Despite Export Controls... 8 Out of 10 Korean Exporters to Russia Express Willingness to Re-enter Market

Korean Exports to Russia Plummet Last Year
"Russia Could Become a Strategic Market if Uncertainties Are Resolved"
Industry Calls for Government Support to Address Exchange Rate Risks and More

As the international community continues its efforts to end the Russia-Ukraine conflict, a recent survey found that many companies with prior export experience to Russia are leaving the door open for a potential return to the Russian market, despite ongoing export controls against Russia.

According to a report titled "Changes in Korea-Russia Trade Structure and Future Export Strategies," released by the Korea International Trade Association's Institute for International Trade and Commerce on August 12, 79.2% of Korean companies (out of 528 surveyed) that halted exports to Russia after the onset of the Russia-Ukraine war expressed a positive intention to re-enter the Russian market in the future. Companies hoping to resume exports cited "the possibility of the Russian market recovering" as the primary reason, followed by "requests from existing buyers or maintaining relationships" as the secondary reason for considering a return.

The report states that Korea's exports to Russia peaked at $10 billion in 2021 but shrank to $4.53 billion in 2024, less than half, due to the war and international sanctions. During the same period, the number of exporting companies plummeted from 4,003 to 1,861. This decline is attributed to the expansion of export controls by the international community, which now apply not only to strategic goods but also to some non-strategic goods. As of June, the number of items subject to case-by-case export control reached 1,431.

Korea International Trade Association building. KITA.

Additionally, Russian measures regarding payment, customs clearance, intellectual property rights, and tariffs have further restricted the trade environment. Items subject to export controls to Russia include semiconductors and related equipment, aircraft parts, precision machine tools, industrial sensors, high-performance computers, and automobiles.

Companies that suspended exports to Russia also faced difficulties finding alternative markets, due to the specialized nature of their products for Russia and a lack of market information. In fact, only 37.2% of companies that stopped exporting to Russia managed to enter other countries. However, more than half of the respondents?51.8%?expressed a positive outlook on the possibility of the Russian market recovering, indicating that Russia could once again become a viable strategic market if uncertainties are resolved.

Nevertheless, companies identified "payment and exchange rate risks" (69.9%, multiple responses), "logistics and transportation environment" (44.6%, multiple responses), and "geopolitical instability" (43.2%, multiple responses) as major concerns regarding the resumption of exports to Russia. They called for tangible government support to address these issues. The most frequently cited support measure needed by the industry was "provision of information related to sanctions" (37.5%), followed by "financial and export insurance support" (22.9%) and "logistics and customs clearance support" (18.9%), indicating strong demand for practical solutions to on-the-ground challenges.