India is indisputably the world’s No.1 milk producing country with the current output said to be about 100 million tons. That is about three times the milk production in China. Bangladesh ranks first among importers of Indian dairy products followed by Egypt and United Arab Emirates. Russia allowed access to its market for Indian dairy exporters only after Russian Prime Minister Vladimir Putin’s visit to India in January this year.

 

Import of milk and dairy products rose to 10.4% in Russia because of the shortage of raw milk and cheaper import prices. Cheese accounts for almost half of the dairy products, Indian producers indirectly export to Russia through European countries. But then trade restrictions were imposed on Russia by EU and other western nations and thus, this avenue was a no-go.

 

A team from Russia’s phytosanitary watchdog, Rosselkhoznadzor visited India in October 2014 and inspected select dairy plants keen to export their products to Russia, majorly to Belarus and Kazakhstan. Reliable sources from the Indian dairy exports industry claimed that the delegation was satisfied with norms being followed and were positive about Indian exporters.

 

Then came in reports that India will have to wait longer to enter the Russian market. Russia has set new conditions for Indian exporters of milk and milk products. The country has stipulated that any Indian plant interested in exporting dairy products needs to own at least 1000 milch animals.

 

India majorly sources its dairy products through a co-operative model wherein farmers are owners of the milch animals and the dairy plant only organizes milk procurement and processing of its derivatives. Which under the new Russian guidelines for milk import is not acceptable.

 

Following this, dairy co-operatives have approached government for a favorable revision of the mandates. The major Indian dairy co-operative Amul has initiated talks with a handful of Russian importers as well. Dynamix dairy which was said to have got approval from Rosselkhoznadzor is pursuing talks with major players of Russian dairy market. What remains to be seen is whether Russia will indeed revise the conditions and make way for a strengthened relationship between the two countries.

 

References:

 

http://www.business-standard.com/article/markets/no-dairy-exports-to-russia-for-now-115060800605_1.html

http://www.business-standard.com/article/markets/russia-may-be-open-to-import-of-dairy-products-from-india-soon-114122500339_1.html

http://www.business-standard.com/article/markets/india-s-proposal-for-dairy-exports-to-russia-in-a-limbo-115020900171_1.html

http://articles.economictimes.indiatimes.com/2015-03-24/news/60439386_1_dairy-sector-rosselkhoznadzor-russian-importers