"The market will not be scarce": how updating the list of goods for parallel imports may affect Russians

The Ministry of Industry and Trade of Russia has updated the list of goods allowed for so-called parallel imports. The corresponding order was published on Wednesday, March 15, on the official Internet portal of legal information.

"The list was supplemented by a number of brands of motor oils (Shell Helix, Rimula), household appliances (Zanussi, Wahl), cosmetics and perfumes (Kerastase, Yves Saint Laurent), spare parts for agricultural and marine equipment (Caterpillar, Bauer Kompressoren). Also included in the list were brands of toys and children's goods, for example, Hasbro, Logitech, Nintendo, "the press service of the Ministry of Industry and Trade reported.

In addition, IKEA products were added to the list, as well as another 12 foreign car brands. We are talking about cars Renault, Ford, Kia, Mazda, Hyundai, Citroën, Opel, Peugeot, Genesis, Dacia, Isuzu and Hino.

"Import incentives are aimed at those niches in which Russian producers need more time to meet the needs of industrial enterprises and end consumers... In the future, together with other agencies, we will continue to monitor the situation with import supplies. If necessary, certain items will be added or excluded," the ministry added.

Recall that parallel import implies the import into Russia of original foreign products without the consent of the copyright holders. Back in 2012, the country banned the use of this mechanism in connection with accession to the WTO. However, in March 2022, the government decided to officially legalize the program to provide the domestic market with popular goods against the background of the departure of many foreign brands and the introduction of trade restrictions by the West against Moscow.

The parallel import itself was launched in May, and by December, as part of the initiative, 2.4 million tons of foreign products worth more than $ 20 billion were imported to Russia, which is about 8% of the total monetary volume of foreign goods supplied to the country for 2022, as evidenced by the materials of the Federal Customs Service of the Russian Federation.

"Parallel imports were originally conceived as a significant measure of support for both business and our economy ... First of all (under the program they import. - RT) cars, machine tools, equipment, technological lines. But there are also light industry goods. We believe that this also has a significant impact on the stabilization of prices in our market, "said former head of the FCS Vladimir Bulavin in December in an interview with the TV channel "Russia 24".

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The launch of the program largely allowed to solve two key tasks: to reduce risks for consumers and to remove the logistics shock. This was told to RT by Associate Professor of the Department of Statistics of the Plekhanov Russian University of Economics Olga Lebedinskaya.

"Over the past time, supply channels and payment infrastructure have been built, a reserve of spare parts has been provided. And we learned service support. Today, goods for parallel imports go to Russia mainly through China, Turkey and Kazakhstan. In addition, opportunities for deliveries through India and the UAE are being developed," Lebedinskaya said.

At the same time, businesses from friendly countries participating in parallel imports are practically not afraid of secondary sanctions from the West, experts say. According to Polina Gusyatnikova, Senior Managing Partner of PG Partners Law Firm, it is difficult to track the delivery of goods in small batches. Therefore, in order to prevent the goods from entering the territory of Russia, the right holder would have to completely stop trading with all its partners.

"So far, quite good reasons are required for the imposition of secondary sanctions. Perhaps this mechanism will be tightened in the future, but so far the possibilities for parallel imports continue to be open, "the RT interlocutor added.

According to her, today Russians still have the opportunity to buy already familiar products of foreign brands in stores. Moreover, the quality of these goods may be even higher than before.

"It has long been no secret that manufacturers can make the same product, but of different quality for export and for their market. Therefore, if the imported batch was originally intended for domestic consumption, it is possible that it may be better than the one that was previously imported to Russia, "Gusyatnikova suggested.

Market development

In 2023, the volume of parallel imports to Russia is likely to grow and may double the figures for 2022. This point of view in a conversation with RT was expressed by the president of the all-Russian public organization of small and medium-sized businesses "Opora Russia" Alexander Kalinin.

"In favor of increasing supplies is the fact that the Ministry of Industry and Trade is constantly expanding the range of products allowed for import. I think the department will continue to supplement the list of such goods, "Kalinin emphasized.

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At the same time, as the expert noted, due to longer logistics, companies increase the cost of delivering goods on parallel imports to Russia. As a result, imported products often cost ordinary customers a little more expensive than before. In this sense, Russian manufacturers gain a competitive advantage, Kalinin is sure.

According to Olga Lebedinskaya, the expansion of the list of goods for parallel import allows to maintain the range of products in stores, but at the same time it cannot fully satisfy mass demand. Against this background, according to the expert, Russia needs to continue to increase capacity for import substitution.

"It is extremely important that import substitution is based on technological development, and does not go only along the path of parallel imports. Of course, we are not able to independently produce the entire range of products, but this is not necessary. But it is possible and necessary to learn how to create, for example, unique equipment (servers, network equipment, data storage systems, software and hardware complexes). This also applies to other sectors," Lebedinskaya emphasized.

We add that, in addition to intensifying import substitution, with the departure of a number of Western companies, free niches in the Russian market began to actively develop business from friendly countries. For example, in January 2023, among the new cars purchased in the Russian Federation, 40.6% of models belonged to domestic brands, and 38.1% to Chinese, although a year ago the values were 20.3% and 9.6%, respectively. Such data are given in the study of the company "AUTOSTAT".

"The presence of parallel imports, of course, is positive for consumers, because it allows you to create competition in the market, but on a global scale, there will still be a replacement of familiar goods with new brands. In principle, this is already happening. It is impossible to import goods on parallel imports in the same volumes. Time will tell whether this is good or bad, but the market in any case will not be scarce," Polina Gusyatnikova concluded.