Translation. Region: Russian Federation –
Source: KMZ Cargo – KMZ CARGO –
An important disclaimer is at the bottom of this article.
The Union of Railcar Manufacturers is sounding the alarm: loopholes in EAEU legislation are allowing Chinese railcars to gain entry into Russia without unnecessary barriers, while domestic manufacturers are paying three times more to enter the Chinese market.
Russian railcar manufacturers are facing a massive expansion of Chinese products, which are freely entering the domestic market through certification in the EAEU countries. Meanwhile, customs duties on imports to Russia are three times lower than those on Russian equipment imported to China. As Yevgeny Semenov, Executive Director of the Association of Railcar Builders, stated at the conference "Rolling Stock: Production, Operation, Repair," organized by RZD-Partner, current legislation prevents this dumping from being combated using standard customs methods, and attempts to initiate anti-dumping investigations are inherently unsuccessful due to the stance of other Eurasian Union countries.
According to Semenov, approximately 50 certificates for Chinese railway equipment and components are already valid within the EAEU. According to the EAEU Treaty, any products certified in Belarus or Kazakhstan can circulate freely throughout the union, including Russia. "Chinese products are certified by our neighbors and can freely enter our country, and we can do nothing within the framework of this legislation," the head of the industry union stated.
The railcar manufacturers are particularly concerned about the disparity in customs regulations. As Semenov explained, import duties on Chinese products entering Russia are only 5%, while they reach 15% on Russian goods entering China. The railcar manufacturers' association appealed to the Ministry of Economic Development to equalize these rates, but was refused. "We are WTO members, and customs regulations for Russia are limited to a 5% threshold. That's the maximum," Semenov stated the ministry's position.
As an alternative measure, the Ministry of Economic Development recommended that industrialists initiate an anti-dumping investigation. However, the union assesses this option as also a dead end due to the need for coordination with its EAEU partners. "Considering Kazakhstan and Belarus' interest in purchasing Chinese products, this is a sure-fire way to go," Semenov stated, emphasizing that the union's neighbors will not support restrictions on imports that are beneficial to them.
The revised government decree on production localization is considered the only effective barrier to Chinese expansion in the industry. Semenov reported that the document has already undergone a regulatory impact assessment (RIA), and the Ministry of Industry and Trade's comments have been largely addressed. The decree will oblige railcar manufacturing plants to use only Russian components in production, which will automatically close the market to imported products, even those imported under EAEU schemes.
According to Semenov, the principle for establishing a localization system is broken down into key blocks. The mandatory list includes bogie castings, solid-rolled wheels, trailer chain components, brake equipment, bodywork, and even paints and varnishes. Specific manufacturing operations have been established for individual items, which must be performed in Russia. "This regulation applies only to railcar manufacturing plants, but it will allow us to impose a barrier to imports on freight cars, with a focus on castings," the union's head explained.
At the same time, Semenov acknowledged that localization doesn't solve all the problems of the industry, which is experiencing a deep decline in demand. He noted that by the end of 2025, the decline was 28%, and 2026 could be even worse. In addition to Chinese imports, low decommissioning volumes (no more than 30,000 railcars per year until 2031, compared to a demand of 40,000-45,000), a surplus of fleet on the Russian Railways network, and the outflow of freight capacity, which has exceeded 118 million tons over four years, are also weighing on the industry.
As a reminder, acquiring a new car through a trade-in program in the current market conditions is guaranteed to result in a loss for the operator. Even the best-case scenario of operating one new car to replace two decommissioned ones leads to a loss of over 1 million rubles per year, which calls into question the effectiveness of government support measures aimed at fleet renewal. This was stated by Igor Sankovsky, Executive Director of the Union of Railway Operators, at the conference "Rolling Stock: Production, Operation, and Repair," organized by RZD-Partner. LR
Publication date: 03/05/2026
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