Stunted Growth:Indo-Russian Trade
"Oh I love Russian Girls...." beamed the speaker, twirling his mustache. I had been invited to a meeting for discussing the prospect of importing timber from Russia. At some point someone brought up the topic of Russian Mafia. The meeting went progressively downhill and by the next morning they decided they were not up to it, allegedly because imports from Germany and US were cheaper. Though the fact remains that Russian timber was of higher grade and a good 10-30 euros cheaper.
They just chickened out!
The episode followed almost a fixed trajectory of any discussion in India about business opportunities with Russia. Comments about prostitutes, Aeroflot's allegedly poor service, Russian Mafia, laments that nobody there speaks English, lack of vegetarian food and so on, invariably with expectations of ultra low prices if buying and mega profits when selling. At the end deciding that the venture is too risky to go forth.
Welcome to Indo-Russian Trade v2.0, one largely limited to government level defence and nuclear deals, export of Indian pharmaceuticals and chemicals, and import of Russian fertilizer and minerals.
Thus, in Jan-June 2017 India’s exports to Russia were just $2.24 billion and imports $ 3.11 billion, primarily thanks to defense and nuclear contracts. Compare it with tiny Panama across the Atlantic, whose foreign trade with Russia for the same period reached $ 7.75 billion, imports constituting $ 2.74 billion and exports of $5 Billion. Or with Israel who in the same period export goods worth $ 3.89 billion to Russia, while imported goods of $1.47 billion. Russia's trade with equally small Cyprus and Switzerland in the first 2 quarters this year reached a turnover of $ 34 billion and $32 billion respectively, comparable to their trade with France, Germany and the US.
The blame for being perpetually equated with prostitution here, partly falls upon the Russians themselves, thanks to a minuscule section of their women peddling themselves whether by coercion or by choice, all over the world, after the breakdown of the Soviet Union. An ugly blight on the country's reputation that most Russians today are completely ambivalent about, no different to how an average Indian would react to queries about the all prevalent flesh trade in his own country. In fact, they are far more embarrassed by stories of drunken brawls of their compatriots abroad.
Incidentally, London's Soho red light district has existed for over 100 years, Hamburg's Reeperbahn still remains the debauch capital of the world and Amsterdam's Rossebuur almost has a place in national heritage. Same with China, where scarcely a hotel exists where a single male guest wouldn't be woken up at night either by a knock on the door or an intercom call by a call-girl or her pimp. But, I am yet to hear anyone else refer to English, German, Dutch or Chinese prostitutes during a serious business meeting.
Now with Russia's economic and military pride largely restored, people don't dwell on this topic as often or as loudly, though echoes still persist. Though the trend of belittling Russia and Russians still all prevalent in India, especially by the anglicized middle and affluent classes, who seem to regard Eastern Europeans as little more than the impoverished angry cousins of the almighty west.
On the Russian side too, impressions about India are no less flattering. Beyond their regard for Indian medicines and fascination with Bollywood dances, Goa, Yoga and "Jimmy, Jimmy," a song I now consider a national embarrassment; the country is otherwise thought of as a large overpopulated garbage dump, with masses of impoverished people, interspersed with Yogis, Bollywood stars and billionaires who had purchased Jaguar and Arcelor.
Travel programs about India on Russian TV would invariably highlight roadside rubbish heaps, overcrowded trains, street children and half burnt bodies tossed into rivers. News channels provide a somewhat better treatment, but emphasising on BRICS and commissioning of Nuclear power stations. Many Russians still have Soviet-era hangups about having been the friendly elder brother, convinced that all that their country had ever sold to India were actually given as free aid.
Why are your roads so filthy? Doesn't anyone clean the garbage? Why do you have so many people? Why are the cows walking on your streets? Why are there so many poor? Haven't the Indians bought Jaguar and Land Rover? Do you practice Yoga? Do people dance in the parks and in the streets? Is it true that female babies are murdered? Caste system ? Untouchables?
