The Union commerce ministry is working on a proposal to set up a warehouse in Russia for the promotion of exports to that country which has been witnessing a good 20 per cent annual growth. The ministry may engage the services of government agencies like Central Warehousing Corporation (CWC) for the project.

Though the nitty gritties of the proposal are yet to be finalised, the ministry will set up a warehouse in Russia for all sectors and will rent out the same for the industries on a subsidised rate. The proposal envisages a reimbursement of 75 per cent in the first year, 50 per cent in the second year and 35 per cent in the third year of the establishment of the warehouse.

For the pharmaceutical sector, especially the small and medium companies which cannot afford either their own warehousing facilities or the ones run by the private operators, the new facility will prove to be a boon for pre-custom and post-custom clearance warehousing.
According to data available with the Pharmexcil, Russia is a fast growing pharmaceutical market and India's export to Russia stood at Rs 1227 crore during the last financial year. The Russian pharma market is growing at a pace of more than 20 per cent which is considered very healthy. Due to lack of warehousing and other problems, the export market is dominated by big players and the setting up of a warehouse by the government will make export financially viable to the small and medium players.

Meanwhile, the ministry has asked the industry to submit their comments and inputs on the proposal. The ministry is seeking details such as the exact area of requirement, whether the demand is for cold storage or normal warehousing, whether the exports include only formulations or API, etc.

In fact, the Pharmaceutical Export Promotion Council (Pharmexcil) had some time back proposed the setting up of a warehouse in Russia so as to enable the exporters to store the goods in the warehouse and to make ready availability of their products for entering the local market in Russia. But, the proposal could not be materialized so far due to lack of adequate response and viability problems of the project.