weighted score 4.5 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Russia
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Russia as a sourcing destination.
Labour cost competitiveness
4
Pre-war wages moderate but labour market distorted by mobilisation. Unemployment at historic lows (~2.5%). Brain drain of 500K-1M skilled professionals. VAT raised to 22%.
Supply base depth
7
Strong in metals, energy, chemicals, and defence manufacturing. Significant palladium (~40% global), enriched uranium (~35%), and titanium production. Civilian manufacturing quality declining.
Logistics & infrastructure
6
Trans-Siberian Railway, major ports at Baltic and Black Sea. Vast distances create challenges. EU port access banned for Russian vessels. Shadow fleet operating outside Western insurance.
Workforce skills
7
Strong engineering tradition in aerospace, nuclear, and materials science. Brain drain accelerating since 2022. University system historically strong but international collaboration severed.
Scalability
4
Large industrial base but comprehensive sanctions make scaling impossible for Western buyers. Military-industrial mobilisation consuming increasing share of manufacturing capacity.
Ease of doing business
2
Comprehensive sanctions prohibit commercial engagement. Foreign assets nationalised. TI CPI 22/100. Rule of law non-functional for foreign entities. Contract enforcement impossible.
Trade access & tariffs
1
14+ rounds of EU sanctions. US comprehensive sanctions. SWIFT disconnection. Import bans on oil, coal, steel, gold, diamonds, wood. Trade access effectively zero.
Sustainability baseline
3
EUDR high-risk classified. Environmental monitoring weakened by wartime priorities. Oil spill response deteriorating. Carbon-intensive economy with no credible transition pathway under current regime.
Innovation & IP
6
Historically strong aerospace and nuclear R&D. Foreign IP protections suspended 2022. Technology isolation from Western research ecosystem. Parallel imports legalised.
Quality standards
5
GOST system functional domestically. Defence production quality maintained. Civilian manufacturing quality declining under sanctions pressure and technology restrictions.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage dynamics
- Russian manufacturing wages were moderate pre-war but labour market severely distorted by wartime mobilisation. Unemployment at historic lows (~2.5%) due to military conscription and emigration of skilled workers. Wage inflation accelerating.
- Labour availability
- Population ~144M but working-age population declining. Brain drain accelerated since 2022 — estimated 500,000-1M skilled professionals emigrated. Military mobilisation further drains civilian workforce.
- Currency effects
- Ruble volatility creates unpredictable cost dynamics. Capital controls and sanctions distort true cost comparisons. VAT raised to 22% in 2025.
- Practical access
- Comprehensive EU/US sanctions make labour cost competitiveness academically irrelevant — commercial engagement with Russian manufacturers is prohibited for most Western buyers.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Industrial base
- Russia has significant capacity in metals (steel, aluminium, titanium, nickel), energy (oil, gas, nuclear), chemicals, and defence manufacturing. Civilian manufacturing quality variable.
- Transport infrastructure
- Trans-Siberian Railway connects Pacific to Europe. Port infrastructure at St Petersburg, Novorossiysk, and Vladivostok. Road network adequate but vast distances create logistics challenges.
- Sanctions impact
- Western technology restrictions severely affecting manufacturing capability. Semiconductor shortages impacting automotive and electronics production. Import substitution progressing slowly with Chinese and domestic alternatives.
- Energy advantage
- Historically low domestic energy costs were a manufacturing advantage. Now distorted by wartime priorities, export restrictions, and sanctions on energy infrastructure maintenance.
Trade Access & Business Environment
Trade Access & Business Environment
- EAEU membership
- Russia leads the Eurasian Economic Union (EAEU) with Belarus, Kazakhstan, Armenia, and Kyrgyzstan. Regional trade access limited in commercial value. EAEU increasingly used as sanctions circumvention pathway.
- WTO status
- WTO member since 2012 but trade relationship effectively suspended by comprehensive Western sanctions. MFN principles overridden by sanctions regimes.
- Sanctions barrier
- 14+ rounds of EU sanctions and comprehensive US sanctions create absolute barrier to commercial trade for Western buyers. Financial transactions blocked. SWIFT access severed for major banks.
- Business environment
- TI CPI 2025: 22/100. Foreign assets nationalised post-2022. Rule of law non-functional for foreign entities. Contract enforcement impossible through Russian courts for sanctioned-country entities.
Innovation, IP & Quality
Innovation, IP & Quality
- R&D capacity
- Historically strong in aerospace, nuclear, and defence technology. Civilian R&D base weakened by brain drain and sanctions-restricted access to Western technology and research collaboration.
- Technology isolation
- Western technology export controls severely limit access to advanced semiconductors, software, and manufacturing equipment. Russia increasingly dependent on Chinese technology alternatives.
- IP environment
- Russia suspended patent protections for entities from unfriendly countries in 2022. Foreign IP holders have no effective protection. Parallel import legislation legalised trademark infringement for sanctioned goods.
- Quality standards
- GOST certification system functional domestically but not internationally recognised. Military-industrial quality standards maintained for defence production. Civilian manufacturing quality declining under sanctions pressure.