INSUBCONTINENT EXCLUSIVE:
A good number of Asian companies continue to conduct business in Russia, maintaining operations despite sustained international sanctions
imposed after the full-scale invasion of Ukraine
Maintaining a complex balance between profit, geopolitical alignment and risk management, their presence reveals a divergence between the
active in Russia, according to a list maintained by Yale CELI
While it has publicly paused investments and advertising, its core operations remain untouched, with profits from Russia making up about 20%
factories and has adapted to sanctions by routing logistics through Turkey and shifting senior management responsibilities to Hong Kong
to Russian authorities and enabling Moscow to continue its war against Ukraine.The designation was followed by a sustained effort by
Ukrainian activists and public figures to pressure the company into withdrawing from Russia
One prominent example is Great Wall Motor Co., which doubled its revenue in Russia in 2023 as most major European and American car makers
either suspended operations or exited altogether
vehicles is growing steadily.Haier, another Chinese manufacturer, has also expanded its Russian footprint
The company already operates at least three factories in Russia and in mid-2022, announced plans to build a fourth in Naberezhnye Chelny
marketing strategy.Despite international scrutiny, Haier has made no indication that it intends to scale back its operations in the country
Xiaomi, though less directly involved in manufacturing in Russia, continues to thrive in the Russian consumer electronics market
In July 2022, Xiaomi and its sub-brand POCO accounted for a dominant 42% of all smartphones sold in Russia
However, the company publicly distanced itself from geopolitical tensions, stating that it supports peace and does not endorse any military
Financial institutions also play a central role in this ongoing engagement.The Industrial and Commercial Bank of China (ICBC) maintains its
Its 2022 revenue grew by 42% y/y
The growth is indicative of the increased demand for both Russian state surveillance apparatus' increased demand for equipment and a lack of
Western alternatives.Indian companies like Bajaj Auto and Dr
Since these companies have a mostly India-based supply chain insulated from any major Western exposure, they have relatively escaped much of
positions as European and American firms continue to retreat, not just as opportunistic entrants but as long-term actors in a reconfigured
Operating in Russia today comes with considerable risk
The threat of secondary sanctions from the West remains real, and reputational fallout is increasingly difficult to manage.Moreover, Russian
authorities are now increasing financial barriers to exit, including heightened exit taxes and forced asset write-downs
Despite these challenges, for many Asian companies, the decision to remain in Russia is driven by clear-eyed pragmatism
In some cases, market potential outweighs reputational damage, in others, state backing or geopolitical alignment offers a buffer against
continues to move in.This article first appeared in bne IntelliNews.
