Despite the tremendous success of the recent football World Cup, Russia is not always the first country exporters think of as a trading and investment destination.
There are several reasons for this; the political headwinds, press coverage and outdated myths (on both sides) often give the impression that Russia is not an easy place to do business.
As the Russo-British Chamber of Commerce (RBCC), we spend a great deal of our time trying to convey the reasons why Russia should be a priority market.
One of the first myths to dispel is that you cannot do business in Russia because of the sanctions – not true! The sanctions have been carefully targeted and only affect a very small percentage of the businesses that trade with Russia.
Both the Russian and UK governments have gone out of their way to make clear that they have no intention of interfering with legitimate business.
So, why is Russia an attractive market? Russia is the largest market in terms of population and its growing middle-class has an insatiable appetite for good quality goods. For the Russian consumer UK goods represent quality. It may surprise the reader that Russia is the UK’s 24th largest global market for goods, bigger than Brazil or South Africa, just behind India.
In 2017 UK-Russia bilateral goods trade was up 32% compared to 2016. UK goods exports were up 19% and Russian goods exports up 44.7%. The growth in Russian exports was mainly driven by large increases in the petroleum and non-ferrous metals sectors.
UK goods exports have been more equally split by sector but have seen strong increases in the power generating machinery, transport equipment and vehicles sectors.
A recent Trade Mission to Kazan in Tatarstan that the RBCC organised in April is illustrative of the reception UK companies can expect when considering the Russian regions as potential investment destinations.
Despite the importance of oil and gas to the economy of Tatarstan, the regional government has implemented an ambitious diversification programme and has worked hard at creating a favourable investment climate for foreign businesses. It has established Special Economic Zones that have competitive tax rates for foreign and Russian companies that invest and locate there.
The Trade Mission included representatives from four very different sectors; Oil & Gas, luxury foods, air charter and IT. The Regional Government, together with the Tatarstan Chamber of Commerce and Industry organised a fantastic programme which gave the UK companies the opportunity to present its products or services to an audience of interested local businesses and government organisations.