Russia is the world’s largest country by land area, and has a population of over 146 million, making it a significant and attractive market for international trade. For Malaysian exporters, Russia is a potential market to explore, as it also offers access to other countries in the Eurasian Economic Union (EAEU). Additionally, there is a strong demand for Malaysian products in the Russian market, driven by rising disposable incomes, increasing urbanisation, and evolving consumer preferences.

In 2025, Malaysia’s total trade with Russia reached USD 2.04 billion, marking a decline of 17.8 percent. Exports were recorded at USD 678.2 million, while imports reached USD 1.36 billion. Malaysia’s exports to Russia were mainly manufactured goods, particularly processed food, electrical and electronic products, palm oil-based products, machinery and equipment, and rubber products.

Processed food products are the main products in strong demand in the Russia market, which includes cocoa and cocoa preparations, beverages, prepared cereal and flour products, dairy products, and others. There are also opportunities for Malaysian halal products, given the country’s Muslim population of approximately 25 million. Product categories with high export potential are food and beverage, ingredients, cosmetics, personal care products, industrial chemicals, and pharmaceuticals.

Currently, the United States (US), European Union (EU), and other unfriendly countries have imposed unilateral sanctions on Russia to paralyse its economy, limit its military capabilities, isolate it from the global financial system, and reduce the profit of its energy sector. As Western exporters and other unfriendly countries withdraw from the Russian market, Russian importers are seeking alternative suppliers. They have also begun to adapt to the economic isolation from the West by turning more towards Asian and African countries as trading partners. This creates opportunities for Malaysian exporters, especially as Malaysia has a reputation as a politically neutral and reliable trading partner.

The Russian government has also introduced the parallel imports law, which allows international brands’ products to be imported into the country without requiring the permission of the brand owners. This law is one of the effective measures taken by the Russian government to bypass the sanctions imposed by the West. Furthermore, the Russian Federation has implemented retaliatory measures against unfriendly countries in the form of import restrictions and higher tariffs.

Despite the opportunities in the Russian market, there are also several challenges that exporters will encounter. One of the key issues are the geopolitical risks, as there is uncertainty arising from prolonged sanctions, high logistical costs, and financial disruptions. Exporters will also face strong competition from local players as import duties imposed by Russia on unfriendly countries have encouraged domestic manufacturers to focus on the local market. Besides that, the country’s import substitution programme has further strengthened domestic production by promoting self-sufficiency and reducing reliance on foreign products. Moreover, the market is becoming increasingly competitive with the entry of new international brands, particularly from China, Turkey, Iran, and CIS and EAEU countries. Other challenges include the high cost of doing business and policy uncertainty, where regulations can change quickly and are often difficult to predict.

MATRADE has recommended that Malaysian exporters seeking to enter the Russia market focus on specific segments such as basic, mid-range, or luxury products. Emphasis should also be placed on sustainability, multi-functional design, and innovation to meet Russian market expectations. Exporters are encouraged to shift from a B2C to B2B approach, and focus on industrial supplies rather than consumer retail markets as there is stronger demand for raw materials, components, and machinery.

Malaysian exporters need to identify cost-effective logistics solutions and consider alternative gateways through China, Central Asia, the China-Kazakhstan-Russia rail corridor, and others. Exporters may also explore importing through EAEU member states to benefit from single-window customs clearance and reduce administrative delays. Additionally, there are financial and legal risks, such as US tariffs and shipping disruptions. These can be addressed through contract clauses, including force majeure and cost-plus freight to share the risks related to delays and cost increases with buyers.

Another important point Malaysian exporters should consider is a localisation strategy by partnering with local manufacturers to remain competitive with domestic players. They can also remain competitive by building long-term relationships and adopting flexibility in pricing structures, credit facilities, minimum order quantities (MOQs), and packaging. At the same time, exporters should support their Russian importers through active advertising and promotion. Lastly, understanding competitor pricing and establishing reference prices for their product in the Russian market is essential for effective positioning.

For enquiries, please contact:

MATRADE Moscow
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References
MATRADE Webinar (Tapping into the Russian Market: Opportunities and Challenges)