Abu Dhabi
Russian defence budget is likely to shrink by about 10 per cent due to sanctions related to Ukraine issue and falling oil prices, a top executive from the Russian government owned Rostec said on Monday.
Sergey Chemezov, chief executive officer of Rostec, said thought they lost the US market due to sanctions but they have other markets like India and Latin America.
“It’s the US market problem if they close their markets. We have other markets. We cannot say that sanctions did not have an impact. We are trying to produce on our own without depending on other countries after sanctions,” Chemezov said at the International Defence Exhibition and Conference (IDEX).
Russian rouble collapsed following sanctions and due to falling oil prices in December last year. Oil prices have been going down due to oversupply and weak demand. Russia is one of the largest exporters in the oil and gas sector in the world.
Chemezov said the company does not supply weapons to those countries which are under UN imposed sanctions. “We also sign an end-user agreement so that these countries do not sell equipment to third parties. Conflict in the Middle East has an impact in the sale of weapons but we sell to governments,” Chemezov said.
Russia is in the second place after United States of America in terms of military export. The country exported more than $15 billion (Dh55 billion) of military equipment to different countries last year. The figure is likely to remain the same this year, Chemezov said.
“The total number of signed contracts for the next four years is about $40 billion. There are short term as well as long term contracts worldwide. Our partners are India, China, Middle East, Latin America and Africa. The association with the UAE is successful,” he added.
The size of the global market for weapons is $40 billion to $45 billion. Last year sales for the company rested at 1.3 trillion roubles and for 2013 the figure was 1.04 trillion roubles.
