With the increasing supply chain issues and removal of its banks from the SWIFT International payment system, Russia is looking to collaborate with Indian SMEs to minimize its potential risk of medical device shortage. This is expected to strengthen India’s presence within Russia’s medical device market, says GlobalData, a leading data and analytics company.

According to GlobalData, Russia’s medical devices market increased at a Compound Annual Growth Rate (CAGR) of around 4% during 2015-2020. It reduced slightly in 2021 and is expected to fall further because of the war.

Russia receives around 60% of the India’s medical device exports going to Commonwealth of Independent States (CIS). US and European companies have been the major suppliers for the Russian medical devices market. Despite medical devices being exempted from sanctions, the current restrictions related to logistics have greatly reduced imports to Russia from these nations. This paved the way for Indian medical device companies to boost their supplies to Russia.

Vinita Sippy, Medical Devices Analyst at GlobalData, comments: “Major medical device firms, already collaborating with the Western countries, are unlikely to further their collaboration and provide supplies to Russia, and hence, Indian SMEs are seeing this as an opportunity to gain access to one of the most prominent markets within the CIS region.”

With Indian SMEs, transactions could be carried through banks that do not fall under the Western sanctions’ regime and therefore, the two nations have been in discussions related to alternate payment transactions that will allow for rouble to rupee conversion without having to rely on US dollars.

Sippy concludes: “In addition to strengthening its ties with Russia and increasing exports, India must also assess the risks and ensure that the existing and new collaborations with US and European nations are not affected.”