Russian authorities are considering a proposal to raise import duties on a range of goods, a move expected to significantly impact the cost of winter clothing.
The initiative suggests increasing tariffs from 10% to 15% on 80 categories of products, including jackets, coats, trousers, and ski suits. The stated goal is to support domestic manufacturers. While the project is still under evaluation, analysts already project that these changes will lead to a retail price increase of approximately 5%.
Expert Opinion on Production and Price Implications
However, the effectiveness of such a measure is being questioned. Ilya Yaroshenko, President of Baon, points out that many major Russian clothing brands manufacture their products in Asia. He expresses doubt that higher duties will genuinely aid local producers, especially given the stagnant demand for apparel.
“An increase in duties will inevitably lead to a rise in the final cost of products. Brands do not have sufficient margin reserves to absorb these costs and maintain current prices. Although the authorities declare their support for local manufacturers, this cannot be achieved solely through duties. Clothing production requires a complex infrastructure, including material manufacturing, accessories, and skilled personnel, areas where we have significant shortcomings. We can produce simple knitwear from imported yarn, but more complex items like down jackets, despite the availability of raw materials in Russia, demand high-performance factories and a wide range of components, which are currently lacking. As a result, we import components and produce at high costs, often making ready-made imported items cheaper. In an environment of low demand, price is a critical factor.”
Alexander Malyugin, founder and head of “Manufaktura Malyugina,” also confirms the negative impact of increased duties on prices.
“Any increase in duties directly leads to higher prices in Russia. It`s crucial to remember that VAT on imports is calculated on the product`s value plus duties, with delivery costs added afterwards. Thus, the final price will rise even more than the stated 4-5%. For us, who only import materials, this is less critical, but for companies bringing in finished goods, it`s a significant blow. The question arises: why is this being done? Instead, efforts should focus on developing the domestic light industry. According to CRPT data, imports constitute 52% of the market, which is very high. The market will suffer from such price increases. To protect the Russian market, it must first be capable of meeting consumer needs through its own production. Until then, raising duties seems premature.”
Challenges in the Footwear Market
Beyond clothing, the Russian footwear business is also facing significant challenges. Over the past year, the industry has seen nearly 300 companies exit the market, indicating a deteriorating situation. Even the surge in online sales isn`t stabilizing the market: a high percentage of returns (one out of three pairs of children`s shoes are returned) creates additional difficulties for marketplace sellers. Concurrently, demand for foreign footwear brands via services like CDEK.Shopping has increased by 21%, with more than half of these orders originating from China.
Rupert Blackwood 
Clement Ashworth