The route has been set up: parallel imports may be extended to 2026
The Russian Ministry of Industry and Trade is considering the possibility of extending the parallel import mechanism until 2026. Roman Chekushov, State Secretary and Deputy Minister, told reporters about this. The Agency intends to prepare a corresponding proposal in the near future. Izvestia investigated whether it was possible to fully meet all the needs of Russia through parallel imports and how such supplies affect domestic producers.
Extending the parallel
The parallel import mechanism was introduced as a temporary measure to provide the necessary materials and components for manufacturing enterprises, as well as to provide the Russian consumer with the necessary goods, the press service of the Russian Ministry of Industry and Trade told Izvestia.
"During the period of its operation, parallel import has proved its effectiveness. At the same time, its monthly volume has consistently decreased. Now it is about $2 billion per month, although at its peak this amount was three times more. This is closely related to the development of Russian production of necessary goods, as well as the supply of products made in friendly countries," the ministry noted.
Parallel imports have become one of the key tools for adapting the Russian economy to the sanctions restrictions, Vladimir Sedalishchev, a leading researcher at the VAVT, noted in an interview with Izvestia. Despite the inability to cover the full range of needs, especially in the field of high technology, the main categories of goods are supplied consistently. Thus, in 2023, the volume of parallel imports exceeded $40 billion, which confirms its importance for the domestic market.
To date, goods from more than 200 brands of various industries are imported in parallel, Anastasia Melnikova, senior lecturer at the Department of Entrepreneurship and Logistics at Plekhanov Russian University of Economics, clarified in an interview with Izvestia. The list is periodically updated by the Ministry of Industry and Trade. Considering that it includes all the major popular brands, overall demand is satisfied.
— Of course, there is a niche demand for little-known brands that are not so easy to get right now, but in general there is no shortage on the market. Of course, parallel imports spur competition in the domestic market," she noted. — But, in addition, it is a strategically important decision in a number of areas, such as the pharmaceutical and medical industries, machine tool industry. It is very difficult to implement an import substitution program in these areas in a short time.
Market impact
Parallel imports really helped the Russian economy a lot in the face of sanctions, but it cannot be said that they were able to meet all its needs, Kirill Lysenko, an analyst at the Department of sovereign and regional ratings at the Expert RA agency, told Izvestia. For a number of product categories, the existing control measures by unfriendly countries either make parallel imports impossible altogether, or excessively increase the associated costs. This is especially true for dual-use goods.
In addition, according to him, the parallel import mechanism is associated with the loss of after-sales service from the manufacturer. This problem is particularly acute for technologically complex machines and equipment.
— However, it should be noted that parallel imports are only one of Russia's responses to sanctions. Russian businesses are gradually finding alternatives in friendly markets or implementing import substitution. However, it is still not possible to find or create alternatives of similar quality in sufficient volume in all areas," Kirill Lysenko emphasized.
According to him, the availability of parallel imports of equipment and raw materials allows Russian companies to avoid shutdowns and reformatting of technological chains, which, of course, is a positive factor in the short and medium term. However, at the same time, continued access to sanctioned products slows down the development of their own production of such goods.
Parallel import as a mechanism whereby the supply of original goods can be carried out not only by the copyright holder is not unique, Alexander Firanchuk, a leading researcher at the Presidential Academy, told Izvestia. It has been used for a long time in a number of countries, and the degree of coverage varies from narrow product groups to a complete list of products.
Under the sanctions pressure of 2022, it played a key role, helping to mitigate the consequences of an abrupt cessation of supplies and prevent a serious shortage in the Russian market. Its relevance remains today: some brands have not returned, there are no domestic analogues, and the cessation of parallel imports actually means a reduction in the range and an increase in gray supply chains.
Adapting to the realities
In 2022, foreign companies terminated cooperation unilaterally, "forgetting" about customer prepayments and their guarantees, the head of the People's Front recalled in an interview with Izvestia. Analytics" by Olga Pozdnyakova. Therefore, the introduction of parallel imports was supported by many market participants.
Today, in her opinion, it is clear how manufacturing enterprises have adapted in a relatively short period of time, and somewhere they are already filling new niches with a fairly high level of quality. But there are still areas in which our manufacturers are not represented yet or are represented only a few times. These are mainly products that require large investments in research and development (R&D) and have a high risk of competition with foreign manufacturers.
— For example, the production of professional high—end sports equipment, many items of which are traditionally purchased from specific foreign manufacturers who are considered the best in their field, — said the expert. - Or the production of high-precision instruments and devices, especially in the field of medicine and science. In order to produce something like this, you need to invest a lot of money and time in development, and there is no guarantee that sanctions will not be lifted by the time the product is fully ready for sale and use.
Therefore, for such narrow niches, as well as for machines, equipment and machinery that are already actively used in our country and regularly require maintenance and repair, parallel imports should be extended, Olga Pozdnyakova is sure. As well as for a number of areas of the chemical industry.
It is unlikely that the geopolitical conditions will change dramatically in the near future, Natalia Kazantseva, associate professor of the Department of Economic Policy and Economic Measurements at the State University of Management, told Izvestia. The complication of international relations is likely to lead to the imposition of secondary sanctions, so parallel imports will be more difficult. A difficult settlement system and complicated logistics will significantly affect the cost of goods and in many ways will not allow businesses to maintain stable supplies through already established channels. Therefore, companies working with parallel imports will have to adjust their logistics all the time.
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