.

• Indication of delivery urgency, if necessary.

Receiving products intact and within the timeframe

In early 2022, the situation in logistics has drastically changed. Shutting down transport links with many countries has changed logistics routes. Major international players have withdrawn from Russia’s courier services market, while some local services have failed to consider opening representative offices abroad. For instance, the CDEK express delivery service is still unavailable in India. Other delivery companies are seeking ways to adapt to the situation and are launching their representative offices in friendly countries to maintain goods turnover between Russian and foreign companies.

A logistics company serves not solely as a link but as an actual partner and a party to the deal, along with the seller and customer. A delivery company’s competent and timely actions allow for the goods to be delivered on time, in proper condition, and without any unexpected difficulties and customs and bureaucratic barriers.

While choosing an international shipping partner, pay attention to how long the company’s been in operation in the international market, an indicator that confirms its declared experience and reliability. Checking the delivery service’s details available in open data sources will help you learn about its actual experience. A company that has provided services for several years would have a proper experience in building and implementing effective logistics schemes. Also, pay attention to reviews: those about delivery companies that offer fair and efficient service are easy to find on the web.

In 2023, cooperation with reliable logistics companies will provide Russian entrepreneurs with an opportunity to maintain and boost their business processes, with assistance in cargo clearance and handling customs and other shipping issues which would otherwise distract them from implementing essential managerial and strategic tasks. Choosing a logistics company sensibly is an important first step in building stable partnerships with India and other Asian countries.

By Alexey Antonov, CEO and founder of Time Saving Machine, aggregator of Russian and international express delivery services

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