Import substitution in the Russian construction industry under Western sanctions: problems and solutions

The introduction, first in 2014–2015, and then in 2022, of US, Canada, EU and other countries’ sanctions against the Russian economy affected the construction industry as well. In response to the imposition of sanctions, starting from 2015-2016, Russia is implementing a set of measures to replace imports and establish its own production of key commodity items in the construction industry. However, at the present stage, the share of imports of building materials, raw materials, equipment, machines and mechanisms, and software from «unfriendly countries» in the Russian construction industry in many product categories remains high. Even though full import substitution (100%) was achieved in the import substitution of the main types of raw materials for building materials, and it was also successful in replacing imports of building materials (reducing the share of imports in mass construction to 4%), in the import substitution of equipment and software progress is lower, and the share of imports in these segments is more than 50%, moreover, most of the imports are from unfriendly countries. The purpose of this article is, firstly, to identify the main problems that impede import substitution in the Russian construction industry for the above key types of products, and, secondly, to identify the ways to solve these problems.