Studies show that the ban on fashion brands has not worked as planned because the trade after the initial censure started again as western brands are reopening businesses in Russian markets under new names.
Numerous foreign brands are importing goods for the Russian market through third countries. The goods are routed through UAE, Singapore, and Turkey. Moreover, studies also reveal many western brands have not been divested from Russia after the Ukraine war.
It has been reported that famous brand owners Inditex and H&M have opened new offices in UAE under new names to safeguard themselves from sanctions. Some sourcing countries are also conducting business with Russia secretly.
The keenness of famous brands to do business with Russia under a new name is encouraging news for countries like Bangladesh and Vietnam which expect that they would get orders from new names owned by the brands that are already conducting business with these countries under their original names.
This is good news for these sourcing countries that have seen a dip in orders from Europe because of high inflation in the continent. Under these circumstances, the opening of the Russian market will give them a boost.
The ban to conduct transactions with Russian banks came as a blow to the exporters from countries like Bangladesh as payments were inordinately delayed. The exporters, however, finally received their payments from third countries like Turkey or in Chinese currency from other third countries.
Bangladesh’s apparel exports to Turkey registered a growth of 83 percent to $117.43 percent and 22.28 percent to the United Arab Emirates to $155.35 percent between July –December in FY23 over the same period last year. Bangladesh exported apparel worth $607 million according to EPB. The apparel exports came down to $180.64 million during the corresponding period of the fiscal year 2023.
A leading Bangladeshi exporter on condition of anonymity conceded that some of our exporters have continued their business through Dubai and Singapore. Bangladesh Textile Mills Association President Mohammad Ali Khokon said Those Russian chain stores that shut down due to the war are reopening under different brand names. Demand is not falling, which is good news as we want our fabrics and apparel to be sold.
Researchers at the University of St Gallen and the IMD Institute in Lausanne have delved into how many companies based in the European Union (EU) and in G7 countries have divested from Russia since its full-scale invasion of Ukraine began last February. Their findings reveal “a very limited retreat of EU and G7 firms from Russia, [and] challenge the narrative that there is a vast exodus of Western firms leaving the market,” said the St Gallen University in a statement, AFP reports.
