‘We created difficulties, we can accordingly control…’ says President Putin. Will Western firms return to Russia?

Russian President Vladimir Putin, speaking at a technology forum in Moscow on Saturday, February 22, said that Russia is prepared to welcome Western firms willing to return to its market amid heavy US sanctions and the mass exodus of companies after the Russia-Ukraine war.

“We have created certain difficulties, but we can accordingly control. A return to our market for those who want to return, creating and maintaining the advantages for our own producers,” said President Vladimir Putin, reported by the news agency AFP. 

Putin also highlighted the need to take this step carefully and delicately, which is Russia's effort not to create barriers to a partnership with Western nations.

“We need to do it in a careful and delicate manner, but it must be done. We are not going to erect barriers to a partnership with Western scientists. We hope that Western politicians will also understand the harmfulness of the practice of restricting cooperation in science and education,” said Putin in his address on Saturday. 

Will Western firms return to Russia?

According to the news agency Reuters report on February 19, as long as the sanctions prevail over Russia, the chance of companies moving back to the nation looks slim.

Over a thousand companies, which include McDonald's, Mercedes-Benz, Renault, PepsiCo, Procter & Gamble, etc., exited Russia due to the sanctions from the United States and other European nations.

The western firms have accepted that leaving Russia has contributed to losses of $107 billion in writedowns and lost revenue, according to an analysis by the news portal in March 2024.

The news agency's report also cited Kirill Dmitriev, who is the head of the Russian Direct Investment Fund, in saying that US companies have lost $324 billion after existing Russia. 

Who will move back to Russia?

Dmitriev also expects that a number of US firms will likely return to Russia in the second quarter of 2025. However, the head did not give any further details on the development.

The report also mentioned that companies that operate outside the sanctions are likely to return to the Russian nation, such as retail and food producers, compared to firms in the energy and finance sectors.

The news agency also cited senior lawmaker Anatoly Aksakov, who said that payment service providers like Visa and Mastercard will soon restore their operations in Russia.

However, many firms like Carlsberg and Unilever have issued statements condemning Russia's move on Ukraine and said that their exit from the nation was on moral terms.

Sectors off-limit to move back to Russia

Companies that supply civilian and military goods are bound by Western sanctions. Boeing and Airbus stopped their supply of aircraft and aviation spare parts to the nation.

Others, like the big semiconductor and telecom equipment makers, are also falling under the sanctions. The sanctions also barred Russia from accessing financial or energy-related services from the western nations.

However, the industry is speculating that the US-Russia talks can soften the situation of sanctions, but nothing conclusive has emerged so far.