With its population of 1451 million people and its annual purchasing power of $700 billion, the Russian Federation is a major market.

This massive population, together with the neighbouring countries, forms a potential market of great importance for the home textile sector, as it does for many others. At the moment, Turkey holds a 70 per cent share of the market of home textile imports by Russia. Further, 30 per cent of products sold to Europe pass again from Europe into Russia.

Textile imports by Russia are worth of $17 billion. Every day about 30 transport trucks filled with home textiles from the Laleli market pass through Moscow customs. Huge retail market chains are trying to increase their share of this market. Ramstores of Turkey is planning to build 50 new stores in the next two years in different cities.

With the restructuring following the 1998 crisis in Russia, the national economy has started to strengthen, and needs arising from that restructuring have opened the country’s import channels. Be it construction and mass housing in newly settled areas, be it the need for hardware materials in houses, offices and hotels rising with the increase in construction of business centres, be it the increase in furniture manufacturing or be it the recent expansion of the home textile sector, there is a steady growth and the purchasing power of the Russian consumer is increasing.

Construction in Russia has picked up rapidly. The development of residential areas and the foundation of new workplaces have been carried out by importing construction and home requirements from abroad.

The Russian Federation has a great demand these days for home textiles from abroad, and shows an increase in imports of such products. The products most in demand in Russia include curtains, upholstery fabrics, towels and bathrobes, lacework, tablecloths, bed sheets and blankets, carpets and flooring.

In conclusion, the activity in the markets of furniture and hardware for Russia’s new residential areas, mass housing, business centres, houses, offices and hotels is a sign that home textile products will manage to find a large-scale market.

The market for apparel, furniture, and other textile Consumer goods is also developing rapidly. For the past three years, local consumption of consumer goods has steadily increased along with prices.

Surveys show that the textile market is more receptive to high-quality products imported from Western countries. Nevertheless, low quality and inexpensive Asian products maintain a considerable presence in the market (close to 70 per cent).

Competition is stiff among many Asian suppliers. China, India and Turkey and other Asian countries continue to hold large market share. However, Customs statistics do not readily provide information on the country of origin for textiles arriving from Europe. US textiles enter Northwest Russia via Scandinavia.

European and Asian manufacturers continue supplying traditional materials such as wool blends or synthetics. There is also a growing interest in “techno” materials which are currently fashionable for young consumers.

The distribution system has improved in recent years. Nevertheless, many famous foreign companies prefer to have direct business relations with local apparel manufacturers to ensure long-term and regular orders.

Twenty-five percent of the textile trade is concentrated in Moscow, Moscow region, and St. Petersburg. Pakistani companies could expand into the regions where a large number of end-users are based.

Pakistani textile exporters can be boosted through a flexible pricing policy, barter options, aggressive promotion of new products, a continuous presence, direct contacts with end- users, cooperation with reputable and knowledgeable local distributors, expansion into regional markets with a wide product range.

The best prospects for Pakistani textile suppliers in the next three years will be in new “high-tech” product lines for all textile categories, but especially those for upholstery and adolescent fashions.

The direct imports from Pakistan are very small.

Pakistan-made fabrics primarily enter Russia via Dubai, Turkey, Poland and other East European countries. Consequently, Pakistani fabrics are not reflected in official statistics. Several indirect importers of Pakistani products are based in Moscow and distribute apparel fabrics, silk fabrics, cotton fabrics, woollen fabrics, flax fabrics for interior decoration and home textiles, fabrics for bed linen and bed items, fabrics for table linen and kitchen items and upholstery fabrics.

Unfortunately, the public and private sectors of Pakistan have not capitalized the opportunities in Russian market.

There is need to find out the reasons which are hampering our exports in this vast market. Trade bodies identify four major constraints: These are: lack of awareness regarding the Russian consumer’s goods market; non- supporting attitude of EPB towards participation in consumer exhibitions in Russia especially in textile exhibitions; non availability of warehouse facilities in Moscow; and absence of any Pakistani bank in Moscow.

In Russian Federation and CIS trading is usually done through warehouses, therefore, it is important to provide our exporters with trade infrastructure facilities including trade centres, purchase warehouses, lease display centres and spaces in supermarkets for access to wholesale and retail markets.

The establishment of a Pakistani bank in Moscow is needed to assist in opening of LC on behalf of the Russian importer in favour of exporters from Pakistan. With foreign

Banks, the exercise becomes difficult.