The Russian and the Indian governments are likely to introduce a Rupee-Ruble trade mechanism as early as next week, bypassing the economic sanctions which have been introduced by the West post the former’s invasion of Ukraine.
Russia had been removed from SWIFT, the international banking network, which has made it difficult for New Delhi to conduct trade with Moscow. Hence, a Rupee-Ruble payment mechanism might be brought into force by next week, as per a report by CNBC TV18.
“Export to Russia is not much, only in agriculture and pharmacy products. Now that the whole of the West is banning Russia, there will be a lot of opportunities for Indian firms to enter Russia,” A Sakthivel, president of the Federation of Indian Export Organisations (FIEO) , told CNBC.
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Officials of the Reserve Bank of India, India’s Central bank, met with officials of major Russian banks, i.e., VTB, Sberbank and Gazprombank, as per a report by Times Now.
Via the Rupee-Ruble mechanism, Indian exporters and importers will exchange payments in local currencies, thereby effectively bypassing the need to conduct trade in USD.
Indian and Russian banks will open branches in each other's countries to facilitate this mechanism.
The current bilateral trade between India and Russia stands at USD 10 billion, which amounts to 1.3 percent of India’s total trade.
Recently, India’s Minister of External Affairs said in the Parliament that his government has been seeking new alternatives to conduct trade with Russia.
Russia has also offered to supply Ural Crude oil at discount prices.
Union Minister of Petroleum and Natural Gas Hardeep Singh Puri on Monday informed the Parliament that India imported less than 1 percent crude oil from Russia. While, it imported 7.3 percent of its energy requirements from the US.
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It was recently reported that the Russian oil exports to India have quadrupled in March as New Delhi bought multiple oil containers which were initially Europe-bound.
Russia has till now exported 360000 barrels of oil per day to India this month which is four times the average of 2021.
