(Bloomberg) -- Russian efforts to keep up the flow of unauthorized imports are having only limited success, judging by a forecast from the industry minister, as the country tries to cope with international sanctions that have caused an exodus of foreign companies and occasional shortages since the invasion of Ukraine.
Gray market sales, also known as parallel imports, reached nearly $6.5 billion since the government allowed companies in May to bring in goods for the domestic market without gaining agreement from their manufacturers, Deputy Prime Minister Denis Manturov said in an interview with the Interfax news service published Monday.
It’s a rare glimpse into the state of the economy after Russia stopped publishing some key statistics including a detailed breakdown of imports and exports.
Manturov’s last assessment of progress made in trying to bring in foreign goods exempt from trademark laws was in June, when he estimated that around $2 billion worth of parallel imports arrived in the first month since the program went into effect.
Their value may reach $16 billion by the end of this year, said Manturov, who’s responsible for trade and industry. Under that scenario, parallel imports would be equivalent to only about 4% of goods Russia imported last year.
Shipments of foreign goods collapsed under the weight of sanctions from the US and its allies in response to President Vladimir Putin’s Feb. 24 invasion of Ukraine. Russia imported a total of $380 billion of goods in 2021, according to the central bank, which last week forecast that total volumes may fall as much as 31.5% this year.
The government will follow a “balanced” approach when deciding what goods to include on the permitted list for parallel import so as “not to hurt local companies,” Manturov said.
Russia has sought for years to promote import substitution of foreign brands in an effort to make its economy more independent, with little success. Manturov said last month that the authorities may cancel parallel imports for goods where Russian producers are able to manufacture enough.
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