Sputnik has spoken with Dr D. B. Bhaaskara, CEO of the multinational company Roerich Healthcare, about bilateral trade with Russia amid the so-called economic war on the country launched by the US.
Sputnik: The US has insulated the pharma, fertiliser, and energy sectors from sanctions. What are the prospects you foresee for Indian companies in Russia, considering the two countries still haven't yet decided on the mode of payment?
Dr D.B. Bhaaskara: We are experiencing a huge delay in payments as only a couple of banks have successfully transferred in euros. Ruble-rupee transactions are yet to start as we were told that conversion rates and other formalities have not been finalised.
Also, a few companies, including mine, have started the process to accept the Chinese yuan for exports. Several firms are trying to transfer Chinese CNY for exports, and we must wait and see the fruitful transactions.
We hope yuan transactions will begin this week. India clearing the rupee also may come in to the picture.
Sputnik: Russian Ambassador to India Denis Alipov said Russia provides a significant opportunity for Indian pharma companies. What are the factors Indian firms should keep in mind while increasing their businesses in Russia?
Dr D.B. Bhaaskara: As the ambassador rightly said, we may have huge opportunities in pharma and consumer products and supplies since Western and American companies are now withholding all pharmaceutical products, both in raw materials and finished products, machinery, etc. Only China and India can support the exports.
There are several products still not developed or produced in India or China that Western companies produce, so we must be prepared to develop and produce these generic products that do not have valid patents.
We may have an opportunity to register and fast-track the most necessary innovative molecules, including finished products, to cater to the vacuum.
India is a pharmacy to the world in terms of high-quality generics at very affordable prices, so there are potential opportunities to further export.
Sputnik: Despite insulating several sectors from sanctions, the US is warning India of severe consequences if New Delhi increases trade with Moscow. How do you assess this warning, and whether Indian firms, which have a large presence on the Western market, will take the risks?
Dr D.B. Bhaaskara: Yes, and it's very tricky and risky. Several companies which have a presence and business in the West and North America are hesitant to do any business with Russia at this crucial and difficult time.
Several of my partner companies have temporarily halted the next steps in registration, clinical trials, and business with Russia, which they had plans for, some of them were even at the halfway point.
Sputnik: Prices for active pharmaceutical ingredients (APIs) are increasing. Will that impact business prospects?
Dr D.B. Bhaaskara: Yes. Due to the shortage of intermediate raw materials as well price hike in basic raw materials in China and India due to various reasons forces every manufacturer to manage and fix the new cost and price.
This may be for the time being or may remain. This will impact the end-users' point of view as the finished dosage prices gradually increase.
So temporarily, they will reduce consumption hoping the raw materials may go down soon. Time will further make changes!
Sputnik: Will firms that are sourcing supplies from Europe feel disruptions as Europe relies on Russia for its energy needs?
Dr D.B. Bhaaskara: It's quite natural in these circumstances. Sanctions will go both ways. Russia may face severe disturbance in these economic-cum-international political scenarios. But it needs to overcome all, and at the same time, several EU businesses are also in trouble.
Regarding energy exports, the Central Bank of Russia has officially announced that as of 28 March 2022, the Russian ruble is bound to gold.
The rate is 5,000 rubles per gram of gold bullion.
Russia just wiped out about 30% of the value of the US dollar worldwide when it comes to gold bullion.
Worse, because Russia will only sell its oil and gas in rubles, now fixed at 5,000 rubles per gram, anyone wishing to buy oil or gas will need to either pay in rubles or pay in gold, and they won't get the US dollar value for the gold they tender as payment!