Page 68 - RusRPTNov23

• With eight projects, including three from India, business services – for the first time ever – made it to the top three, ranking the third most popular activity in 2020.
• As in 2019, Germany topped the 2020 list of major investors in the Russian economy – not a surprise as Germany has always been a leader in Russian investment. Most German 2020 investments were in agriculture and automotive. Some of these investments used their Russia base to expand into Central Asia, such as Volkswagen’s recent potential forays into EV production in Uzbekistan.
• The USA and China each invested in 15 projects. The majority of US businesses invested in the agri-food sector.
• China remained focused on high-tech, with electronics taking over the lead from software and IT services as the most attractive sector.
• Italy improved its ranking from 7th to 3rd, by more than doubling 2019 volume. Machinery and equipment attracted over half of Italian investments.
• India and Sweden joined the top ten investors in Russia for the first time in the past decade; however with small volumes. Investments were mainly in the manufacturing sector. India remains interested in the Russian market and has been negotiating a Free Trade Agreement with the Eurasian Economic Union. It remains supportive of the Russian market and this can be expected to continue unless sanctions upon New Delhi prevent this from occuring.
• Manufacturing remained the most attractive activity for foreign investors in Russia. The number of manufacturing projects was unchanged from 2019 at 107, undertaken predominantly by investors from Germany, China, Italy and the US. All others combined represented only 32 total projects.
• The number of sales and marketing projects decreased as, in the face of the pandemic, many companies were less active on the media and promotion fronts.
• With eight projects, including three from India, business services – for the first time ever – made it to the top three, ranking the third most popular activity in 2020.
• For the 6th consecutive quarter, food remained the largest sector attracting foreign investment in Russia, with 42 projects announced in 2020. Among key factors contributing to its attractiveness were import substitution initiatives and the food embargo imposed in 2014. Germany and the US were the top investors in the agrifood sector.
68 RUSSIA Country Report November 2023 www.intellinews.com