It gets even worse when initiating business contacts. As apart from the fact that hardly anyone speaks English, there is a vast cultural gap, with an abject difference in work and communication etiquette. Besides, no thanks to a section of my compatriots who reached there earlier and ensured that at least for a considerable time in the future, all Indian businessmen would have to bear the tag of being relentless bargainers and time-wasting cheapskates. So much so, that half my email queries to Russian Companies don't get any replies despite being written in Russian. Its only when I call up and repeat my enquiry speaking in Russian, they start talking, albeit unenthusiastically, usually first inquiring how we plan to pay. Later, when some of the ice thawed, a few disclosed in no uncertain terms how their earlier interaction with Indians left them with no desire of having any more.
I wouldn't be taking sides here, because apart from knowing a typical Indian businessman's low-down approach, I have learned the hard way that dealing with Russian businesses is not also for the fainthearted or the impatient. Nearly all foreigners, except maybe their Slavic brothers, find Russians notoriously difficult negotiators, who constantly try to domineer, bargain hard when buying, inflexible when selling, fickle in their correspondence, capricious in replies, stingy in sharing data, with a reluctance to accept Bank LCs and so on. Furthermore, any deal with a Russian company is always on shaky grounds till a contract is signed, always chancing a last moment cancellation that is explained away simply as "your proposal is not interesting to us."
Most Russian exporters also prefer to do large volumes, irrespective of whether they themselves have the capacity to follow it through. Our businessmen always want "everything and immediately" laugh their fellow countrymen. They also tend to stick to an industry standard price-line, are not generous with discounts, digging in their heels no matter how much the other party cajoles. Their buyers and importers prefer to scout for their own sources, rather than have the vendor approach them and have no qualms in quickly showing the door to anyone quoting outlandish prices, usually with no scope of renegotiation; a regular trap for Indian first-timers.
Further complicating matters, is that neither side believes in win-win situations, as Russians consider giving any leeway as a sign of defeat, while Indian Businessmen fancy themselves to be the canniest traders in the word; entitled for the best deals, but averse to the slightest risks and mostly buying the cheapest stuff.
Coming back to Russia, here after the first few round of draconian negotiations, personal rapport plays a very strong role in determining the outcome and future business association. Though vary in the beginning most Russians believe in developing a long term relationship with their partners, but Indians start talking about it from day one, which doesn't help in gaining the former's trust a bit.
This becomes another pitfall, because behind the hollow facade of age-old friendship between the countries, in reality both Indians and Russians have developed deeply entrenched negative stereotypes about the other, along with a severe lack of trust and mutual respect.
Frankly, whenever an Indian businessman considering a potential venture with Russia, starts by bluster about prostitutes, repeating hearsay about some mafia or bitter complaints about lack of vegetarian food, and later lays down fussy preconditions and haggles for impossible bargains, he only sabotages his own efforts. Likewise, it also doesn't help the Russians in any way when they start off by crudely demanding whether the Indian side has the money to pay for the goods any more than to only target high volume purchasers like the Chinese.
The same Chinese who today buy close to 50% of all Russian forest produce earlier procured it from Canada and New Zealand before leaving the Timber Industry of the respective countries high and dry. There is no guarantee that they wouldn't do the same with Russia, the moment someone else reduces their prices.
In order to become significant players in global trade, Russian Businessmen also have to learn that it cannot always be a seller's market when they are selling, or a buyer's market if they are buying. That curt excuses such as "its not interesting for us" may be meaningful to fellow Russians, but sound frivolous and capricious to the rest of us, just like their insinuations that the other side are cheapskates, just because they want a better deal or request more realistic pricing for their products or services.
While all business follows the rules of demand and supply, but where Indians and Russians are concerned, the relation has reached such a rock bottom that need has as basic as just rekindling some mutual respect first. Once it is in place, business should follow suit.
