Russian regions show varying import dependence trends

Russian businesses and regions show varying levels of dependence on imports. Overall, dependency is decreasing, but some areas and sectors are seeing an increase. This shift moves from purchasing components to relying on foreign technologies and equipment. The authors of a new study highlight that many intermediate goods and the necessary engineering expertise are lacking within Russia. The research conducted by RANEPA used real data on import purchases rather than surveys, providing a different perspective on import dependency. It shows that the manufacturing dependency on imports has been evaluated through the shares of foreign products in production expenses. In 2023, 47 regions reduced their import dependency compared to pre-war 2021, with the largest decreases in Kaliningrad, Kaluga, Leningrad, and Primorsky Krai. Conversely, 29 regions saw an increase, especially Vologda and Bryansk. The overall share of spending on imports dropped to 7.6%, down 4.5 percentage points from 2021. The study confirms that sectors with recent production growth—like computer and electronic manufacturing—are reducing their import dependency significantly. Regions with a strong defense industry, such as Sverdlovsk, showed very low import dependency. However, some areas, particularly in coal mining and pharmaceuticals, have experienced a rise in import dependency due to market conditions and reliance on foreign equipment. This evolving dependence underscores that while some sectors progress towards local production, others remain heavily reliant on imported technologies. The authors warn that a full substitution of imports is still premature. Many industries can currently only replace local components rather than entire production chains.