Russia seeks exporters to replace the Ukraine

Historically, the economies of the two countries — Russia and the Ukraine — were closely connected and dwelled under the same roof of the USSR. The Ukrainian industry: ferrous and nonferrous metallurgy, machinery, hardware production, railway industry, pulp and food processing, and many other industries, has largely been focused on the Russian market.

Exports from the Ukraine to Russia totaled tens of billions of dollars.

For example, according to analysts, in 2013 Ukrainian metal, reinforcing wire and rods occupied a quarter of the corresponding segment of the Russian market, which is expressed in monetary terms nearly $ 2 billion.

Ukraine’s industrial belt was built for many years. In the Ukraine many Russian aircraft industry enterprises and design institutes were located. Russia relied on the Ukraine as the nearest neighbor and trustworthy partner.

Ukrainian exports — heavy machinery, steel and pipes, mining and quarrying equipment — for many years entered Russia on favorable terms, often with large duty-free quotas and reduced transport costs. Many Russian manufacturers simply could not compete with the Ukrainian exported raw materials and goods.

However, the situation changed with the beginning, first, a trade war between the two countries, and second, the governmental takeover in the Ukraine.

Russia had to cancel the duty-free quotas, impose an embargo on the import of a whole list of goods from the Ukraine and, at the same time, tighten customs procedures for the Ukrainian imports.

And so, the result of such trade embargo is Russia’s urgent need for new exporters to replace the Ukraine.

On the example of some Russian steel companies, a sharp increase in Chinese and Indian imports can be seen. In the engineering and machine tool industries the share of imports from some European countries (like Germany, the Scandinavian countries and Italy) is gradually increasing.

It is possible that in the light of current events in the Ukraine, Russia will provide more favorable conditions for foreign companies and create a better environment for the expansion of their businesses, as the domestic industry is not sufficient to fill the vacant market capacity.