Escalation of the political turmoil in Ukraine involving Russia is likely to hit India's trade with CIS countries, according to the industry bodies.
"India's trade with the Commonwealth of Independent States (CIS) is likely to decline by 15 per cent if tensions between Russia-Ukraine further escalate," according to a study by Assocham.
India's bilateral trade with Ukraine for 2013-14 will be around USD 2 billion facing a shortfall of about 36 per cent as compared to the last year, it found.
Sectors like pharmaceuticals and electrical machinery industry are likely to suffer the most on account of the current turmoil as these are the top exporters to the CIS region.
Chairman of engineering exporters body EEPC India Anupam Shah believes the present developments in Ukraine "do not augur well for trade and spell bad news for Indian exporters".
Trade between India and the CIS countries plummeted by over eight per cent during April-January in the current fiscal, Assocham said.
The turmoil involving Ukraine and Russia has proved to be a setback to the efforts being undertaken by Commerce Ministry of late to promote exports to former members of the erstwhile Soviet Union.
The Commerce Ministry along with different chambers had planned to organise 14 India shows in the next 14 months in the key countries of CIS to regain significant trade ground.
The Central Asian countries are quite rich in natural resources like oil, natural gas, metals and minerals. They are also a useful source of several other raw materials.
Among the 12 CIS countries, the biggest business potential lies with Russia, Kazakhstan, Turkmenistan and Azerbaijan.
During 2012-13, pharmaceutical exports grew 32.4 per cent, while electrical machinery exports rose by 20.3 per cent.
