Despite exempting several sectors from sanctions, the US is warning India that increased trade with Moscow will result in grave repercussions. So, Indian firms have begun the process to accept China’s yuan for their exports.
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The United States and its allies have levied sanctions on Russia in response to Moscow’s special military operation, which began on February 24 after the republics of the Donbass region asked President Vladimir Putin for assistance in combating Kiev’s atrocities.
The media have spoken with Dr. D. B. Bhaaskara, CEO of the multinational company Roerich Healthcare, about bilateral trade with Russia in the midst of the US-led economic war on the country.
Interviewer: The United States has shielded the pharmaceutical, fertilizer, and energy industries from sanctions. What possibilities do you see for Indian companies in Russia, given that the two countries have yet to agree on a payment method?
Dr D.B. Bhaaskara: We are experiencing significant payment delays because only a few banks have successfully transferred in euros. Transactions in rubles and rupees have yet to begin because conversion rates and other formalities have not been finalized, according to our sources.
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In addition, a few businesses, including mine, have begun the process of accepting Chinese yuan for exports. Numerous companies are attempting to transfer Chinese CNY for exports, and therefore we must sit tight and see which transactions are successful.
Interviewer: Denis Alipov, Russian Ambassador to India, stated that Russia presents tremendous opportunities for Indian pharmaceutical companies. What are the variables that Indian firms should consider when expanding their operations in Russia?
Dr D.B. Bhaaskara: As the ambassador correctly stated, we may have enormous opportunities in pharmaceutical and consumer products and supplies because Western and American companies are now withholding all pharmaceutical products, both raw materials and finished products, machinery, and so on. Exports can only be supported by China and India.
There are numerous products that are still not developed or manufactured in India or China that Western companies produce, and therefore we must be ready to develop and manufacture these generic products that lack valid patents.
We may be able to register and expedite the most important innovative molecules, including finished products, to pander to the vacuum.
India is a pharmacy to the rest of the world in terms of high-quality generics at very low prices, so there are opportunities to expand exports.
Interviewer: Despite exempting several sectors from sanctions, the US is warning India that increased trade with Moscow will result in grave repercussions. How do you evaluate this warning, and do you think Indian firms with a strong presence in the Western market will take the risks?
Dr D.B. Bhaaskara: Yes, and it is extremely difficult and dangerous. Several businesses with a presence in the West and North America are reluctant to do business with Russia at this critical and difficult time.
Even some of my partner firms have momentarily stalled the next stages in registration, clinical trials, and business with Russia that they had planned; a few of them were even halfway there.
Interviewer: The cost of active pharmaceutical ingredients (APIs) is rising. Will this have an effect on business possibilities?
Dr D.B. Bhaaskara: Yes. Due to a scarcity of intermediate raw materials as well as a price increase in basic raw materials in China and India for a variety of reasons, every manufacturer is forced to manage and fix the new cost and price.
This could be temporary or permanent. This will have an effect on end-users’ perceptions as finished dosage prices gradually rise.
So, for the time being, they will decrease consumption in the hope that raw materials prices will fall soon. Time will bring about more changes!
Interviewer: Will companies procuring materials from Europe experience interruptions as Europe tends to rely on Russia for energy?
Dr D.B. Bhaaskara: In such situations, it is entirely natural. Sanctions will be applied in both directions. In these economic-political-economic scenarios, Russia may face severe disruption. However, it must conquer all obstacles at the same time that several EU businesses are in jeopardy.
In terms of energy exports, the Central Bank of Russia has announced officially that the Russian ruble will be pinned down to gold as of March 28, 2022.
The price per gram of gold bullion is 5,000 rubles.
Worse, since Russia will only sell its oil and gas in rubles, which are now fixed at 5,000 rubles per gram, anyone seeking to purchase oil or gas will have to pay in rubles or in gold, and they will not receive the US dollar value for the gold they tender as payment!