Indian exporters say the barrage of Western economic sanctions against Russia for its invasion of Ukraine could be a boon for overseas sales. In fact, the Confederation of All India Traders, calls the sanctions on New Delhi’s erstwhile Cold War ally “a blessing in disguise”, offering exporters the chance “to fill the void” with Indian goods and commodities. It may be a while, though, before Indian exporters realise their big ambitions as Russia’s war is gumming up supply chains globally amid a shortage of vessels and containers and soaring shipping costs. Russia and India are also still working out payment mechanisms that could include the rupee-rouble currency system used during the Cold War era. Russia, India to discuss Swift alternative for rouble payments during Lavrov visit If these various hurdles can be overcome – and new problems crop up daily – an analysis by MVIRDC World Trade Centre suggests the conflict has created a potential export opportunity worth US$22.5-billion in the European Union alone for India. “There’s a huge untapped opportunity,” said Vijay Kalantrui, the Mumbai-based trade centre’s chairman. Signalling a move in that direction, the EU announced on Monday it would accelerate free-trade talks with India in light of “rapid changes in the geopolitical environment”. India’s hoping to export products to Russia that were supplied by countries which halted shipments after the sanctions. The country’s also looking for ways to exploit trading export opportunities in markets that Russia and Ukraine served in pre-war days but can no longer supply. The goods India aims to market range from processed foods, clothing, electronic goods, machinery to wheat, millet and other commodities like steel. “We’re continuously monitoring the export opportunities the Russia-Ukraine war has opened up,” Commerce Minister Piyush Goyal said. India has deplored civilian deaths in the conflict and, like China , has urged a diplomatic solution. New Delhi has also ignored US warnings about ending up on the “on the wrong side of history” rejecting Western pressure to explicitly condemn Russia, its main defence hardware supplier, that it calls an “all-weather friend”. India says it needs Russian weapons to counter any aggressive moves by neighbouring China or Pakistan. While Kremlin Foreign Minister Sergey Lavrov has insisted “on defence, we can give India anything they want”. Western military experts say the impact of sanctions and the war on Russia’s arms industry means India will need to look elsewhere. India, which imports 85 per cent of its oil, has drawn Western criticism for sharply increasing its purchases of crude Moscow has been selling at knockdown prices, keen to pare its crude import bill which increased twofold in the last financial year. But even though India’s been doubling down on buying, Russian crude represents at most two-to-three per cent of its crude imports of which more than 50 per cent comes from the Middle East . India has also upped its Russian coal purchases. But given the distances – it takes three times as long to transport crude from the Black Sea to India as it does to deliver it to Italy – Russian exports are unlikely to make up a sizeable part of India’s energy mix. Foreign minister S. Jaishankar said: “Probably our total [Russian crude] purchases for the month would be less than what Europe does in an afternoon.” Why the Quad’s OK with India – not China – giving Russia economic support New Delhi regards increasing exports as the potentially more beneficial fallout from the war. Bilateral trade between India and Russia was a paltry US$11 billion last year, and heavily tilted in Moscow’s favour. Exports from India, mainly of tea, coffee, and pharmaceutical products, totalled US$3.33 billion in 2021 while imports of Russian mineral oils, fertilisers and rough diamonds were $6.9 billion. Conversely, Delhi’s bilateral trade with Beijing stood at US$125.66 billion in 2021, according to data from China’s General Administration of Customs, and totalled US$113.39 billion with Washington in 2021, US Census Bureau figures show. Ajay Sahai, director general of the Federation of Indian Export Association, said the top trade promotion body has already had “vibrant interactions [about importing] with some of the leading food companies in Russia that manage around 18,000 stores across the region.” There are no Western sanctions on supplying food and drugs to Russia. But after the war erupted, many foreign brands halted their Russian operations while others ceased supplies. Russia’s grocery shopping list includes pasta, marmalade, coffee, tea, rice, breakfast cereals, and ketchup, according to Sahai. Russia’s also looking for clothing. Earlier, the US , the UK and the European Union were big suppliers of consumable and consumer goods to Russia. “There’s considerable headroom for Indian exports to Russia to grow,” said Sahai, noting that in agri commodities like tea, coffee and spice, India’s Russian share of the market is below nine per cent. An Indian commerce department study also said India could easily scale up exports to Russia in machinery and electronics. In the area of India’s flagship pharmaceutical sector, trade body Pharmexcil said India’s Moscow embassy is fielding an unprecedented number of inquiries from Russian firms for drugs, medical devices and other equipment. Pharmexcil director general Uday Bhaskar said Russia used to get most of its pharmaceutical items from Europe but now is turning to India due to supply chain disruptions. The Association of Indian Medical Device Industry, meanwhile, is hoping to boost sales of medical equipment to Russia by nearly 10 times to US$26 million this year. Then, also, there’s the chance to sell to the EU goods previously supplied by Russia and Ukraine. According to a World Trade Centre study, before the war the EU had been buying 83 commodities from Russia that include agricultural items, chemicals, iron and steel, aluminium and textiles. The EU accounts for just four per cent of India’s exports so “there is a huge scope for increasing our exports to this region,” the analysis said. But it cautions India could face tough competition: “Indian exporters need to demonstrate their cost and quality competitiveness vis-à-vis Germany , France , Belgium and Czech Republic.” India sees wheat as another promising export area. The country’s long been a bit player with a one per cent share of the international wheat market despite being the second-largest producer after China. But it’s hoping to capitalise on surging global demand and skyrocketing prices, stoked by the war, droughts and pandemic-induced supply chain jams. India is aiming to sell to countries with “high dependence on Russian and Ukraine grains”, Food Secretary Sudhanshu Pandey said. Egypt, which has traditionally relied on cheap Russian and Ukrainian wheat, importing a total of US$2.4 billion in wheat stocks in 2020, has just approved India as a wheat supplier. India has also been in talks with other countries to sell wheat including Turkey , China, Sudan, Nigeria and Iran . Russia and Ukraine normally account for 30 per cent of global trade, but the war has badly disrupted sales. Ukraine, which has carried out only a fifth of its spring planting, has sharply curtailed grain exports to ensure enough domestic supplies. Ukraine in fight to grow food for itself and the world amid Russian invasion India used to keep its wheat harvests for home consumption due to its vast population and the government-set price for buying from farmers that made its grain largely uncompetitive on world markets. But now India’s headed for its sixth straight record wheat harvest with this year’s production pegged at 111.32 million tonnes and state-run warehouses are sitting on more than 23 million tonnes of wheat, triple the government food security level. The escalating global prices have made Indian wheat competitive, providing a “good opportunity” to increase the country’s export share, said Dun & Bradstreet’s chief global economist Arun Singh, Indian ratings agency Crisil Research director Pushan Sharma estimated India could “take about a one-third share in the [global wheat] void created by” Russia and Ukraine, though there are now worries an unusual record-breaking heatwave could lower Indian grain yields and affect the export outlook. Amid deepening concern about a rise in global hunger due to the conflict, Indian Prime Minister Narendra Modi said earlier in April that “we already have enough food for our people but our farmers seem to have made arrangements to feed the world”.