Indian dairy producers hope that the Russian government’s decision to ease dairy import norm will pave ways for expansion of product portfolio of exporters
By Sai Nikesh D
Russia has agreed to reconsider its import norm that restricts the entry of Indian milk products shipped from small plants, triggering hope among Indian exporters.
The Russian government is ready to remove the condition of 1,000 cattle for exporting plants in India if the Indian government can ensure safety of products, according to reports.
Russia has also asked for a comprehensive report from India on how its safety concerns would be addressed.
As per the existing norm, Russia allows imports of products supplied by only those plants having at least 1,000 cattle, disqualifying many Indian small plants and cooperatives that source milk from village clusters.
Welcoming Russia’s decision, Indian dairy producers expressed hope that the move would encourage more players to enter into the overseas market and pave ways for expansion of product portfolio.
“The Russian government has finally agreed to look into their guidelines in order to accommodate more players, provided, they adhere to quality standards. We are happy with this move, as it will help many Indian players to have piece of this lucrative market and no more time will be wasted in negotiations and arbitrary dialogues,” says, Shirish Upadhyay, senior vice-president, Strategy Planning, Parag Milk Foods.
As the Indian government is looking at enhancing relationship with Russia, it will help the industry to expand export portfolio beyond cheese, Upadhyay said.
Indian suppliers hope to grab larger market share in Russia which has stopped trade from conflict-hit Ukraine and several other European countries.
According to experts, even though Russia was looking to procure dairy products from all sources, quality always remained a critical element and hence they had a strict protocol for disease-free procurement of raw milk.
As the Russian authorities put in place a strict rule in April this year to ensure the entry of disease-free products, only two Indian cheese brands— Parag Milk Foods and Shreiber Dynamix Diaries— passed the quality test. “In hindsight, this incident has yet again drawn attention to the lack of quality and medication protocols, especially in the dairy sector which will always be a deterrent to our growth as we tap global markets,” Upadhyay said.
Last month, the Department of Commerce held a meeting with all stakeholders to discuss signing of a Russia-India protocol for export of dairy products from India to Russian Federation.
Two days before the meeting, Parag Milk Foods had written to the Department of Commerce, raising its concern that how would the consulting non-approved units other than the two approved would help the Department devise its strategy.
“Entry of Indian products into Russian market was delayed for four months due to inordinate delays in signing of protocol even after due approval from the evaluating authorities and this goes against the most coveted ‘Make in India’ programme,” said Parag Milk Foods, in its letter to the Commerce Department, on July 21.
At present, Russia’s annual import of food items is estimated to be around $40 billion.
This article was published in The Dollar Business on August 29, 2015