Many western brands are continuing to do business in Russia. But the widespread outrage over the war in Ukraine means these companies have to resort to sly methods. For instance, they are reopening businesses under new names. Many foreign brands are importing goods for the Russian market through other countries like the UAE and Singapore.

Russian chain stores that shut down due to the war are reopening under different brand names. There has been limited retreat of EU and G7 firms from Russia. So the impression that there has been a vast exodus of western firms is a mistake. Less than 10 per cent of EU and G7 companies with Russian subsidiaries have divested. When Russia invaded, there were 1,404 EU and G7-based companies and a total of 2,405 subsidiaries active in Russia. But only about 120 of these companies have divested at least one subsidiary in Russia.

There were more confirmed exits by US-based companies than those based in Europe and Japan. But even among the US companies fewer than 18 per cent subsidiaries operating in Russia have been completely divested since the invasion began. By contrast, 15 per cent of Japanese firms and only 8.3 per cent of EU firms have divested from Russia. Of those who have left their Russian subsidiaries in place, 19.5 per cent are German and 12.4 per cent are US-owned.

Exiting western firms account for only 6.5 per cent of the total profit before tax of EU and G7 firms with active commercial operations in Russia.They, meanwhile, accounted for 15.3 per cent of the total number of employees working for such firms in Russia.This indicates that, on an average, the exiting firms tended to have lower profitability and larger workforce than the firms that remain in Russia. These findings call into question the willingness of western firms to decouple from economies their governments now deem to be geopolitical rivals. Opportunities for Bangladesh

However western brands reopening businesses under new names in Russian markets have spelled optimism and opportunities for Bangladesh apparel exporters. H&M and Inditex have launched business offices in Dubai under new names to circumvent the political pressure and these new companies are doing business with Bangladesh.

They source fabrics from and import goods made in Bangladesh through third countries like Turkey. Bangladesh’s apparel exports to Turkey and the United Arab Emirates increased 83 per cent and 22 per cent respectively between July to December in fiscal year 2023 over the same period last year. But despite buyer’s interest of doing business through an alternative route, it is risky as Bangladesh’s exporters receive delayed payments.